BUDGET DEBATE

Greymouth Evening Star, 6 August 1931, Page 5

BUDGET DEBATE

REFORM PARTY’S ATTITUDE MR. COATES’S SPEECH [per press association.] WELLINGTON, August 5. ’ The Leader of the Opposition (Mr, Coates) opened the Budget debate when the House resumed at 7.30 p.m. Explaining the Reform Party’s attitude, he said it still desired to help rather than hinder the Government, but it desired all possible alternatives to be explored before it could acquiesce in the taxation proposals. His party did not intend to move an amendment hostile to the budget.

Continuing, Mr. Coates said that unless there were an improvement in revenue or further economies could be made, it would be even more difficult to balance the budget next year. He was of the opinion there was room for savings in departmental expenditure. He urged the Government to reconsider the taxation proposals in two important respects, namely the increase in the surtax and the lowering of exemption, as he considered both these proposals would inflict hardship on those earning lower rates of salaries. Taxation on smaller salaries would undergo relatively greater increase, because of the proposal to reduce the exemption to £260. His side of the House regarded the proposed taxation as being extraordinarily heavy, and it would hit harder and sooner than previously. It would hit still harder when such charges as the wages tax were added. He realised it was impossible to reduce existing taxation in view of the circumstances but he submitted it would be in the interests of the country as a whole if it found it possible as the result of additional savings in expenditure, to reduce the proposed total surcharge of thirty per cent, and leave the exemption at £3OO. He asked if it were possible to reduce the surcharge to fifteen or even twenty per cent. Mr. Parry: How would you make up the balance. Mr. Coates: I have already indicated I believe there could be further economies. 'Continuing, he said that the worst element in the Customs increases was the primage duty, which affected all rion-dutiabie goods. It affected the worker and farmer, and in addition to increasing the cost of living it increased the cost of production. It was a serious matter to increase the cost of production in any way. It was essential to allow the farmer to produce at a cost that would enable him to compete in world markets. He urged the Prime Minister to explore every possible source of revenue before imposing the proposed primage tax. Mr. Coates then referred to the proposed increases in expenditure on railways and road construction, and asked what was the reason for loan money being used increasingly in these quarters.

Mr. Forbes: Unemployment. Mr. Coates: Exactly. He added he considered that if there had been any other reason, the Government would have deserved castigation but even as it was, the position was serious. He asked whether loan money should be spent on projects that would not return to the country the best possible results. Was the expenditure on roads and railways the wisest course to follow? Would it not be possible to cut the railway and loading expenditure ‘in half, and spend the remainder on development of land ? He did not suggest that money spent on land development would immediately pay interest, but in a comparatively few years, it would increase production, and the only thing this country could do to meet the fall in prices of primary products would be to increase production. Referring to the highways funds, Mr. Coates asked whether the Government had ascertained what the Board’s policy was likely to be during the current year. Was it going to give assistance to the rural ratepayer? He considered that if it did not contemplate such action, there should be some arrangement whereby the Board increased the subsidy toward the rates. Mr. Coates expressed the opinion that in spite of its difficulties this little country was sounder financially asd otherwise than any other country on the face of the globe. MR. RANSOM’S REPLY

Mr. Ransom expressed appreciation of the attitude of the Leader of the Opposition towards the budget and said his remarks had been very fair. The Government had taken note Of the difficulties ahead, but its precautions had not been sufficient, as the deficit showed. It was gratifying to know that Reform approved the Government’s determination to balance the budget. Economies would have to be made and it was necessary to avoid hardship as much as possible. Hardship was inevitable, but the Government should try to avoid personal hardship, such as would be inflicted bv dismissals of employees. He believed the opinion of the country was that the budget should be balanced and he was glad to know Reform would support the Government’s proposals in that direction.

A Reform Member: Oh, no. Mr. J. A. Nash: You are going too far. Labour Members: Arent you all agreed? Continuing, Mr. Ransom dealt with the income tax increase and said the income tax would still be much lower than in some other countries, lie felt sure that if alternative proposals for raising money in a more equitable way could be brought forward, the Finance Minister would be very willing to consider them. He added that some critics of the Government had very short memories. There had been long arguments against reduced expenditure, but now there were cries for more reduction, and less taxation. There was a lot of talk about the need for the release of hidden capital, but where was that hidden capital? He asserted that the Government had carried out an extensive programme of economies with the result that only eighteen hundred thousand had to be found from taxation. The debate was adjourned on the motion of the Leader of the Labour Party and the House rose at 9.45 p.m. NATIONAL GOVERNMENT COATES-HOLLAND EXCHANGES [special to “stab.”] WELLINGTON, August 5. ■ A lively exchange took place in the ’House, to-night, between Mr Coates

and Mr Holland, on the National Government question, but the attitude of both parties was left somewhat clouded. “Don’t you think the position is so serious that a national Government might be considered?’’ Mr Samuel interjected, while Mr Coates was speaking. Mr Coates said he had not heard the Labour Party say it -was in favour of a National Government. “As far as the primary industry is concerned,” the Reform leader added, “the position calls for the united effort of everyone (Hear, hear). I feel it is coming down on us, and the next year or two is going to be most serious. Labour members: We were not askto join in a National Government. Mr Howard: Reform ‘was invited, we were not. Mr Coates: Is the Leader of the Labour Party in favour of forming a National Government? Mr Holland: What does the Reform Party say? Mr Coates: Is the Labour Party in favour of it?

Mr Holland: Will the Leader of the Opposition extend to us an invitation on behalf of the Government? Mi* Coates: Does the Leader of the Labour Party say he will make one and that his Party will follow hinl to join in forming a National Government, to help to relieve the problem of the producers? Mr Holland: Is this an invitation? Mr Coates: Would youYjoin such a movement? Mr Holland: Is the Reform Party joining it? Mr Coates: I am asking you that question? Mr Holland: And I am asking you. Mr Coates’s next statement raised loud laughter. “I hope,” he said, “I will always be found in this position.” Hear, hears and laughter from the Government and Labour benches prevented him from proceeding further. Mr Coates was not slow to appreciate his slip, and to pass it off with a cheerful “That was an unfortunate remark.” Continuing, the Opposition Leader said that for no individual consideration of his, would he ever stand in the way of placing the interests of the country above those of any interests of the party. (Reform hear, hears). Reform had placed the interests of the country first. Mr Langstone: No more than any other party. Mr Coates: But you are not in the same position. If Mr Holland says he is prepared to meet and discuss the problems ahead, I am prepared to meet and discuss them with him.

Mr Parry: Would you agree to a National Government? Mr Coates: I notice the Labour memIbers won’t answer a direct question. They are'dodging. Mr Holland: If you say you are extending an invitation we will answer it in double quick time, but the invitation was never extended to us. Mr O’Brien: New Zealand has put this question to you for si£ months, and you have not answered it yet.