LABOUR AND BUDGET

Greymouth Evening Star, 7 August 1931, Page 7

LABOUR AND BUDGET

MR. H. E. HOLLAND’S' SPEECH

• NEW TAXATION OPPOSED [PIB PBESS association.] WELLINGTON, August 6.. The Budget debate was resumed in the House of Representatives, by the Leader of the Labour Party, who referring to the speech of Mr Coates, said it must have been a relief to the Government to know it had nothing to fear from the official Opposition, this session. Mr Coates had insisted on this and that avenue being explored, and he (Mr Holland) considered Mr Coates might live in history as the explorer of avenues. It had, however, been impossible to ascertain from the leader of the opposition’s speech what line of action his party proposed to take in the event of the Prime Minister refusing to take notice of representations. Reform Member: That is another story. • Mr Holland: The Right, Hon. Gentleman was very careful not to give us the other story. . • Mr Holland said he interpreted the Leader of the Opposition’s attitude to mean that Mr Coates was satisfied (as he himself was satisfied) that the, United Party would be the smallest party in the House after the next election. Mr doubt believed it was possible that when the election is over no party would have a majority and it would be a question whether Reform'or Labour should be the Government. Mr Coates would then be able to say to the United Party, “In the best interests of the country get in behind me.” The Leader of the Opposition’s attitude reminded him of the old couplet “An two men ride a horse, one must ride behind. Mr Coates was evidently determined that when the fusion horse took its preliminary canter, he would not be the one who rode behind. Mr Holland announced the intention of the Labour Party TO DIVIDE THE HOUSE

on all the main items in the Government’s taxation proposals. The Government despite its election pledges seemed determined to pile the heaviest burdens on the men with the smallest income. First of all it cut wages by what amounted from 10 to 60 and 70 per cent. Haying done that it imposed a flat rate unemployment levy of threepence in the pound on all incomes, making the man with the small levy pay the same rate as the men whose incomes ran into thousands. Then it imposed indirect taxes on tea, sugar, and other articles of common use, forcing up the. cost of living. The Government then proceeded to levy on moderate incomes taxation increases out of all proportion to the increased charges made on the larger incomes. “The wage worker, small farmer, business man and public servant, said Mr Holland. “The Prime Minister has got them all with financial headlocks, armlocks, crucifixes, and body scissors, and now as a final spectacular display, he is endeavouring to work back breaking the Boston Crab. The upshot is that he will probably find himself thrown out of the ring at the end of this year, unable to continue.” Mr Holland said it had always been held that graduation from lower incomes upwards was a sound principle of taxation, but in the case of the Budget proposals, the process was inverted and as a result of lowering the exemption to £260, the increases m taxation on lower incomes were proportionately greater than those on higher incomes. Discussing the primage duty, Mr Holland said that both Reform and Labour were opposed to the principle involved. Mr Jones: You didn’t say that two years ago. , Mr Holland: I am afraid that wont get the Reform Party out of its very grave difficulty. The Labour Party theh had to choose between two evils. Primage was the lesser evil because the other was putting the Reform Party on the Treasury Benches. Mr Veitch, referring to the remarks that had been made-in connection with fusion, said the only conclusion to which he could come was that those who had refused to offer had either failed to realise the magnitude of the problems facing the country or had placed the party before the country.

MR STEWART’S SPEECH. Mr Downie Stewart said that in these difficult times, any Minister of Finance was entitled to receive from his critics, not merely justice, but leniency and assistance. He agreed that Mr Forbes was right in seeking to balance the Budget if he could do so by effecting economies and imposing extra taxation, not beyond the taxable capacity of the community. In agreeing that the Budget should be balanced, Mr Stewart said it did not follow that one agreed with all the details or methods adopted. For instance, in the imposition of increased income tax, he thought the Government should have reviewed the position as regards single men without dependants as compared with married men with a family. It -was true, the married man already enjoyed concessions in respect to children, and during the past, while the exemption was so high, his position had not been unfavourable, but now that exemption had been reduced, and taxation increased and wages tax also added together with increased customs duties, he thought the relative position of the single man and the married man with a family should have been further considered.

Mr Stewart said there was another, feature concerning which he desired to express agreement with Mr Forbes, and that was the cutting down of public works expenditure by about 40 per cent. This would be a welcome change from recent history, as during late years there had been a rapid increase in public works expenditure. Mr Stewart declared that while New Zealand public finances were heavily strained they were still sound, and with care and economy, the position could still be coped with. He considered the problems of the day could not be adequately dealt with by a majority Government, and he still considered "all sections of the House should be invited to see whether they could evolve a common policy to meet the danger. He wished to make it clear in this connection, he was speak-

ing entirely for himself and not for J his party. ! In a brief reference to the tea tax, Mr Stewart said the tea importers had told him instead of bringing in £92,000 a year as estimated, it would bring in £140,000. As the tax and sur-tax would amount to about 3|d, they would have to pass them on J but if the Minister of Finance would reduce the tax to twopence, they would endeavour to bear it, and the Government Would still realise over £lOO,OOO. Mr Stewart expressed regret that the Government had not yet given a clearer indication whether anything further was contemplated in the direction of assisting the primary producer. He personally considered it was becoming necessary in view of the changing circumstances, for a suspension of a num-i ber of rigid conditions in the Arbitration Court awards, so far as they affected the farming industry. He feared’ that unless allowance were made for greater flexibility the whole system itself would be endangered. • Mr Mason said he considered that valuable results could be obtained from the reformation of our banking and currency system. It was true that the value of our products in outside markets was a serious factor in the present situation, but the position could be greatly improved internally by banking and currency system. It was true that the value of our products in outside markets was a serious factor in the present situation, but the position could be greatly improved internally by banking reform. It would for instance be a substantial achievement if the thousands of people who at present were in enforced idleness were enabled to find a place in productive employment. Mr Polson said he was not interested in party wrangles. It seemed invitations for the formation of a National Government were hardly necessary in view of the country’s difficulties. It should have been patent to every party that the time had arrived for mutual understanding in order to grapple with the problems of the day. Mr Martin: Every party except the Labour Party. Mr Polson: The Labour Party is undoubtedly entitled to be consulted, but J am not satisfied the Labour Party is anxious, or can join in any agreement with the moderate section or the House. , r ■ The debate was interrupted by the rising of the House at 10.30 p.m.

REFORM MEMBER’S WARNING. WELLINGTON, August 7. The House met at 10.30 this morning. Mr Jordan gave notice to introduce the Honey Local Marketing Board Bill. . . Mr Polson, resuming his speech in the Budget debate, said that if the Government had established some years ago an Agricultural Bank the farmers would be in a much better position now, and would be able to be helped out of credits. Mr Jones: You went back on the Agricultural Bank. Mr Polson: I did not. The Member for Mid-Canttrbury has never grasped properly .the Agricultural Bank system. Mr Broadfoot commended the Government’s action in using reserves, the which had been built up in lean times. Reform wrongfully used the reserves in times of prosperity, to provide for writing off on soldier settlements. He urged the pooling of resources and knowledge of fertiliser works for the benefit of farmers.

Mr Ansell said that he agreed every reasonable effort should be made to balance the Budget, and individuals should do their utmost to reduce expenditure. He mentioned, however, that in using the reserves, New Zealand was living beyond her income. He emphasised the need for placing the primary producer on a sound basis. He said that his side of the House was not prepared to accept the Government’s taxation proposals. That was putting it plainly enough. Mr Sullivan criticised the lack of policy and hope in the Budget, in which no mention was made of the development of secondary industries. He suggested a committee of business men, Labour representatives and primary producers to inquire into the economic situation in the Dominion through losses on the Home market He asked if it were not possible in future to establish a depression fund to avoid the initial loss from the fall in prices. The House adjourned at 1 p.m..