BUDGET DEBATE

Greymouth Evening Star, 30 August 1934, Page 7

BUDGET DEBATE

LABOUR LEADER’S CRITICISM RESERVE BANK’S CREDIT [PER PRESS ASSOCIATION.] WELLINGTON, August 29. In the House, this evening, the Budget debate was commenced. Mr Savage said he could not work up any sympathy over the Budget. Referring to the National Mortgage Corporation he said it seemed to him to he forecasting another financial tragedy and would mean the end of the State lending corporations, New Zealand handing their activities over to a Board. The Government’s policy of deflation had destroyed the foundations on which the State lending institutions rested, but what the Government destroyed, Labour could reestablish, and he promised the people that State lending institutions would play a part that would enable manufacturers to progress. Labour was unsuccessful in making the Reserve Bank a State institution. The net amount of sterling taken from the trading banks in London was 23 million. .The Bank would have to find 28 million to complete the transaction. Where was it to get the money from to do that? The money could only come from public credit. He did not say it was unusual, for the Bank, like other banks, was a place where money could be manufactured When the proprietors thought necessary. Had the State been owners of the Bank, the people would have been owners of the London sterling assets instead of a. few private shareholders. If it were sound banking policy for the Reserve Bank to create a credit to meet the payment for goods exported, was it not also a good policy to create credit to make goods available to New Zealand people? The Budget said the floating debt amounted to 22 million, as compared with three million at the end of the previous year. There was an apparent huge increase in the public debt. It was not clear what the increase really was. He would like the Minister to. straighten that out. Coming to the Unemployment Fund, they were told that with the balance carried forward the amount carried forward was £5,390,000, so they could prepare for taxation reductions. So far as the special exemptions were concerned, „they were on the right ' lines, but a reduction of twopence in the shilling should not have been made until an opportunity was given the GO,OOO men and families a. chance to earn sufficient to maintain themselves and families. Alternative methods should have been devised to employ those men at standard rates of pay before a reduction was made. Very little hope was contained in the Budget for the average wage earner, and for the man who used to have his wage fixed by the Arbitration Court. Tens of thousands of workers who had been working under awards had wages reduced. What hope was there for them? Were men , working under the Public Works Department to be classified as public servants and receive five per cent? There was not a gleam of hope for these men. Unless that were done, the Budget was going to do more to divide the people of the Dominion than anything he had seen before. All that money would go into circulation, and men and women at the bottom were entitled to first relief. The superannuation payment looked like a red herring. He thought the time had come for the superannuation principle to become universal. A scheme could be devised to superannuate everybody at sixty. If the , Labour Party had the opportunity legislation to give effect to that principle would be placed on the Statute Book. The restoration to the Public Service had not come too soon. The cuts should never have been made. Since the cuts were made in 1931, the amount put out of circulation was not less than 90 million. If it had not been put out of circulation, trade and industry would have been in a different position to-day. MINISTER’S CLAIMS. Mr Ransom said that he was convinced that under careful administration of the present Government, the country would be out of its difficulties before the next General Election. He did not think the Mortgage Corporation would confine business to the wealthy. On the contrary, it would bring it within the reach of the small investor. He appreciated the point that people should be working at standard rates of pay. The Government was desirous of achieving that as soon as possible, but if relief works were made as attractive as other classes of employment, there would be no inducement to men to seek regular work. The unemployment tax was heavy, and the people had met it heroically, but if the tax had never been made', how would Mr Savage have met the expenditure of 41 million annually. The Budget held out no promises impossible of fulfilment, but he was sure all wife read it would realise it set out a record of wonderful achievement over the last three years. It had already created an excellent impression, especially the fact that the Budget was balanced was of great satisfaction to the people. He thought they could look forward to the coming year with a greater degree of confidence. He thought the revenue was estimated on a conservative basis, and he would be very surprised if the surplus at the end of the current year did not exceed a million sterling. The Mortgage Corporation proposal alone was sufficient for Parliament extending its life to four years. The Corporation would provide a reliable source of investment. He was sure the fears of the Leader of the Opposition would not be given effect. Under that scheme, it should be possible for a borrower to secure money at not more than 41 per cent, with amortisation payment of one per cent, which would allow the loan to be paid off. The debate was adjourned.

LABOUR SPLIT DENIED. WELLINGTON, August 30. Rumours of dissension in the ranks of the Labour Party, and dissatisfaction with the leadership of Mr Savage, which were in circulation in Parliament Buildings, to-day, were given an unqualified denial by the Deputy-Leader, Mr P. Fraser, who characterised the report as one of

the best jokes he had heard for some time. He explained that the rumours arose from the fact that Mr Savage was present for a short period only at the caucus, yesterday, and that he was seen dining alone, while his supporters were still in conference, because he had private business to attend to, and was due to initiate the financial debate in the House at 7.30. Mr Savage excused himself shortly after the caucus met, leaving Mr Fraser in charge. Mr Fraser added that the Labour Party was never happier than now.