BUDGET PROPOSALS

Greymouth Evening Star, 6 August 1936, Page 7

BUDGET PROPOSALS

MR. FORBES’ REVIEW

STRONG OPPOSITION

[PER PRESS ASSOCIATION.]

WELLINGTON, August 5

The attitude which the Opposition will adopt toward the proposals contained in the budget submitted to the House of Representatives last night, was fully discussed at caucus of the National Party. In a statement at the conclusion of the caucus, the leader of the Opposition (Mr. G. W. Forbes) made some pointed comments on the budget, and announced that the budget debate in the House to-morrow night would be opened by .Mr. J. G. Coates, who was Minister of Finance in the latter years of the Coalition Government.

“I look upon the budget as a cold douche on the hopes of many thousands of people, that with the improvement of economic conditions there would be some relief from the serious burden of taxation that was imposed to meet the necessities of the depression,” said Mr. Forbes. “Instead of that, the burden has been made heavier, without a single remission. The statements of the Prime Minister during the election campaign that taxation would not be increased have evidently been forgotten.”

Mr. Forbes spoke of the wonderful recovery of the Dominion, as revealed by the Government being able to rely upon another £3,000.000 from increased revenues. That was not sufficiently large, however, to provide for the Government’s spending programme, so the taxpayer was to be called upon to provide an additional amount of £1,800,000. The whole provision of social services, pensions, etc., depended upon the soundness of the economic structure, and the piling up of financial burdens undoubtedly weakened the stability of that structure. Excessive taxation such as was proposed. in addition to the enormously increased costs added to industry by the Government’s industrial legislation, must slow down the wheels of industry, and discourage the initiative and enterprise of citizens generally. No thought had been given to the effects of increased taxation on progress and on the increase of production, which meant so much to general prosperity, affecting all citizens. “A notable point in the budget is the fixing of the price arbitrarily of dairy produce at a point which is below the present market price,” Mr. Forbes said. “This must cause considerable disappointment in the minds of those dairy farmers who were looking forward to an improvement of prices, of which there are definite signs, to enable them to make up some of the leeway of the lean rears of the depression. The failure of the Government to appreciate the urgent need of making adequate defence of this country is another notable point in the budget. The increase proposed in the budget is only trifling with a very serious and urgent matter.” MORTGAGE ADJUSTMENT

Mr. Forbes said the reference in the budget to the adjustment of mortgages was involved, and it was difficult to know on what basis the Government intended to proceed. Those people who had money invested in houses and land would be watching the position with a great deal of anxiety, and one would have expected the budget to be more definite on such

■m important point. It was not made clear how the Government was going to finance public works. When the present Government was in opposition, it had protested against the use of the Unemployment Fund for the carrying out of public works: but under the proposals of the budget, it was apparently intended to use the Unemployment Promotion Fund for that purpose. A good deal had been expected of the Government in the remission of taxation, but nothing had been done, Mr. Forbes said. During the election campaign and since, it had been promised by the Government that the sales tax and gold export duty would be removed: but those promises had failed to materialise. Another surprising feature of the budget was the Minister’s failure to make any reference to land settlement policy. Such references had been a feature of budgets for years past, and one was entitled to ask whether the Government had any land policy. There was nothing in the budget to show it had one. Mr. Forbes said he would be speaking later in the debate, and would prohablv reply to the Prime Minister.

LONDON PRESS OPINIONS

LONDON. August 5

The “Financial Times" expresses the opinion that the increase in income and land taxes proposed in the New Zealand budget will necessarily affect British companies with investments in the Dominion. 1 hose engaged in the wool-growing industry are particularly concerned as land owners. It is clear that the new Government has no fear that world prices and its own policy will operate otherwise than favourably on the capacity of the agricultural and pastoral industry to bear the new duties. It may be presumed, as no mention was made by the Minister of any immediate operation, that no more will be heard of the conversion proposals, except in accordance with orthodox practice. Meantime, in view of the decision to finance from revenue half. the public works and development programme, it may be taken that the Government adheres to its intention of avoiding inflationary measures in pursuit.of its policies.

The “Financial News” describes the New Zealand budget as apparently the first step from the well-worn conservative track into the comparatively unexplored field of socialist finance. The step is a bold one, though there is nothing in it to disturb the British holder of New Zealand stocks. The budget contains nothing unorthodox. The wealthy will contribute more to revenue, which was only to be expected from a Labour government. It was fortunate that Mr Savage assumed pow~r at a time of rising prosperity.