RETRENCHMENT

Grey River Argus, 1 May 1931, Page 2

RETRENCHMENT

i Misplaced Taxation I — [ GOVERNMENT TRADING CON- | CERNS. TO BE REVIEWED. MR J. O’BRIEN’S SPEECH. Speaking in the House o n the Finance Bill, No. 2 the Member for Westland. severely criticised the Government for proposals in the Bill which placed the Post Office Savings Bank, the Public Trust, the Government Life v Insurant, TVovie4pment Accident and IFire Insurance and the Native Land Offices at a disadvantage, compared with the private concerns that they | were competing with. Finally Air | O’Brien, showed the Government where ' £480,000 per annum could be saved if • New Zealand put the same treatment . on her funded debt as that country got from U.S.A. He said:—Air Speak--1?r. —This Bill is simply another measure that the Government is putting befo.e us for the purpose of balancing the Budget, and as usual —and as was done practically i:i the previous Finance Bill—the Budget is to be balanced by interfering with some of our public utilities, by more cheeseparing, more whittling down, and the imposition of more restrictions on trade and the shifting o f industry, thus causing more unemployment. When we c.ome to examine the Bill we find, although perhaps it is not. the intention of the. | Government, that will be its affect. It ■ has been designed to embrace all those things that were missed in Finance ( Bill No 1, which, by the way, cut tho i salaries of those who were unable to afford it even to the very lowest paid. | DANGEROUS LEGISLATION. In this Bill, too, we are going to give the Government authority to borrow on Treasury Bills; and the Government says that this is not inflation, though it would be called inflation somewhere else. Iu clause 4 the Post and Telegraph Act is to be amended so as to take from the. Post and Telegraph Department Vnd incidentally from the Post Office Saving Bank cerj tai n moneys—not profits that have bee n made, but, as the Bill puts it. any ' anticipated profits may be paid into i the Consolidated Fund. Subclause (la) ( of clause — says:— <f lf at any time during any financial year tho Minister ‘ of Finance is satisfied that the opera- ’ tions of the Post Office Savings Bank ot the other operations of the Depart- ( ment, as the case may be, will result, j i“i a profit being made in that year iu respect of such operations he may authorise and direct payments of such amounts as he thinks fit to be made out cf the Post Office Account into the Public Account to the credit, of the Consolidated Fund in anticipation of Such profits. ’ ’ I have an idea that certain, banking institutions will be rather pleased that our Post Office Savings Bank is to be interfered with i n this way, and that certain anticipated profits may be transferred from the account of the Tost Office Savings Bank into the Consolidated Fund, leaving the Post Office Savings Bank to go high and dry, perhaps later on. UNFAIR INTERFERENCE. ’ But this i” not the only public ini stitutio-n that is to l>e interfered with. Fo r instance, the employees of the Public Trust Office are to have a levy of 10 per cent placed on them; and that levy is to be paid into the Consolidated Fund. The same is to be done in connection with the Native Trustee Account, the Government Life Insurance Account, and State Fire Account and the State Fire Insurance Account. One can almost hear certain people chuckling for joy when they see this legislation brought down; because these are trading concerns of the Government, and the salaries paid in them have no right to be interfered with by this House. If it was necessary to ’ have a cut in these salaries for the purpose of putting these trading conI corns on a better footing, then, perhaps, those employed in the concerns ' would not have any great kick coming, because it would be to their interest to keep their Department going. But I this levy is to bo put upon them, not. for the purpose of bettering these Departments and putting them ahead of any private concerns they are in competition with, but for the purpose of taking money out. of the Departments ! and putting it into the Consolidated | . Fund. ! the lawyers will be pleased. Take the case of the Public Trust Office. The lawyers of this country have objected for quite a long time to the Public Trustee doing certain things but the Public Trustee ha s been able ' to show in every case that the work done by his office has saved the people of New Zealand a tremendous amount of money; and the people of the Dojni inion have far more faith in the Public Trust Office than in any private office. But to-day the Public Trustee cannot extend his business, because here is a clause that takes from him j i what would be, perhaps, legitimate reI venue and transfers it somewhere else. | INSURANCE COMPANIES WILL PROFIT. Now, take the Government Life Insurance Accouult. Thfe Government Life Insurance Office is in competition with other insurance offices in New Zealand, and it i? a well-known fact that in some directions that office has j not been able to compete with the bonj uses that are paid by the other offices, j I know what is in the Minister’s mind. He is thinking that the premiums are less, but the bonuses i n the other offices are greater. However, it was the object of those in charge of the Government Life Insurance ©ffice finally to> reach a stage where they could pay £2 in £lOO by way of bonus, as is done . in some other offices, but with a lesser

pr< niium. That position was to be attained after a certain time. But today we are putting a burden on those who are running our Government Life Insurance Office but not giving them | the chance to which they are entitled, I as it is proposed to take the amount of the 10 per cent, salary cut which should go into the Office’s funds and put it in the Consolidated Fund. There is no doubt that the other insurance offices wil follow the lead of the Government. and will reduce the salaries of thei r officers by 10 per cent, but will the Government ask those offices, which are in competition with the Government Life Insurance Office, to pay tho amount of that cut in salaries into . the Consolidated Fund'? If it is fair to’ do that in one case, it is fair to do it in the other case. The same position applies to our State Firp Insurance Office.

STATE V. PRIVATE ENTERPRISE. When we had the earthquake and conflagration in Napier, and the outside insurance offices refused to honour their responsibilities by hiding unde. certain clauses in their policies, the State Fire Insurance Office paid up. Yet we are not giving that Oflice an equal chance with the other fire insurance offices. That is precisely the position, and it doer not matter how we talk abut the matter we cannot, make the position appear in a better light. If this Bill is passed in its present form, every one of our Government trading concerns is going to Ire placed on a worse footing than it was before, and will bo more al the mercy of its competitors than before. Instead of that we should foster our trading concerns. T. take it that the establishment u»f these Government trading concerns, about which I have been speaking, was the ambition of the old Liberals, but this is how those institutions are being fostered by those in charge of affairs to-day. I think the Government should take these matters into very serious conside.ratin n before passing this Bill. As a matter of fact, if the Government placed the same levy on the outside concerns as is being placed on the Government institutions I have mentioned there would not be very much kick coming from

GOVERNMENT CAN SAVE £450,000. Now, 1 wish to mention one way in which )the Prime ean get some money, if he so desires. To-day, I asked him a question in the course of which 1 urged him to take into consideratio.i the advisability of opening negotiations with the Imperial Government fur the purpose of securing treatment equal to that accorded to the Australian Government. On the 13th of this month there was published iu the ‘‘Dominion’’ Air Baldwin’s statement of the funding of the British debt to tho United States "f America. In that statement he said that the position i u January, U'23, was as follows; — The British debt to the United States was £850,000,000. and that interest had bi.‘ i paid in cash until May, 1919. The United States, a s a result of the negotiations, to postpone the payment of interest for three years. I do not know whether they called that rapudiatii n, but there has b «“'n a good deal of ink spilt over the postponement of the payment of interest by Australia. ITowevvr, the British Government had to postpone the payment of its inter-

1 est to the United States for three years, which brought the amount due to the United States to £897,000,000. ■ The United States Government held in respect of the debt formal obligations } of the British Government signed by j Lord Reading payable in the United I States in U.S. golfl dollars bearing in- | terest at 5 per cent, per annum. Later I on, in February 1922, after negotiatii nr, it was decided by the world-wide I Foreign Debt Commission to fund the war debts providing that the debt must be paid not later than June 15th, 1947 at the rate of 44 per cent. Later on we find the Debt Funding Commission took up a stand on the minimum term s laid down by Congress, and eventually it was agreed to recommend interest at 34 per cent, and payable in 62 years. Finally the United States | Government were induced to accept ai reduction to 3 per cent for the first 1 ten years. That was in 1922. Therefcre, the British Government, has been paying 3 per cent, on its funded debt to the United States, but when we look at the £24,000,000, which is our funded here, the interest is 6 per cent, and a little over 1 per cent, sinkingfund. I suggested to-day to the Prime Alinister that he should open negotiations with the Government of Great Britain with a view to having ouj- interest reduced.

SA;ME TREATMENT REQUIRED, j If we could have it reduced 2 per cent., which is the same concession that has been given by America to Great; Britain, it is only asking us to pay i exactly what the British Government.! is paying. That would give us a saving of approximately £480.000 per an-, num. No-w, the Prime Alinister in his' search for revenue has gone all over i New Zealand. Here is an opportunity I for him to get into touch with the British Government, and if put to them in a proper manner I think they would be willing to meet the New Zealand Government the same as the United States Government has made the Government of Great Britain. That is not hitting the British taxpayer at all. Air Baldwin told us that the tax was re-1 duced from £65,000,000 to £33,000.000 annually. That was a pretty fair reduction, and why should we let this chance slip by. It is duo to the taxpayer of New Zealand to get this assistance. I suggest to the Prime Minister that if he was to get this concession of £480,000 per annum that money could be used for settling some of the people on the land, for the development of our primary and secondary industries, and also doing away with some of the unemployment we have in New, Zealand at the present time. There are other avenues of revenue which could be considered by

the Government, but the avenues they 1 have been looking for hit the very 1 poorest of the poor people. Nearly I every one of our social institutions < has been dealt with, their subsidies 1 having been reduced by 10 per cent. < Even the Hospital Boards, no matter 1 what the Minister of Health may say to the contrary, cannot give the chari- : table aid that they desire because they have not got the money. They are only able to give practically starvation rations to the people. TAX THE RICH. I would sincerely recommend the Prime Minister to search out for other avenues of revenue than those that have been searched out up to the pre- ( sent. For instance, we have not got (

his taxing Bill. I wonder whether the right honourable gentelman will bring it down this session or leave it over till next session. Perhaps if he brings it down ami hits the people who can afford to bear some more taxation, his friends on the Reform benches may not feel so khidly disposed toward- 1 him. He must step lightly or he will be in trouble. 1 for one do not expect the Bill this session, ami when it comes down next session I am afraid that it will not hit very hard the rich people with the big incomes, because, if it did, the Reformers would not lot it pass.