INTEREST REDUCTIONS

Grey River Argus, 29 April 1932, Page 5

INTEREST REDUCTIONS

BANKS THE BOSSES What Ministers Admit (From Our Parliamentary Reporter.; WELLINGTON, April 28. The Government’s proposals to reduce interest and rents, as provided in the National Expenditure Adjustment Bill, were discussed to-day when this section of the Bill, together with the recently-introduced amendments, was considered in committee by the House. Mr Rushworth (Ind.) moved an amendment to apply all the interest reductions, not only to mortgagors, but to all debtors. Equality of sacrifice, he said, was practically impossible, but the Government having embarked on its course, it should pursue it. Mr Lee said that the wage earners’ sacrifice was greater than that of the interest received.

Mr Downie Stewart acknowledged that it was impossible to keep down the interest on the money at call. The banks, he said, were the last and the only line of defence that thc country had at the present time. Mr Holland said that if Parliament was unable to handle the banks, then it should give up its business, and hand it oyer to the banks. Parliament must always be the master of tho situation. Mr Wilkinson (Ind.) said that the amendment aimed to bring in the banks. He complained that the banks had given no more than a vague promise to reduce their interest charges by an “average” of one-half per cent. The banks were escaping a sacrifice. Mr Forbes said that thc banks had reduced their advances rates by onehalf per cent., and further reductions were being considered. Mr Rushworth’s amendment would restrict the making of advances. Mr G. C. Black (Ind.) said that a member of the Special Parliamentary Economy Committee had told him last year that the General Manager of tho Bank of New Zealand had promised that the banks would co-operate in any movement to reduce interest by 20 per cent. Mr Stewart said that the creditors to contracts over a long term could be held down, but not those with money at call, without the declaration of a general moratorium. Mr Coates said that it was a dangerous practice to impose a flat cut on overdraft rates. t Practical bankers should handle the administration of all this class of monies. Mr Wilkinson said that the Finance Minister had acknowledged that the Government and Parliament could not do their job as it should be done. He urged action to force the hand of the banks. “If a moratorium is the only way out. as the Minister suggests,” Mr Wilkinson added, “then let’s have Mr Smith (Chairman of Committees) said that ho doubted whether the amendment was in order, as it might necessitate further taxation; but, after hearing argument, he’'agreed to admit it. The House was then divided. The amendment was lost by 49 votes to 25. GOVERNMENT ABLE TO GIVE EXEMPTIONS. (From Our Parliamentary Reporter.) WELLINGTON, April 18. The interest reduction discussion was continued. Mr Polson’s amendment was lost by 43 votes to 29. When the Clause was reached which gives the Govcrnor-in-Council power to exclude from the operations of interest reduction any specified class of mortgage or contract, Mr Holland said that this gave the Government the power to undo everything that the Bill accomplished, and it showed the hopelessness of the whole legislation. Mr P. Fraser congratulated Mr Downie Stewart on his victory. The Minister of Finance had, when presenting his financial statement, disagreed with interest reduction, and. by this clause, he took the back door method of getting out. Mr Walter Nash raised a laugh when he said, helplessly: “I don’t know what the clause means.” The) whole purpose of the legislation seem- ) ed to have been nullified. .

Mr Forbes said that this power was taken in any legislation which broke new ground. The Labour members would admit that flexibility was required.

WHO IS RESPONSIBLE ?

For Many Changes (From Our Parliamentary Reporter.) WELLINGTON, April 28. A protest at the manner in which the business of the House is being conducted was entered by Mr H. E. Holland to-day when asking why the Government -had been compelled to introduce a large number of major amendments to th e interest and ren't sections of th e National Expenditure Adjustment Bill, now before the House. Mr Holland protested against the manner in which the Bill had been introduced as a part of the Government’s policy, and had later been altered by a long series of far-reaching amendments. He asked who was responsible for these amendments, and he alleged tha't th e Government had bungled over, the whole affair. Mr Forbes said that on account of the widespread influence of the measure,, the Government desired to make it as perfect as possible. When it had bee n introduced anomalies were discovered, and objections had been heard, and it was found that some of those whom it was proposed to relieve were the hardest hit by it. It was entirely a new departure in the way of legislation in this country, anj while amendments had been made, the principles of the measure had been retained. Mr Armstrong: What about the objections that were made to the wage reductions? Mr Forbes: W-e have tried to meet the Opposition as fairly as possible, and the Government has done its best to make this a workable Bill. Wo had embarked on an uncharted sea. and did not know where the rocks were.

A Labour voice: You’re on the rocks now! - Still More Amendments (From Our Parliamentary Reporter.) WELLINGTON, April 28. A number of further Government amendments to the final three r ■ f

Ihe Expenditure Adjustment Bill were brought down this evening. Tho amendments arc largely machinery and consequential, some of them altering the basisi of the reduction of interest o n certain classes of debentures. Here and there provisos are made so 1 as to relieve hardship from certain people affected. The stamp' duty tax is altered from 6<l in each 5s to TJd in each 2s 6d. For the purpose of avoiding minor hardship, the Minister is empowered to refund the stamp duty on securities held by person s who to'tal annual income does not exceed £lOO. These amendments have be-en written into the Bill, which is now bieng considered in committee, and upon which an exceptionally late sitting is indicated, as urgency has been graritefl its passage.