THE BUDGET

Hawera Star, Volume XLVII, 11 August 1928, Page 3

THE BUDGET

DEBATE COMMENCED.

TAXATION METHODS,

BAND FOB SOLDIERS

MAIN POINTS OF CRITICISM

(By Telegraph—Press Association.)

WELLINGTON, .Aug. 10

The debate on. the Budget was commenced in the House of Representatives to-day by the Header of the Opposition. Mr Holland opened by congratulating the Minister of Finance upon having considerably condensed bis Budget, hut he hoped the day would come when it would not be read*, as was the practice now, but when the House wouild have a spoken, statement from the Minister as was done in many other .Parliaments.

Air Holland complained that reports and documents related to the* Budget were not available to members before they were asked to discuss the financial position of the Dominion. That war, not fair to members. He commented on the falling of the income tax returns. This should not have been so. and he suggested it was due to the fact that the wrong people* were being relieved of their liabilities. Mr Holland said he was unable to get information regarding soldier settlements and he thought the biatistioaili Department badly required overhauling. They should have hod a report dealing with these settlements, for the Minister seemed, to have the information which was. not available to members. He bad been laughed at for predicting that the value of soldier setelements would ihayo to be n down from seven to eight million pounds but they now had the admission that there had been writings down to the extent of £5,750,000, with more to 'come, so that he thought his earlier estimate of from seven to eight millions wouild be not far astray. This meant that the country had relieved. the soldier of some of the burden he should never have been called upon to bear, while at the same time a present of millions had (been made to the land owners —.mostly wealthy land owners;—who were profiteering in. land values, continued Mr Holland. History had recorded that during the war prices went up, hut when the war was over prices fell, but of this great principle the Government took no notice. It die not look ahead and to-day the conn ay was paying the price of the Government’s blunders. His. contention was that the soldier settler should get tin benefit of whatever writing down toot nlkce. Further writings down must r take place, and he suggested the country should face the losses at once aiHi o-ive the soldiers the benefit of them ° The Hon. A. D. Alainod : A good vote catcher proposal! Mr Holland protested that he could not advocate the case of the sofdaeis without being accused of vote-seeking He commented upon the admitted Jos., on the working of the railways, lb * statement, he contended, was misleading. Anyone who did not kin w would perhaps think the loss on the railways was only £291,402, hut actually it was £781,020. AVhat happened was that half a million pounds was taken from the Consolidated Fund and called “net railway revenue.. The Prime Minister: Quite right;. Mr Holland, accepting the Prime Minister’s acknowledgment, said at would be much better to state the ease as it actually stood, and show the - actually as it occurred. The present method of stating th© case was abso lately misleading and should be discontinued? Just in the same way they had difficulty with the State Advances Department. He had searched in min ter information regarding rural advances. Whv was this so? , The Minister of Finance: 1 was not aware the figures were not published.

DEMAND FOR. STATISTICS. Air Holland: That only goes bo Justify my complaint that the Statistic. Department requires oTOrliauung. • - ■ was still waiting for infornifation as to how much of the rural bonds uas by tlie public and liow much by tfie Bank of New Zealand. The statement in tlie Budget regarding post o" ice ■ withdrawals all so was misleading. Iliese withdrawals. Aver© due to the Government’s own policy, and lie wou.d like to know whether the Government had to pay a higher price for money as tine result of that policy. , Air -Holland commented upon tfie smallness of the revenue (about £_o,000,000), yet the gross neb ehaiges oi the Public Debt we.ro £12,51 i ,l ob, ot just about half of the- total revoiji ■ That surely was a serious position. Before the Reform Party came> into povei it .advocated a change an the horiowing policy of the Ihberail-Labour laity. It pointed out that in 19 years P dec-esisors had greatly increased the Public Debt, but in the same numbe of years Reform had increased the 1 ub H c s Debt by over £80,000,000. If. the Ref oral Party was right m its criticisms of Liberal borrowing it was AAton 0 borrowing so much itself. . The Hon. R. A. AVmght said teat a - ter listening to the speech of the Leader of the Opposition he Avas satisfied there w-a© little, in the Budget to exception could be taken. Air _ had complained of the absenceofp - liaanentarv reports and information, a matter Y o f fact the Minister had no more information than the Deader of the Opposition. - The -reports never bad been presented earlier than they wore now, and the present Government nas nnllv follow in" tbe precedent set. by its The falling off in income tax wasT due to assessments being made on the velar of the slump.

BAND AND FINANCE

PJemrclmg Mr Hollared’s criticism ol the purchase. of land for soldier setoeinent, Mr Wright said members ami the public had forced the hand ol to Government and compelled d to buj land for the soldiers. The Government had no alternative but to buy land and place the men on at. It was kIH© to say that the Government should have foreseen that prims would fall. Muu\ had foreseen this, hut there was a mad ruish for land and the Government could not emit I ol it. . , Aft" Wr’iolll t It hi'Kl been tie dared, said Mi Wiigint, thfiut soldier settlers were being driven off the land, but that was not so. Indeed, adinstmentis were stall being made and where. men showed any aptitude every effort was being made to assist theini The Leader of the Opposition could’ not object to the losses made by the Riaiilwiayis. He might object to the book-keeping, but that was necessary to prevent small non-paying .lines be- ' H ?)u K theTiibject of the Posit Office Savings Bank Department deposits, the Opposition did not speak with one voice said. Mr Wright, In proof of this he quoted Mr Howard .as condemning the increase of the hm.it from £IO,OOO to

£5000; now the leader of the party condemned the Government for doing whlat Mr Savage approved of. The Opposition could not blow hot and cold. Air Holland : Gan the Government blow hot and cold. Air Wright claimed that New Zealand’s financial position was. the envy of the Australian States; indeed, of the older countries of the world. He quoted several British papers commenting on the Dominion’s enviable position o,r the London fianciail market. That was a complete answer he said, to those who said the Alinister of Finance was not justified 'in separating tlie deadweight debt from other forms of debt. The Reform Party had been condemned because of its alleged prodigal borrowing. It mi glut be true that they had increased the National Debt _by £BO 000,000, exclusive of war debt, but he maintained that large borrowing was not necessarily unwise or wasteful so long as the money was wisely spent. Some members of the Opposition favoured a capital levy as a means of.nieeting public expenditure, but again the party spoke with two voices, tor Air Howard favoured borrowing for capital works. It was absurd to condemn capital in New Zealand. It was a new country and nothing was more encoui - agin o- to development, than an abundance of capital. Therefore the doctrine of the capital levy was out of date and out of place. . . . i The Budget, maintained Mr VVrigJit, was something of which everyone might well feel proud. It was a courageous Budget in view of the fact that an election was .pending. There were no unfounded promises in it. It raised no false hopes. It could not be described as a v>ote-oa,tdhing Budget. .It was a sane statement of the position.

GOVEIRNADEINT’S POLICY A CRITICISED’. s v Mr El. A. Ransom (Plabiatua) said n the speech the Alinister of Education y had just delivered showed that he diet © not understand the Budget and that h© a had not a single constructive idea re- ]- gar,ding it. There was nothing in the fi speech to show the Government was q Worth its salt. Air Wright had spoken a of Nlew Zealand’s high credit, but he had not give the slightest indication of the policy. Instead, he had devoted • s a great deal of his time to quotations o from old Hansards. He was living m f the past and no country could progress ft if her administrators were living an the t past. . , c The Minister seemed to; amply, con- P tinued Air Ransom, that New Zealand s € only hope of relief from taxation was } a succession of boom, years- That was a most disastrous policy. Our hope was for ai period of sound, normal years. c O'ne institution which had done more ] to carry New Zealand over her drill- ] culties than any other was the btate \ advances. _ „ . 1 Alemlbens : Hear! Hear! c “When members say hear! bear!' j said Air Ransom, they should remember that when their party was in opposition it stoutly opposed the estaibIMumeiit of this useful dcpartin-eiit. New Zealand’® troubles arose mainly because of the inflation oil land values - after the war. As a result lenders wero shy oif lending money on rural securities and it was the duty of the G«veminent to bring down some policy , which would meet that situation. Instead, it raised the rate of interest to settlers and now the banks bad reduced their rates. He wondered why the btate ; Advances Department had: not done likewise as a means of turning bn y investments to rural securities. He suggested that money so> lent should »e free of taxation, or at least only subject to ■nominal taxation, this might tempol-aiiilly dislocate the Munster s finance, but it would give rebel whoie relief was required. Taxation to-day did not prevent the aja- of land. Indeed, many men who were dealing with form piocluce and stock had discovered that the farmer was a privileged person and that while they held no farm they had to pay income tax on their business transactions, but so soon as they acquired, a small farm and put their transactions through their farm books they escaped income tax, and this was wli’at they were doing. The graduation of land tax Iliad not broken up the big estates for settlement. It may have resulted in subdivision amongst the members ol a family, but if they were to r ely on the graduated tax to pi ovide land to closer settlement they would have to wait for a long time. Discussing income tax, Air Eumsoni pointed out that while the financial position of the people had improved by £l3 000,000 the amount of income tax had’ fallen off. The Alinister had sand he did not expect that income tax would benefit much from the improved trade position. This was a serious admission, and it was an admission of weakness on the part of the Afmistei that none of this money wa® finding its way into the Treasury. Compai y taxation was not being; pa-icl by t o shareholders, but was being passed on to till© public, and so those who were least able to hear the burden weae be ino- overtaxed while those- host able, to pay were getting off scot free Taxation was not hitting, the .rich, but tlie pom . and it had been truly .said that after every great wair the. rich were richer and Die poor were poorer. Air D. Jonas (Ellesmere) said that the whole of Mr Ransom's speech was in favour of the big man. Hus plea, tol ! free tax mortgages, on nival securities 1 was .simply a plea in favour of the big ■ owner, leaving the small man without any assistance at all. The Leadei o the Opposition had blundered as. foadily as the member for Bahiatiia. This was 1 understandable, because Mr Holland knew nothing about laud or taxation. Air Ransom, however was a farmer, • and should know something about both ; Air Holland bad said the farmer paid ! no income tax, but income tax was ; just woat the big land owner wanted to pay in preference, to. land tax, wliic , > in its graduated term,. Was doing, so ! much to break u.p tlie bug estates. 5 Mr Holland had quoted the man. wh. > owned over 100,000 sheep and paid no > income tax No such man existed. What Air Holland had- done was to take, several of the same name and add their sheep together Again he spoke V of £90,000, but un that calculation no had made no deduction for woiking i expenses. To him the whole of :t vas ! taxable income. ID’S was a Class oI mistake tin t supporters of the Goaj. ern ment were called up to correct. 1 HYDROsELiEIOrRICALi SCIIEAIKS > ALr AI. J. Savage wondered how some 3 of the hydro-electric schemes will look f when, asked to produce it. balance-sheet 1 yearly. As the budget stated, “some 1 of tbe chief sources of revenue were in bud but bad not yet flowered.” .He ■ doubted if they would ever flower. He 1 condemned tbe Government’s ananage- * mout of tlh© Post Office Savings Bank, n which, was being used in harmony with D instead, of rin opposition to private t banks. Discussing the reference in tbo 1 Budget to tax-free debentures, be said V it was little ivonder that people, were B refusing to .surrender them, because it y was a financial proposition, and no one ‘ would surrender these debentures unless they were going to derive some - bnefit from their surrender. To find e out what the Government was going to 'd do about it they would have to> wait and 0 see, since that was the invariable reply B to inquiries by the Opposition. 0 Tlie chief fault in the Budget was

that it Was In line with the.speeches of the Minister of Finance, and threw up a. smoke ,screen about the reduction oil the Public Debt, Pie disagreed with the management of the Post Office Savings Bank. The House had been misled, because .members thought the Ministry was going to use it in. Competition with private banks, and this had not been done. Pie condemned the action of the Government in giving the underwriting ot the rural credits loan to the Bank of New Zealand, instead of doing it themselves. So far little money was made available, so that the member for Wanganui was perfectly correct when he said when the farmers wanted money the Government gave them legislation. The adjournment of the debate was moved fev Mr J. S. Dickson, and tlie House rose at 11.30 p.m. till 2.30 p.m. on Tuesday,