BUDGET DEBATE

Hawera Star, Volume XLVII, 16 August 1928, Page 5

BUDGET DEBATE

WHAT HAS BEEN DONE.

ADMINISTRATION DEFENDED. COST OF SOCIAL SERVICES. (By Telegraph—tress Association.) WELLINGTON, Aug. 15. The debate on the Budget was continued in it-he House of Representatives to-night iby 'Sir John Luke, who. combated the statement by Air AlcCombs that the Budget had balanced more by good luck than good estimating. There was behind: the Budget ample evidence' of good management and administration. Never before in New Zealand, except, perhaps in war yearn, had the Minister of Finance had swell contused conditions to contend with, and whether it was in connection with Customs, income tax or death duties it would have been impossible to estimate with precise exactitude under the prevailing financial circumstances.

Sir John Luke thought it was 1 most creditable to the Minister for Finance and to the country that wc finished the year with such a handsome surplus. Modesty should not debar us from congratulating ourselves on this fact when wo remiembered that so many other States- were facing deficits, he continued. Unemployment was not so serious in New Zealand as it was 1 in.other countries. The Unitea States had four million men out of work with little sign of improvement, while we in: New Zealand were rapidly passing the crisis. So. far as general administration was concerned lie could with confidence sound a note of appreciation, because not only had the Government done much to promote the welfare of the people, but they had kept our credit good, and we. were standing well with the outside, world. THE GOVERNMENT’S -WORK.

The outstanding work of the Government on the social side was the improvement in the position with regard to pensions. They had increased .old age pensions, and were annually paying out £1,14(3,000 in war pensions, showing they had not neglected the interests cf those who were injured, indigent or blind. He thought that work done by the State Advances Department had been wonderful. There were disappointments, of course, for all claims could not be immediately met, but none the less 'great relief had been .given by operations of this most efficient department, although the new departure of this department had been ably seconded by the rural credits fund 1 , which •was proving a most valuable adjunct. He realised the difficulties in connection with soldiers ’ settlements, but had confidence that the honesty and industry o,f the soldier settlers would tenable them ultimately to twin through. He paid a tribute, to the sympathetic administration of the Minister for Lands, whose large heart had gone, out to the men who were facing a most difficult situation.

lie deprecated the attempt to raise the cry of town versus country, and urged reasonable economy .in 'connection with main highways, the cost of ■which, however, was offset by the saving to motorists in lower consumption of petrol. The railways were passing through a critical stage, a's railways in most countries were, but with the good work which Ithe new manager would .be ■able to do, together with new workshops and up-to-date methods of working, he was hopeful railway finance would soon again become normal. He favoured the development of hydro-electric power Wherever it Was possible to aid in industrial development. At the same time we eould not overlook the fact that big hydroelectric s'chemes were disturbing local trade and industry. Alore modern machinery was displacing older methods, and men were being thrown out of* former employments. It was 'true that new avenues of employment •were being opened up, but so far the new avenues had not balanced the older ones, and consequently there was at present an industrial disturbance, which happily would soon pass away. He thought the present method of taxation most unfair. If a m'an or woman saved,in younger days to provide a fund on which they could live in old age it was wrong they should be penalised by extra taxation as compared with a man who was making his income in business. Relief should be given in this direction. He urged generous treatment by the Government to primary education. We wanted 'clean schools and smaller classes, and money should be found to promote the general health of teachers’ __ and of children. BANKING MA TTERiS. i

Mr W, A. Veiteh said the gre'at want in Ahe Dominion was . a proper banking system. They should have a banking system that would provide money for ail branches of industrial and commercial life. At present the system would provide money only f-ov trade and commerce. State advances and rural 'credits were helpful, but they were State departments, and were not elastic enough. No new bank could be started in Now Zealand without legislation, and th'a't might create an iu!Tte>ees : siary difficulty. The .position should be that banks could be started at any time, provided those behind them could give the necessary safeguards. That was the position in America, and he thought some modification of the American banking Taw should be introduced here. Mr Veiteh did- not blame the existing banks, but he did bllame the law which conferred such monopolistic powers on them. The position had imposed great hardship upon many pimple during the-present commercial depression. We had only one bank in New Zealand, and he did not. know any other country in the world in that •position. The Minister of Pi nance had said that, having mlade representations to the banks, ho could .go no further. They should go much further. They should examine the banking laws of other countries and see if they could not give some relief to the people who had greatly suffered during the slump. Discussing the railways Mr Veiteh again commented on the non-relaying of rail's and of general upkeep of the permanent way. He also objected to a salary of £3500 being paid to the general manager. He was not the only general manager; they had the manager of the buses, who would ,be receiving at least £IOOO yearly, and he did not think the public would endorse these payments. Moreover, he understood the large salary to be paid to the new ge.neral manager was not the only advantage he was to enjoy. lION. O. .T. lIAWKEN’S SPEECH. The Hon. O. J. Hawken said they had been Waiting to hear from Mr Veiteh about the non-relaying of rails,

because that was bis animal complaint. ‘There was, however, a simple answer to it, and that. was that the heavier rails now being used did not require such fi;equent, relaying as the older and lighter ones. The Opposition liad overlooked . the most important featui-e cf .the Budget, namely, the increased cost of the social services since the Government came into power. Calculating from -1913, the cost of education had increased by 164 per cent., public health had in-ci-eased by 258 per cent., and pensions by 185 per cent. Mental hospitals'had also greatly increased in cost, .so that totals, of these services had increased by 175 per cent., or more than the total of income tax. This was, the answer to those who said the Government had no caire for the welfare of the people. This had been done to such an extent that the Government had often run itself -short of funds for other purposes, and' it was .one i-eason why taxation could not .be reduced at the present moment. That they would be able to make a re duct ion at an early date he sincerely hoped, because money would find its own level in spite of any artificial arrangements, and if taxation was too high in New Zealand, or if the inducements were better in other countries, nothing could prevent money flowing out- of New Zealand to those other countries.

It was necessary to preserve these social • services, but if the cost went on. increasing lie thought they might have to somewhat modify the systems, such as making pensions contributory, if they were going to reduce high taxation, which must be done if they were going to help business and reduce unemployment. The Opposition hadi taken the Budget piecemeal and had- not regarded it as a whole. Th© present policy of the Government was going in a few. rears to result in plenty of good roads which would transform the back country, while local rates would no longer he the serious burden they formerly were. Of all things the Government had done the legislation which altered the incidence of local rates had been the most revolutionary and beneficial.

Mr J. A. Lee (Auckland East) re snmed his attack cn the Grovernmem in connection , with, the limitation o Post Office Savings Bank deposits which, he claimed. wa.s in the interest of the trading banks. He asked th Prime Minister whv lie did. not- fill u] vnftiudca in the Cabinet-. Was it be cause he ptherwii-e could not maintaii discipline, except, like a, bird in it nest, by dangling a fat worm beifon s;:*verap claimant beaks? So it cam about that the '‘man who got tiling: done” was not able to make a Cabinet yet Heaven knew there was timbe: enough. If the trade balances wen good, w.liv was there a slump? Then could he only one explanation, am that was the Government.

The debate was adjourned on the motion of Mr W. .T. Girling, and at 11.53 the House rose till 2-.80 p.m. tomorrow. - -