BUDGET DEBATE

Hawera Star, Volume XLVII, 17 August 1928, Page 8

BUDGET DEBATE

NOT FINISHED YET. PUBLIC DEBT AND INSURANCE. MINISTER OF LANDS REPLIES. (By Telegraph—Press Association.) WELLINGTON, Aug. 16. The Budget made it appear that the country- was growing in prosperity every clay, said Mr 11. T. Armstrong (Labour) when the debate on the Budget was resumed in the House of Representatives to-day, but people were never so poor its they were at the piesent time. They were told their trade balance had improved to the extent of £15,(300,000. yet unemployment was rampant and soup kitchens were in operation. Never in the history of the country had people been so uneasy. Farmers were discontented. Members: No No

ivir Armstrong said 1112 would; be -s-ony to tmnii that rarmerg were repiesentcu by mem-belts who objected to tne Uieciaration or such an obvious truth, tne claim that the Dominion’s position would improve with increased production haci not bean proved by the experience of tiie past. The cost of living had gone up and with the purchasing power ot one. pe-opl© reduced it 101ioweu that the standard of living must be. The banks, for instance, wore enjoying a period or prosperity because they were making more- pronts to-day than ever they were before. The linage t stated the dead-weight of debt had been lifted from the farmers, but tiie fact was that farmers would continue to struggle under ‘ a dead-weight ot debt until the State stepped in and relieved them from the enormous profits now being made by tiie banking institutions. The State had gone into the insurance business and so far as it went it had been a pronounced success-, but instead of the Government encouraging State concerns it 1 scenic cl to be far more interested in the success -of privately-owned concerns.

At present insurance companies insuring against accident took nearly half of the amount paid in premiums, which, was clearest proof that it was time tire State Department became more active. Last wear insurance companies benefited to the extent of £221.(XX) out of accidents alone. It was never the intention of the Act that this should be so, and if the State Office had increased its benefits or reduced its premiums it would not have been long bafore jt obtained a complete monopoly of accident insurance. In Queensland -insurers obtained 94 per cent, of the premiums paid, and this could be done here just as easily if the State insurance office would only bestir itself and enter actively into competition with rival offices. The- facts in connection with the insurance business were so striking that Mr Armstrong felt it was time the Government began to pay some attention to the- views which the .Opposition had been persistently pressing upon them.

Discussing the public debt, Mr Armstrong maintained it was useless _to 'claim credit in reducing one portion of the debt if another portion of the general interest charges had increased. He condemned the management of the soldier settlements, and declared the Budget held out no hope.

No reduction in taxation was proposed, he said, and next vear if it were reduced it would be the people who did not require" the reduction who would obtain it. The Government’s intention was still further to increase taxation to the poor in order that it might reduce it to the rich, but be hoped the people of New Zealand would so deal with the situation -as to frustrate- the policy as it was outlined in the Budget. Mr W. J. Girling (Reform) defended the Government for putting a -limitation upon Post Office Savings. Bank deposits. This 'was not done in the interests of private banks, but because it was unwise from the point of view of public finance that large ©umis should be at call, as sudden withdrawals might often embarrass the Minister: besides, the Post Office Savings Bank was never intended for large depositors, it was a peopj lie’s bank, where people of -small means could deposit their savings.

Discussing taxation, Mr Girling contended that farmers were being made to pay a fair share. If income tax ware substituted for land tax most big land-owners would be paying less than they now paid in land tax. and that was a complete reply to the Opposition’s contention that large fanners were not hearing their proper share ot the burden. TAXATION AND FINANCE. Them was a time when the Budget was a Budget and when it contained a considerable amount of information to which one could look with confidence, •said Mir G. W. Forbes (Nationalist). Of late years, however, it had been growing smaller and smaller. A visible shrinking was evident when one examined it to see- will at policy the Government had enunciated in it. Ho had looked in vain to find any concessions to the people. , Was there to be any reduction m taxation V lie asked. Evidently not. The most the (Minister of Finance would say was that when revenue permitted it he would, not lose sight of company taxation. "When it came to racing club taxation there was no promise of relief, only an expression of vain and distant hope. The Government had said it had a pleasant surprise in store for motorists, but'iso far nothing had materialised but a promise of reduced fees.

The long-term loan scheme, for which power was given to the Bank of New Zealand in 1926 hacl proved a fiasco, said Mr Forbes. The bank had been given power to raise £5,000,000 to lend to farmers at 6 per cent. So far only £319,761 had been lent out of this. The Government had l found half of that amount, so the much-vaunted scheme had fallen far short of public expectations.

The dismal story of soldiers’ 'settlements, ©aid Mr Forbes, was repeated. What surprised him was that the people had been so patient in the face of the loss of £5,000,000 on these settlements, and be thought the sooner nil reference' to it was removed from the Budget the better, unless there were further losses to he written off. The railways were still going back, and the Prime Minister’s handing them over to a. general manager was a clear admission that tlio job was too bi.tr for him. Mr Forbes disagreed altogi3fcher with the policy of running ’buses in conjunction with railways, and hoped the general manager would •stop' it at once. What was made by railways would he lost in ’buses. With regard to public works, Mr Forbes suggested proposals should! be examined'bv some special board. There was at present a very general impression that railways were being put in hand which never should be built. What thev wanted was a complete examination of the whole system, and he challenged the Prime Minister. to put

the whole facts before Parliament. Although it went through a great part of bis district lue would not advocate the completion of the South Island Main Trunk line unless examination showed that it was warranted.

•MINISTER. OF LANDS IN REPLY, j Tiie Hon. A. D. McLeod said that Mr h omes ii-aa ta-Ken up -a good deal 01 time, hut lie- had made no uspful suggestion. 111 -reply to Mr Forbes’ onyactiou to ’buses -in connection witu railways, Mr McLeod said railways in all parts of the world were experiencing keen competition from road traffic, ana where they were run by private companies they were going to the Parliaments of their countries to ask for the right to run ’buses. They had not done tiiis without careful consideration and tiie New Zealand Government had not rushed into the scheme rashly, but had come to the decision deliberately. Ho defended the construction of the Itotorua-Taiiipo railway as opening up cue largest area of Grown land suitable for closer settlement.

Replying to the criticism of the Banking position, the Minister - of Lands said he had had a good deal 01 sympathy with the idea of a State bank. He had read a great deal about -it, had discussed it with men of experience- and had looked into it on the spot in Australia, . but he would certainly have nothing to do with it unless the Act clearly and (Specifically placed the executive of tiie-, bank beyond tine spliero of political interference. This had been a great trouble to the Commonwealth Bank, and it was not until it wa s placed outside the influence of Parliament that it became safe. The Government had not interfered with its representatives on the Bank of New Zealand board, -and with that noninterference he entirely agreed.

It had been said the Government was stopping the establishment of an -agricultural bank, but that was not so. TUe. fact wa s that, many neonle dliid imt, know what they meant when they talk■vi about ail agricultural bank, which if it were going to be of any service, must be the same as any other bank. The Government’s nolic-v in connection with the Post Office Savings Bank deposits was necessary because large deposits on call were- of no use to the Government, and it was better to get rid of them.

Regarding soldier settlements, Mr McLeod declared that even if there ha-ct been mistakes they were honest mistakes. No one had his palm greased, and no country in the world had done so well in repatriating its. -soldiers as New Zealand, The Leader of the Opposition had a great deal to say about these settlements, but at no time did he ever forecast there was going to be a slump after the war, -and that there would be any difficulty about -repatriation . On the other hand, Mr Holland had voted for a gratuity to soldiers that would have -absorbed the whole of accumulated -surpluses and left the soldiers no better off.

On the subject of taxation paid by fanners. Mr McLeod said He believed that in general farmers would prefer to pay land tax rather than income tax, because of the simplicity of the return which had to be made up for the former as compared with the latter. It had been .said that settlers had -bee-11 pushed off their f arms and those f arms had been given to others -at a lower price. He frankly admitted iseme eases, but that did not tell the where story. Investigation had shown that many of theise men had never paid any interest at all.

As to assistance given to settlers generally, he said advances made to settlers now -amounted to £50,000.000, four-fifths of which were made since Reform cam© into power. In the whole of Australia, with its greater area, and larger, population, the total advances amounted to £78,000,000. Discussin-o deteriorated 1 -lands, Mr. McLeod denied that anything like 5,000,(XX) acres had gone back. That statement was a gross libel on the Dominion. He was confident -a great deal of these lands would come -back into profit if economic conditions would justify the labour it must incur. Mr H. G. R. Mason (Eden) criticised the- public works policy, contending that no railway should he built unless its construction could -stand the closest examination. This seemed to apply with especia-l force to the proposed Rotorna-Taupo railway, which to- him seemed to justify the statements of the people who wrote to the papers saying it would not pay for axle grease-. To build this railway would cost tens o-f thousand# of pounds, and then they would have land limited in quantity and of such quality that it was doubtful if it would pay to expend money to i mo-rove it. The House rose a 11.50 p.m.