THE BUDGET

Hawera Star, Volume XLIX, 14 August 1929, Page 5

THE BUDGET

DEBATE CONTINUED. I PRIMAGE DUTIES DISCUSSED. UNEMPLOYMENT RELIEF. (By Telegraph—Press AsenJcz<*tioii.j WELLINGTON, Aug. 13. The, Hon. E. A. Ransom continued his interrupted speech on the Budget in the House of Representatives -today. He said it was not desirable that large sums should continue to be expended on relief works. The Government was making every • possible endeavour to place- men on more productive works than they had been engaged on during the past 12 months. A special committee had been set up to inquire into not only the effects of unemployment, but also the causes, if any. The Government had decided to consider the recommendations of the committee as they were brought forward and t-o put them into operation immediately if they were acceptable. One of the first acts of the present administration had been to raise the standard of wages of pay to relief workers, and the opinion had been expressed that many would throw up positions in order t-o take on relief work. The Government had got over that difficulty by employing men on the co-operative system. The result was that work being done at the present time was costing the country less than it did under the lower rates of pay. Mr D. G. Sullivan expressed his desire to see secondary education made available for every boy and girl, and advocated an increase in the old age pension so that old and needy people need not be forced into institutions in which they feared a certain amount of hardship. He agreed with the Prime Minister that there was little opportunity for reducing expenditure. In fact, while not advocating a poliev of extravagance, he thought it would be only fair to increase expenditure in some directions; he instanced the salaries in the police force. PRIMAGE DUTY. The Prime Minister was justified in seeking additional revenue, but Mr Sullivan said he did not agree with some of the methods employed. He thought it was wrong to increase the primage duty. Had there never been a primage duty it might never have happened that this means would lie employed to raise revenue on this occasion. Now that it- had once been increased there was, a precedent for a further increase. It had been stated that the cost per head would be only three shillings. This, added to the original tax, would make six shillings, and over a period of a full year (as the amount estimated was only for six months) it would amount to twelve shillings primage. The duty "would therefore cost aworking man’s family of five tv total of £3 per year, and this did not represent- an inconsiderable burden. He agreed with other speakers that once this duty was imposed it would be almost impossible to get it off. He would have preferred additional taxation in other quarters, such as on foreign motor cars and on certain other imports. In such cases it would also aid the develooment of New Zealand industries and provide additional employment. He had heard suggestions of free trade within the Empire, hut he did not consider this practicable.

Mr Sullivan expressed his support for the proposals for additional taxation on land. It had been -stated a number of large, landowners would be unable to carry on under the new conditions. This criticism was surprising in view of the Government’s expressed intention that tins tax should assist in breaking up some- of the largest estats so that other people should' have an- opportunity of making a living on the land. LAND AND FINANCE. Mr A. Hamilton, stated much had been said about the Government’s having provided cheap money for settlers, but he asked where was it? He contended the previous < Minister of Finance could have found plenty of money under the same terms as Sir Joseph Ward- had, but he had known that there was a general desire throughout the l country for a steadier borrowing policy. Sir Joseph "Ward himself had criticised the Reform administration for its- borrowing. Mr Hamilton described the Budget as ungenerous in places and boastful in others. It was ungenerous of Sir Joseph Ward to ascribe the- deficit to the Budget of Iris predecessor in office. It had been stated the Government was not going to embark on a programme of reckless expenditure, but, he- pointed out, the expenditure for the first quarter of the- present year had shown an advance of £600.000.' He was inclined to think the South Island railway extension might also prove an extraordinary undertaking. The Government had claimed it had a mandate to carry out this work. How could a party that had obtained. only 30 per cent of the votes throughout the country claim that it had a mandate ? He ascribed the success it had achieved to the promise of cheap money; that cheap money was yet to be provided.

The Budget had paid a tribute to the Reform administration when it had described how in May last New Zealand’s credit in London, after Reform’s term in office, had been such that it had been possible to raise a loan on favourable terms. He wondered if the terms would lie equally favourable when the country next, went on the market. Had Sir Joseph W ard. as Finance Minister in the National Cabinet, adopted a statesmanlike attitude he would have pni d for the. war out of taxation year by year as it went on, and the- soldiers would then have returned and found New Zealand* as they had left it. In summing up, Mr Hamilton stated 1 the Budget indicated a policy of borrow, tax and spend. RAISING OF LOANS. Mr 11. M. Rusliworth said private financial institutions had heen becoming shyer and shyer in -regard to lending money on rural securities. That 1 t.-as not surprising in view of the fact that gross production was stationary while costs of production, were on the up grade. The margin between the two was continuously shrinking, _ and nobody would he* particularly desirous of lending money on such security. But now it appeared! the State Advances Department was adopting the same procedure. He had had numerous complaints of this department’s refusal to advance loans to people in the country on the ground of unsatisfactory security, and he suggested a ■ more liberal policy in relation to the valuation of these securities. Mr Rusliworth protested against the raising of the cost of living by an increase in the primage duty. He

agreed with'bcWain aspects of the increase in land; tax. It was desirable ' that certain lands of estates should be broken up, but the proposals might involve some hardship. It- was not pleasant for a man to pay tax on his debts,, which seemed to be the possible outcome of the proposals relating to mortgage exemption. Mr Kuslnvort-h outlined the activities of certain financial institutions, and stated that, in view of the size of their profits they should be subjected to increased taxation. The financial institutions had secured a stranglehold on the Dominion, and this was a problem that would have to be tackled. The Prime Minister had stated the banking legislation would be reviewed, but- why was he delaying ? The Bank of New Zealand’s license- to issue notes had recently expired, but the Prime Minister, instead of extending the license for six months while he considered the positino. had renewed it- till 1932. Mr Rush-worth contended that this problem should be faced forthwith. He was strongly of opinion that income tax should be increased, while indirect taxation and the burden on the farmer should be reduced. Mr J. S'. Fletcher said lie wished to ask Mr IV. D. Stewart some questions. Was he negotiating at the end of his term of office for a loan of £5,000,000? Was he going to take the money at- a higher or a lower rate of interest than that at which it was eventually borrowed by the Prime Minister? The Reform Government had estimated over £7.000,000 for public works. How was it going to carry on these works with a loan of £5,000.000’ when the programme called for over £7.000.000. and what would have been left for State advances, advances to settlers and other purposes? Mi* Fletcher said he disagreed- with the contention in the Budget that heavy losses on publicly-owned railways were being largely brought about by good motor roads being built, also with public money, to facilitate direct competition with the railways. It had been indicated that motors had not been paying their share for the provision of good roads, and he hoi>ed the Minister of Railways, when he brought down his statement, would be able to furnish some better reason than this for the failure of the railways to pay. He disliked the increased primage duty as much- as any other member, but the Financial Statement had to be balanced.

Tn reply to interjections on the subject. Mr. Fletcher said he would ‘‘prefer the whips of primage to the scorpions of Reform administration.” He was satisfied with the progress that had been made in the past towards a settlement of the unemployment problem. What was required was a big constructive programme of works to induce men to go out to the country and suhseouently settle- naturally on the land. He sugge-setd a bigffer subsidy should be provided for the Denartment of Scienre'end Industries, and be hoped for good results from the Government’s intention to develop the secondary industries. LABOUR MEMBER’S CRITICISM. Mr J. W. Munro alleged that farmers’ unions, employers’ associations*, and the Reform Government JKad schemed, following the war, to adopt a policy of immigration with the object of bringing down workers’ wages. The result was the present economic position, and the question was whether Labour’s representatives could now trust- the United Party. Referring to pensions, the suggested the- Prime Minister should appoint a committee representative of ail parties to go into the whole question of reform of the present system and to make- recommendations to the Government. This would be a splendid opportunity to break down the narrow party spirit and place the interests of* the country first, and the proposal was particularly to be recommended at a time when the parties were- so unusually evenly represented in the- House. Mr Munro challepged the statementthat there were 1000 more men employed on public works to-day than during the Reform • administration. He considered there were very few more than formerly, and he would be glad to have an assurance- that public works employees were not being paid only the relief rate of wages. He expressed an opinion in favour of the construction _ of the South Island railway extension. and described the decision to write down the railway capital account as one of the wisest things the Prime Minister had done. He said they had passed through three generations of rolling stock, hut had never set anything aside for depreciation or re-. newal. Tile railways had not Iteen given a chance to pay. and he wished the amount written off had been larger. Dealing with the land uolicy, Mr Munro contended the Government always had the right to acquire compulsorilv such land as it. considered was not being employed in the best interests of the country. _ and he would support the Prime Minister in his effort to break up large and comparatively unproductive estates The debate was adioumed and- the House rose at 10. IS pin. till 2.30 p.m. to-morrow.