BUDGET DEBATE

Hawke's Bay Tribune, Volume XXIV, Issue 233, 14 September 1934, Page 8

BUDGET DEBATE

FINALITY REACHED Minister Answers Critics lajWinHiLL KUSH AKKEdltu By Telegraph—Press Association. Mjx.xiixxGWxx, September 10. The finance deoate was concluueu m rue iiouso oi ivopresenlauves wns aitovnoon wuuu tuc xixiu.bvei' oi xiuauev, tile ivt, lion. <J. u. uoaves, reputd to speeches wiiue in mu past; AUA'iinghc. Mr uoaies said tuac n AooMrd. as it tue uowhaaall rusn mat set in. tiiree or lour years ago had been arrested, and lie tnougut tnat me country couid neave a sigh, of relief. ine Government had received messages from all parts of New Zealand expressing appreciation of tho work of the Government, and congratulating it on the better outlooas as indicated by the Budget. The Government, said Mr Coates, bad reached the stage where it coulu make ecouomic adjustments, and it felt m the first place that it should recog nise the part played by the Public Ser vice. Officers of the State, high and low had played their part well, the Government having received nothing but willing co-operation from them. The Government decided to increase by 5 per cent ail salaries in the Public Service. Had only tho lower salaries been increased it would have produced anomalies that would have taken years

to overcome. Regarding statements that there should be a general increase outside tho service, Mr Coates said that such a declaration would have beeu definitely unfair. Private employers had not called on their employees to anything like tho same extent as far as wages were concerned.

Regarding tho statement by tho Hon. E. A. Ransom that he hoped that the year would end with a surplus of £1,000,000, Mr Coates said that much hard work had been put into tho preparation of the estimates in order to get the figures as correct as possible. It might well be that the £BOOO surplus would be exceeded, but it would require tho strictest economy if they were to finish the year with a surplus of £BOOO. It was true that windfalls came from time to time, and one bad occurred since the Budget was made up. Coming to pensions, Mr Coates said that while he and other members of Cabinet would have liked to give the old ago pensioners restoration from April 1, he was unable at the moment to say 'that he could do that. Referring to the unemployment tax, Mr Coates said that the tax bore more heavily on the community than any other tax. It had been stated 'that in making the reduction of twopence the unemployed would' suffer, but that was not so. Tho board had made provision for a peak of £75,600, but actually it was less than £60,000. The Budget proposed an increase of £1,000,000 for public works above last year, and the Government also was considering a housing scheme. He thought that flic reduction of twopence could bo justified. EXCHANGE CONTROVERSY, Dealing with exchange, he said that Mr W. D. Stewart had said that the farmers might have lost more 'than they had gained if they took into account the ill-will and irritation that had been caused. It had been clearly shown that tho raising of tho exchange did not produce a fall in imports, said Mr Coates, and that the raised exchange did not and could not diminish New Zealand’s ability to purchase goods from overseas; that whole sections of tho farming community had been saved from bankruptcy, the entire fruit industry having so been sav ed; the national income had been increased and economic life'continued in the face of an imminent crash. Tho increased exchange had maintained icvenue and prevented losses in Government lending departments. In reference to statements that the Mortgage Corporation might add to the national debt, he would ask whether the State guarantee behind the Public Trust, State Fire Insurance and Government Life Insurance added to the national debt. The gold export duty brought in £117,006 but no-one couid say that with the present price of gold, tho tax was not justified. Tho raising of the exchange rate had added about 13 per cent to tho overseas debt charges of about £l,OOO 000. Even if that were taken from the Budget, he could not see where Mr Stewart would get his substantial surplus from. Coming to old age pensions, Mr Coates said that in 1898 the pension was 7s a week, in 1905 10s, in 1917 15s, in 1924, 17s 6d, in 1932 15s 9d and in 1934 16s 6d. It would be noticed that the pension was now higher than at any time prior to 1924, while it should also be noticed that tho cost of living had fallen considerably in recent years, having dropped nearly 20 per cent since 1929.

SIZE OF NATIONAL DEBT. Dealing with Mr R. McKeen’s statement that in the space oi six years the national debt had grown by £33,000, 000, Mr Coates said that in 1920-30 tho public debt was £267,000,000, and in 1932-33 it was £282,000,000. That had been increased by £1,277,000 in the 1933-34 year, his year of office, and that was in part due to the loan conversion operations. Apart from that, the increase m the long-term debt last financial year was £786,000, To get his £33,01X1,000, Mr McKeen had apparently used the temporary amount issued under the exchange indemity arrangements, and that was now entirely wiped out, tho floating debt at the present being about £2,500,000. Mr Coates added (hat the estimated deficit was not reduced by manipulating the highways fund as suggested, but by increases in practically all items of revenue. In addition, interest on railway capital showed an increase of £291,000 over the estimate The Government was also saving £255.000 on the expenditure side Mr Coates, tn dealing with the eon j version of silver and the comments b;- j the Auditor-General, quoted from cor i rcspondence and cables that had passen ■ between the British Government and the Imperial mint and the New Zealand Government, ami said that ever care was taken in the negotiatin' that took place, Tfio House resolved itself into com- i nnttee of supply. Progress was reported »n<t leave was given to ait 1 again '