PRELIMINARY SKIRMISH.

Horowhenua Chronicle, 30 June 1938, Page 2

PRELIMINARY SKIRMISH.

DEBATE ON IMPREST SUPPLY.

ATTACK AND DEFENCE OP GOVERNMENT LEGISLATION

1-By* Telegraph—Press Association.) WELLINGTON, Last Night.

The Imprest Supply Bill was introduced in the House this afternoon, the Prime Minister asking, for urgency for the passing of the measure which was granted. The Leader of the Opposition (Hon. A. Hamilton) said the debate on the Imprest Supply Bill was a preliminary skirmish wherein the Opposition was seeking ’as much information from Ministers as possible for use in the main debates during the session. The Bill was a money measure and he considered that that public should be supplied with as much information as possible in those matters. Ho thought that the Government in the past had tended to confuse the issues in the explanation of previous legislation and ho considered it advisable that when Ministers made statements on a Bill of this nature they should do so with as much clarity as possible so that the public could be fully conversant with the facts. There was a tendency to cloud the issues and leave the public somewhat bewildered concerning the true position of affairs. Dealing with the national finances, Mr. Hamilton reiterated the criticism which he levelled in the recent broadcast address at the statement that New Zealand’s public debt had been reduced during the past two years. If the Government had been able to produce a surplus of £BOO,OOO and reduce the National Debt during the last financial year it was all to the good, but he would point out that the Government had borrowed pretty steadily during that time und personally ho contended that the public debt had been increased. Ho knew, he said, that the public debt could be increased by the purchase of assets, but he would ask wha( was the earning power of those assets. The Government had borrowed a total of £7,492,000 and debt redemptions were somewhere about £2,000,000, leaving £5,408,000 additional National Debt.

Where did this £7,000,000 of borrowed money come from, he asked. It had not been borrowed from London because no funds had been borrowed from that source since 1931, and he doubted if the Government would find funds available in the Old Country. The money, said Mr. Hamilton, had probably come from the State Departments such as the Post Office Savings Bank and State Fire Insurance Office.

Mr. Hamilton also expressed the view that a portion of the £7,000,000 of borrowed money hnd been spent on housing, and lie urged that the Government should make clear exactly what amount had been spent in this direction. ■ Ho atso would like to know where the £5,000,000 raised in unemployment taxation had been expended. .Referring to New Zealand's overseas credits, Mr. Hamilton said there had been a drop in these funds of £17,500,000 in the last two years. Of that sum only some £5,000,000 could be accounted for in oversea trade balances, and it was not to the Government’s credit to have a surplus of only £7,000,000 in London when £31,000,000 were required for safety. There was an unexplained shortage of £12,000,000 in our oversea credit and Mr. Hamilton asserted that a large proportion of this was accounted for by the flight of capital. He thought the Government was heading in such a direction that when a time of emergency arose it would have to step in and control all overseas credit. How the Money Was Spent. Mr. J. A, Lee (Under-Secretary' of Housing) said that all that was happening in New Zealand to-day was that the people had been provided with the wherewithal to purchase the goods they produced. , Mr. Hamilton had often accused the Government of spending too much money. He seemed to have forgotten that he had spent in one item alone £420,000 on the construction of a golf course in his own electorate, but when the Government spent money on developing roads and expanding hydroelectric and other public utilities which could be called real national assets Mr. Hamilton seemed to become concerned.

Mr. Hamilton, he said, had preached the doctrine of reduced costs. The Government had shown through the use of modern machinery on public works that it was possible to bring down costs without reducing wages. It had also reduced interest which was another means of bringing about lower costs in industry, but Mr. Hamilton’s alternative to this policy was to cut wages and lengthen hours. Referring to overseas commodity prices, Mr.'Lee said the Gov eminent had no absolute control of prices in London but under the system of curbing speculation which was introduced by Hon. W. Hash New Zealand had received better prices for its produce than would be made under the old system. There had been loud talk about inflation, but the present policy of the Government was the Safest means'of avoiding inflation. Slander on youth.

Sir Alfred Ransom described as slander on the youth of New Zealand the implication through the social security legislation that .the average young New Zealander was willing to depend on the State for provision against old agb. He believed that young New Zealanders were not degenerate and yet all the legislation was in the direction of implying that he was not as good to-day as was the young New Zealander of fifty years. ago. He said he regretted having to refer to what he considered was a very sen ous statement in one of Mr. Savage's

recent speeches. It was that the Government’s policy of cheap money haJ been of immense value to the farmers. Before Labour came into office the interest rates to farmers had been re duceci by a total of over £5,800,000. The present Government had merely carried on the good work. The only reduction he knew that the present Government had made in interest rates had been in regard to interest on the Reserve Bank funds, and this met some of its obligations with cheap money. Sir Alfred considered there was ample money awaiting investment in New Zealand, but it was not available because of the lack of confidence in the Government and many millions had gone out of the country. He charged the Government with having done nothing to remove the financial yoke from the necks of the farmers. Flight of Capital. The Prime Minister (Mr. Savage), replying to Sir Alfred Ransom, said the honourable member for Pahiatua had said that money was leaving the country and would come back again when the Opposition was the Government again. “If what he says is collect, said Mr. Savage, “that means that the people who are controlling the funds will go on in the future as they have done in the past and dictate the legislation of this country. I want to say very frankly that the money interests are not going to be allowed to dictate the < policy of this country. I think the people will understand that. I ha\e said it many times and I say it again.”

The Prime Minister mentioned interest rates and recalled the statements he had made in Pahiatna that more farmers to-day were getting cheaper mortgages than ever before. The Government was taking interest rates down all the time. It was only the firm stand taken by the present Government that had kept all interest rates down. Speaking of Mr, Hamilton’s speech, Mr, Ravage said apparently the leader of the Opposition was concerned over the welfare of democracy. This was a new philosophy coming from Mr, Hamilton There had been a time when a substantial portion of the democracy was not allowed to participate in politics and H was the action of the present Government made it possible for them them to enjoy civil rights. They could exercise thase rights cither for or against the present Government. He thought it would be better for them to vote for the present Government than to vote for those who had cut their wages.

Referring to Mr, Hamilton's accusation that the Government was trying to confuse things in order to make it difficult for the people to understand, he said the leader of the Opposition had followed this assertion with a Budget speech. ‘‘l am not out to make a Budget speech here to-day," declared Mr. Savage. "Is it reasonable to ask that on the second day of the session the Government should produce a Budget? I have promised that the Budget will come down as soon as the Address-in-Reply debate is over. The Opposition will then have an opportunity to analyse the whole position. ’ ’ How did the leader of the Opposition

propose to reduce costs, asked idi. Savage. He must cut someone's income in doing so, and if he did not reduce people’s wages then he would reduce the number of people earning

wages. Mr. Hamilton: Do you say that all costs arc wages? Mr. Savage: All costs are someone else’s income and I want to know whose income you are going to cut. Mr. Savage continued that he was not an advocate of spending money foolishly. He was advocating getting something for the money that was spent and the llnancial statements would shou; that the Government had got something for the money that had been spent. .Reverting to the question of interest rates, ho said that the day of high interest rates had gone and he accused the Opposition of being more concerned with big financial interests than with the rank and file of the people. ,

Mr. W. J. Poison: There is no justification for ’that. Mr. Savage: All we have to do is to look at your record. There is nothing we arc trying to do that will strike a blow at the people’s welfare. Our job is to make it better for all the people. Socialisation of Land. Mr. Poison said no one could say the Prime Minister was anything but sincere. However, the Opposition thought he was often misguided. One of the ways of reducing costs was to reduce taxation, and in this he thought Mr. Savage would agre with him. Did the Government say it was impossible to reduce taxation? Was it not better ■to* have low taxation, the people thus having -more money to spend? The Prime Minister himself had stated rejccutly that a readjustment of taxation was long overdue and in 1935 he had ’contended that taxation must be reduced.

Why, asked Mr. Poison, did not Mr. Savage give details of the plan he.said Labour had ready for the financial insulation of the Dominion in the event think the people ot the country had of another depression. He did not think the people of the country had fallen for this statement. He also would ask why the Prime Minister had not thrown more light on the question of social legislation. Mr. Savage had stated that he was not going to socialise farms, 'put socialisation was the objective of the Government, and how could it be achieved without touching the farmer?' The debate was continuing when the tea adjournment was taken at 5.30 p.m.

Insulating New Zealand. The debate on the Imprest Supply Bill was continued by Mr. W. A. Bodkin when the House resumed at 7.30 p.m. Mr. Bodkin, referring to oversea credits, also drew, attention to the decrease in the Loudon funds. Taking 1928 as a basis he said that in that year £IOO worth of New Zealand’s produce bought £IOO sterling’s worth of manufactured goods overseas, but in 1932 £llß worth of New Zealand produce bought only £75 sterling worth of overseas manufactured goods. When members of the Government spoke of insulating New Zealand they had to show from what source they proposed to get money to balance the difference between £llft worth of New Zealand produce and the £75 worth of overseas gpods. Non-Borrowing During Depression. Kev. A. H. Nordmeyer said that during the depression the then Governmerit neither borrowed in London nor in New Zealand. This, too, he added, at a time when men and women weie starving in this country. Who, he asked, had dictated this policy of nouborrowing? Was it the British Gov "lament, the Bank of England, or that mysterious coterie known as the city of London.” According to Opposition speakers, he said, New Zealand s debt was continuing to increase alarmingly, but he asserted that New Zealand's •debt in London had been reduced considerably. Mr. Hamilton: Is that the National Debt?

Mr. Nordmeycr: It is the London debt. I propose to make my speech in my own way without assistance from members of the Opposition.

Continuing, Mr. Nordmeyer dealt with the financing of the Government’s bousing scheme. Money was being offered to local bodies for housing at 3 per cent, and the Opposition had stated that not many local bodies were taking advantage of it. He understood from the Under-Secretary for Housing that quite a few local bodies were taking advantage of the Government’s offer. Mr. Lee: Yes, thirty of them are.

“Great Piece of Misrepresentation.” Et. Hon, J, G. Coates denied that the previous Government had not loweied the rates of interest throughout the country and asserted that there had never been a greater piece of misrepresentation in the history of the country than the Prime Minister's statement that the present Government was responsible for the reduction of interest rates. They at least expected the Prime Minister to put the case fairly. The truth of the matter was that the last Government was itself responsible for the reduction of interest rates in the Dominion. The . Labour Government had not initiated this interest reduction. Mr. Coates affirmed the opinion that if the Oposition had been returned to power at the last election every individual in New Zealand today would have been receiving much better real wages and incomes than the nominal wages and incomes they were receiving now. If the Opposition had been then returned to power costs would not have been allowed to have been artificially increased; as was the

case through the blundering tactics of the present Government. New Zealand’s Debt.

Mr. J. G. Barclay r«id from 1920, to 1935 New Zealand’s debt in London had increased by over £64,000,000. In the two and a-half years that Laboui had been in power the overseas debt had decreased by £2,700,000. Mr. Barclay referred to the increase in the number of accounts and the amount of deposits in the post office savings bank and said the Labour Government had made it possible for the people to have something with which to be thrifty. “Lack of Courtesy” Mr. H, S. S. Kyle said he believed the policy of the Labour Government was still for the socialisation of production, distribution and exchange. He complained of what he characterised as the lack of courtesy on the part of the Minister of Public 'Works (Hon. R. Semple), who, he said, had visited and spoken in his (Mr. Kyle’s) electorate of Iticcarton without notifying Mr. Kyle of the fact beforehand. Pinance Minister’s Reply The Minister of Finance (Hon. W. Nash), replying to the debate, said lie failed to understand why the Leader of the Opposition had said that the Labour Government had struck a lucky patch in regard to the Post Office Savings Bank deposits. Why, he asked, was there more money in the Savings Bank to-day than there had ever been before? It was because the income of this country was better distributed than it had ever been before. Speaking of the £12,000,000 overseas credits which the Leader of the Opposition had said had been unaccounted tor) Mr. Nash said Mr, Hamilton was just about 100 per cent, wrong. The actual figure was only about half that mentioned by Mr. Hamlilton and he thought the Government would be able to give a reasonable explanation of it when the proper time came to do so. The member for Pahiatua, said Mr. Nash, had stated that there was plenty of money awaiting investment in the country as soon as there was a change of Government. If this were correct it showed that certain people were holding up the credit ot ,'the country and also demonstrated that the Government must bo more powerfm i than ever in order to counteract such i influences. &

t The Bill, which makes total provision 0f.£12,914,000 for a period of two months, was rapidly put through all stages after the Minister’s reply and the House rose at 12.35 a.m. until 2.30 p.m. to-day.