THE BUDGET

Hokitika Guardian, 12 August 1930, Page 8

THE BUDGET

DEFENCE OF PROPOSALS. PRIME MINISTER WINDS UP ' 'DEBATE. WELLINGTON, August 8. A vigorous reply to criticism levelled at the Government during the financialdebate was made by the Prime Minister/ the Hon. G. W. Forbes, in closing the debate, in tile House of Representatives this afternoon. He- justified the Government’s taxing proposals as being necessary in the. circumstances, making special reference to the petrol tax and pointing out that if the House did not agree to it, the Government had no intention of paying, the ' giraritH. and subsidies which it Was designed to meet, but which had hitherto come out of the Consolidated Fund. POLICY OF ECONOMY. Mr Forbes said, that the bulk of the criticism had been quite fair, but he had not expected that a Budget containing such drastic proposals Would be received by the House without some dissension. The, Government’s endeavour had been to spread taxation as i widely as possible so that as many of .the community as possible would bear their fair share of‘the burden: The member for Auckland' Suburbs (Mr H. G. R. Mason) liadi’asked for the Prime Minister’s policy. That policy’; was contained in the statement that was issued before the session in which the country was informed that there was an estimated deficit of £3,000,000; *.„'e proposals placed before Parliament were designed to meet that situation. For this year at any rate the Government’s policy would be to practise economy and sound finance. The Government had introduced a very important policy measure in the unemployment Ball, but it had not been given any encouragement for doing so nor one word of praise for the efforts it was making to meet a very difficult situation.' ' ' v-•

! When the Budget was presented, it ‘had given rise to a good deal of laughter, and charges were made that the Government had come into office with the avowed intention of reducing taxation, but that it had acted in an entirely contrary manner. But the country had to recognise that the first tiling the Government was called’upon to do on taking office w;as to reduce expenditure and to effect economies in other directions. " When'the Government was criticised for not carrying out its policy it had to be remembered th'at it did not have the money at its eoinmand to do what it’ had hoped to do!.. ... . .. .... 1 ‘' .b'

Mr A. Harris (R., Waitemata): You coukl have borowed £70,000,0W.

Mr Forbes siiid that there'had been a serious drop "in fheprices for priniary produce, ahd’the ! GSvferhhieht had 'been bound to recognise tlvalt tliis would hare a serio its Effect "on the'national finances . In view of that lie had asked- the Treasury and 1 the'bfificeik' in dirge' of the Revenue Department to give him art estimate of what in their opinion'would be' the falling off in revenue for the current financial year. He was quite willing to accept the advice Of those heads of Departmens, who had over a long period gained considerable experience in the conduct of the country’s finances. The information lie had received showed quite definitely that there was: an estimated deficit of £3,OOb.OOO. He considered that he had 'i' ' ' been quite justified in placing the position before the country, Mr Forbes added, and felt gratified with the response that his statement had received. He had considered that the ma tter . was'far too serious for the Government to say nothing until the facts became public through necessity." lie was confident that certain of tile Estimates wbukl prove better, than at first anticipated. ■ ~ • • • • .

‘ SPREAD OF TAXATION. jThe criticism of the Hon. W. Downie Stewart was born of experience, the Prime Minister said, and lie had been interested in the suggestion that rather than impose ft large number of small taxes the Government .should have Concentrated on one or two large revenueearning sources. “1 have not 'l>Ccn in office'very'Jong, and so I have not learned the strategy, which the honourable gentleman, has,” Mi* Forbes said, “but 1 felt that in a matter of national importance such as this it would be a; fairer thing to spread the taxation as widely as possible. While there is a certain amount of irritation Caused by the smaller taxes, at the same time it brings it home to every member of the community that he is doing" his' fair share in a time of national difficulty Tile moral effect that everyone is-doing: his bit is, I think, quite worth while in those .circumstances.’’ •The endeavour of the Government was to spread taxation as widely as possible. ' The siiggesuoh'liad'•also‘ been made b,v Mr Stewart that the Government should have taxed the people who wrote letters. The Prime Minister said lie did not see that this class of the community should be singled out in par ticulad. ,To his mind the users off the Pqst Office did not deserve such treatment. PETROL DUTY. jDealing with the petrol tax, Mr Forbes said that much said agnin.s|; il had fecn uttered from a very narrow viewpoint. The Government had decided that the burden of taxation in this respect should be removed from the

shouldertr of the general) taxpayer and placed oh the users of the roads themselves. A good deal of exception had been"'taken to the transfer 61 £2UU,UAJ from the Public Works Fund, it being alleged'’that the Government had broken its promises.' The original grant to the Highways Fund was'made' from the proceeds of the’'highways tax, but this hacl proved too small. "It was then decided that the amount'should be increased j blit the payment' was only continued so long as the, Government had the money to spare. It was now said that the funds were being robbed. The money had beeii paid' only so long as the Government was in a position to do so. Now that it was not, the users of tlie roads were being called upon to pay by’ means'of the petrol' taxi The money was not being denied*, but-a stop had been put' to from the Consolidated Fund. TiiTHe same way the ddlPbir the fund for Wnbsidie.s had been'* transferred.

CONSEQUENCES OF REJECTION

“If! the House turns down the petrol tax there'/will be no Money for backblock roads,” Mr Forbes said. “The positioTrus-that at the“present tiSne it is- impossible to made payments that were made in the past, and they will not be made so far as the Government is concerned.” If the House decided that the Go - ernment should not take the steps proposed to raise enough money to make the payments that would be the end of 1 it. The amounts paid to the Highways Hoard and to local bodies would simply not be available; The question was one entirely for the House. He denied , that any discrimination had, been sliown in the allocation of money •lor back-block roads, quoting the following sums which had been spent in the district of various members:— £ United-a- ... ... 7,280 Reform;' ... ... 15,118 Labour 20,421 Independent -Vand Country •'Painty 4' ... ' 11,200