PARLIAMENTARY PROSPECTS

Hokitika Guardian, 10 March 1931, Page 2

PARLIAMENTARY PROSPECTS

FINANCIAL MEASURES. WELLINGTON, March 7. During the coming session, it is taken lor granted in advance that the Government will experience bitter opposition from the .Labour members. Therefore its plans to meet the financial crisis can only be carried with the approval of the official Opposition. There are members of both the United and Reform parties who strongly oppose a flat rate reduction of 10 per cent on all public service salaries, and it its reported that the Opposition will endeavour to convince the Prime Minister that a graduated scale of reductions would be preferable, enabling the lowest employees to escape with possibly a 5 per cent, cut, while the reduction in the higher ranks might reach 20 per cent. It is an open secret that Cabinet, before deciding to submit to Parliament the 10 per cent, plan, went thoroughly into the question of a graduated reduction as an alternative, but that it was finally forced back to the all-round reduction because in no other way could the saving of £1,1150,000 be obtained.

THE INCOME TAX FACTOR. When large sums have to be secured, the reductions mjiist be substantial over the great mays of the Public Service, as this is where the great bulk of expenditure occurs. It is stated on good authority that the salary total for the whole State service in respect to employees earning £7OO per annum and ove r amounts to about £200,000. Tin# it will be seen that even a 25 per cent, cut in these grades would still leave £1,200,000 to be obtained from the lower classifications. While so much is being said in protest against reductions on the low-paid State (servants, it is fair to recall that those in the higher grades suffered, in common with all salaried employees who are income-tax payers, a 10 per cent, “cut” by way of increased income-tax last year, and that they are certain to undergo a similar cut in their resources by way of another rise in the tax during the current year. As Ministers are forced to the conclusion that the whole mass ol the Public Service must contribute substantially towards the proposed saving of £1,250,000 in the (salary expenditure, any move in Parliament to defeat the Prime Minister’s announced plan is sure to be accepted as a noconfidence challenge to the whole programme, and a critical division will be experienced at a very early stage.

UNITED PARTY CAUCUS. Wellington, March i. The Prime Minister Ms called a caucus of the United mein hers of Parliament for Tuesday flight,