ECONOMY MEASURES

Manawatu Standard, Volume LI, Issue 116, 17 April 1931, Page 2

ECONOMY MEASURES

FRESH LEGISLATION INTRODUCED

ANTICIPATED SHORTAGE OF £5,550,000

"A second Finance Bill, embodying the recommendations of the Cabinet Economy Committee was introduced in the House of Representatives yesterday. The measure provides chiefly for economies in administrative costs and is aimed to meet a probable shortage in revenue of £5,500,000, the figure previously mentioned by the Prime Minister having increased by £1,000,000.

A discussion was also taken on the suspension of the No. 5 unemployment scheme and the Railways Bill.

LEGISLATIVE COUNCIL

MORTGAGORS’ BILL AMENDED,

Per Press Association.

WELLINGTON

In the Legislative Council this afternoon the Mortgagors’ Relief Bill was reported from the Statutes Revision Committee with amendments.

Sir Thomas Sidey explained that it was proposed to limit the operation of the Act until December 31, 1932. A now clauso had been inserted dealing with contracts for sale mndo after March 18 and prior to the passing of the Bill. Moving the second reading Sir Thomas said it had been made nocessarv by the economic conditions of the country. Hon. R. Moore said he believed that mortgagors should receive every consideration, but ho believed the benefite of the proposed legislation would not balance its disadvantages. Any legislation providing for the breaking of contracts was dangerous.

lions. G. J. Garland and D. Buddo supported the Bill. The amendments outlined were agreed to in Committee and the Bill was passed. The council rose at 4 p.m.

RECORDS DESTROYED AT NAPIER.

LEGISLATION IN PREPARATION,

The House of Representatives mot at 2.30 p.m. The l’rimo Minister, Rt. lion. G. W. Forbes, replying to Mr J. Linklater, said hooks, instruments, and plans constituting records of the land transfer and deeds registration offices at Napier wero housed in rooms believed to be fireproof and would no doubt have resisted an ordinary lire or even an cxtraordiny fire if water had been available. The doors wero locked and the window shutters closed. After the earthquake the records of tho Stamp Office that wore destroyed were of comparatively littlo value.

The most important records of that office, namely documents restored under tho provisions of the Companies Act, were not destroyed. It was proposed to obtain a report from tho Public Works Department upou the question of the efficiency of tho firo resisting qualities of all tho rooms in other towns in which land transfer and deeds register records are housed. Replying to Mr H. M. Campbell, Mr Forbes said the land transfer and deeds registers for the district of Ilawke's Bay having been totally destroyed it was impossible to register instruments in the usual way, but arrangements had been made for tho reception, filing and recording in Wellington in tho meantime of all instruments that may require to be registered so as to give all tho protection possible under tho circumstances to persons dealing with land titles. Arrangements wore also being made to obtain copies of the instruments of title in the hands of solicitors and others to form a new register and a Bill was being drafted to pro- 1 vide as far as possible for tho many difficulties that tho destruction of registers must have created. Registration oflices would be opened in Napier as soon as the work of construction of the new registers had been put in satisfactory working ordor and accommodation for the registers and staff could be provided. QUESTIONS ON BANKING.

Mi- T. W. McDonald asked the Prime Minister whether he would introduce a Bill to amend the bank law so as to compel the banks to pay a reasonable rato of interest on all depositors’ credit balances on current accounts. Mr McDonald also a-sked whether the Government would amend the law so as to compel the £6.000,000 in gold to bo hold by the banks as a dead asset to be forthwith made revenueproducing. In reply, Mr Forbes said the Government- did not propose to introduce banking legislation this session.

A simiiar answer was Riven to Mr F. Langstono who raquosted the .Government to stop the banks from “imposing erratic and high rales of interest upon the producers and exporters of New Zealand, thereby creating dislocation of trade and increasing unemployment.” Mr C. H. Chapman asked the Prime Minister whether, seeing the Government had four representatives on the Bank of New Zealand, the policy of the Government was indicated to these representatives, and if so was the Goevrnment responsible for tho large amount of the bank’s assets invested in Australia? ADD PARLT —1 —1

Mr Forbes replied that while the Government did confer with its nominees on the bank directorate it did not interfere with the general management of the hank. Consequently the Government was not responsible for the investments in Australia, but the attention of the banks had been drawn to the statement made. In answer to Mr D. Jones, who asked whlether the Government would put British countries with depreciated currencies on tho same footing as foreign countries and treat the importation of poods as dumping, the Prime Minister said action had already been taken to meet the position created by tho depreciated currency of Australia in cases where secondary industries were prejudiced through tho importation of goods from that country. Mr J. O’Brien asked whether the Government would force the banks to bring the exchange rates between New Zealand and Australia to reasonable limits whereby New ■ Zealand commodities would he sold in Australia without being subjected to tho penalty of tho present high rate of exchange. “The rates of exchange . between Australia and New Zealand are largely govprned by tho relative position of tho rates of exchange Australia on London and New Zealand on London respectively,” replied Mr Forbes. “The rates of exchange could not be brought near parity without increasing the rates of exchange between New Zealand and London.” It appear that the Dominion was already being prejudicially affected by Australian conditions and to do as tho honourable member suggested would ordy tend to increase our difficulties. THE COMPANIES ACT. Replying to Mr G. C. Black, Mr Forbes said the recommendation of tho Tobacco Industry Committee, that tho law be amended to provide for tho registration of any series of bonds issued by a joint stpek company, would be considered in connection with tho Companies Bill which was now in courso of preparation. Every effort would bo made to introduce that Bill during tho next ordinary session. SUSPENSION OF RELIEF. THE No. 5 SCHEME. LABOUR ASICS FOR DISCUSSION. Per Press Association WELLINGTON, April 16. In tho House this afternoon, Mr H. E. Holland, Leader of tho Labour Party, moved tho adjournment of the House in order that a discussion might take placo on tho suspension of the Unemployment Board’s No. 5 schema and the alterations in tho schemo outlined by the Minister of 'said tho Minister’s announcement involved a serious change of the schemo as laid down in the Act without any reference to Parliament whatever. Mr Holland referred to the reduced rates on relief works and the decision of the Government that

Mr J. A. Nash said it was unfortunate the word “shall” was not in the Act in connection with the payment of sustenance. “Surely to goodness,” he said, “single men are entitled to earn enough to keep them in food and they cannot do that on 18s a week.”

Mr \V. D. Lysnar said there was plenty of work for single men if they would go out into the country instead of “sticking around tho towns because they want to attend picture shows.” Mr Lysnar proceeded to contend that the operations of trusts and combines were at tho root, of tho unemployment problem. They wero causing many people to ‘‘go under,” and there would he such a demand throughout tho country that whatever Government was in power would soon have to grapplo with tho situation.

Hon. S. G. Smith said that under the new No. 5 scheme single, men would bo given two days' work per week for three out of four weeks. This left them 18 days in which to look for some other work. Tho board had done its very best to meet the serious problem with which it was faced, and only the strained finances of the board and tho country had compelled it to call a halt with tho No. 5 scheme as it had been conducted formerly. It had been stressed that the board's actions had amounted to a violation of an Act of Parliament, but Mr Smith contended that the Labour members could not got any legal authority to support such a contention. There was no statutory right that sustenance must bo paid. Mr Parry : Wo expected tho Act to bo administered in that spirit. Mr Smith, continuing, said that in the case of the English Act there was a contract to pay sustenance, but tho New Zealand Act was distinctive because there was no contract. 110 asserted that what tho board required was a little moro help. He was surprised to find how few members of Parliament were acting on local committees. Mr E. J. Howard : ~\\'o are debarred. Mr Smith : It would be better if tho member for Christchurch South gavo more help intead of so frequently giving us his second-hand music hall witticisms. Mr Howard : I'm not a clown. like you. Mr Smith submitted that this remark should be withdrawn.

Tho Speaker said ho had not heard the interjection, and asked Mr Howard what ho had said.

Mr Howard rcpoated the remark, whereupon the Speaker ruled that it should be withdrawn.

Mr Howard drew the Speaker's attention to what tho Minister of Labour had paid about him (Mr Howard).

The Speaker asked Mr Smith to repeat the remark, and on Mr Smith doinpr so, rhe Speaker ruled that it, too, should be withdrawn. POWERS OF THE BOARD.

Continuing, Mr Smith said it had been stated that the Unemployment Board had reduced relief wages. lie pointed out that the board had no power to fix wages. What it had done was to state that it would not subsidise wages paid on local body relief works beyond 9s a day for single men and 120 6d for married men. There was nothing to prevent the local bodies themselves from adding to these rates. Mr Sullivan: It has been interpreted that unless 9s a day and 12s 6d a day are paid, relief works will not be subsidised at all. •

Mr Smith: That is not so. It simply means that that is the extent of the board’s subsidy on wages.

Mr Smith said it had been established, when the original No. 5 schemo was in operation, that men who should not properly havo been registered under tho category of unemployed workers had been receiving employment in preference to men more in need of work. One man, who admitted ho had a private income of £3 10s per week, for instance, had complained that under tho more stringent regulations he would not be able to continue getting work under the No. 5 scheme.

Mr Semple: That must bo an isolated case.

Mr Smith 6ai<l that men who had been drawing pensions for three, four, five, six aifd even seven years without seeking work previously had been taking advantage of the No. 5 scheme. If it had not been for such cases as this, and if some local bodies had not dismissed regular employees so that they could bo engaged under the No. 5 scheme, it would not have been necessary to suspend the original scheme so soon. Dealing with the new regulation of “no levy, no relief,” Mr Smith said that where a man was forced to default payment of the levy through absolute poverty, the local committees would ho able to advise him how some means could bo devised to meet the difficulty. The regulation did not apply to youths aged 18 to 20 who wore engaged in farm work under scheme 4a. These youths under the Act were not compelled io pay the levy. Mr Smith outlined the various schemes the board had put into operation and the amount of work provided under each, and contended it could at least bo claimed that the board had dono its best under very difficult circumstances. When people realised the net effects of its activities they would admit that great results had been achieved. Mr It. A. Wright said it would bo admitted that the board had done good work, but the fact remained that people were still out of work and the problem was still facing the. country. Mr It. McKeen mentioned that Mr Smith’s statement that time would he allowed between jobs under the new No. 5

there would he no sustenance without work. In spito of this fact it was the will of the House that sustenance was to be paid if work was not forthcoming. The Government had cut the rate down from 14s a day to 12s 6d for married men and 9s for single men and had also under the No. 5 sehemo placed them on rationed work. Now they were to have a far more drastic change. First of all where no levy was paid thero was to bo no work. In the Ireginning of the scheme a man unable to pay was ahlo to gain exemption, but if lie got cvemption now lie could not get employment under the scheme. It was bad enough in the case of a man who was able to pay the levy, but if the man’s circumstances were so dire_ that ho was unable to find the money his position was desperate, and if anyone was entitled to employment ho was. A singlo man would not bo able to buy _ even food with the money he would receive under the scheme and it would be utterly impossible for married men to provide their families with the bare necessities of life. A singlo man would receive 18s per week, and even if lie slept in the parks lie would not be able to buy sufficient food for himself, yet Parliament had decided ho was entitled to sustcnanco at the rate of £1 Is per week. The Unemployment Board had done a good deal to earn condemnation but he described its latest action ns a stupid violation of the law relating to unemployment. Mr W. E. Parry seconded tho motion and supported Mr Holland’s remarks. He said 38,000 men and their families would be affected by the suspension of sehemo No. 5. Ho appealed to tho Government to set up hostels in various cities whereby women would at least bo guaranteed food and shelter for tho night.

Mr D. G. Sullivan said the Government was neither providing sustenance nor employment and its position could not be justified. It was up to the Government to find money and keep its promise, ltiado when the Unemployment Bill was put on the Statuto Book. LOCAL MEMBER’S PROTEST.

scheme for men to find work, but there was no work to be found.

Discussing unemployment among women in Wellington, Mr McKeen said thcro -were about 1000 without w'ork. Ho suggested that hostels should be provided in tho main centres for theso women. Mr J. S. Fletcher said the Government; had asked for co-operation, but it had taken no notice of suggestions made by members. For instance, ho had suggested the installation of a petrol plant, which would provido immediate employment for 200 men, besides saving the country money. While in Canada ho had been approached by a company which, he said, had actually been informed by tho Government that there wero no areas of specified acreage that would yield gold at 7d per yard. Mr Fletcher added that ho was satisiied there was adequate scope in this quarter. Hon. A. J. Stallworthy said there was no reason for anyono to starve. Women's organisations had informed him that there was ainplo provision to meet the conditions of which members had complained. Tho debato automatically lapsed with the adjournment of the House at 5.30. ANOTHER FINANCE BILL. MEETING REVENUE SHORTAGE. MORE ECONOMIES PROPOSED. Per Press Association. WELLINGTON. April 16. Introducing the Finance Bill No. 2 tho Prime Minister said:— "Tho Bill is a further instalment of the measures deemed necessary by the Government in view of tho anticipated deficit, in tho current year's Budget. The Financo Bill No. 1 now become law will, it is estimated, socuro an economy in tho public service to tho extent of £1,390,000. Tho Bill now being introduced if passed into law will by cutting down certain services and making availablo some additional resources, assist tho Budgot to the extent of approximately £1,525,000, but of this amount approximately £220,000 is already included in the estimated savings resulting from tho first Financo Bill.

“In the main the Bill gives effect to (hoso recommendations of the Economy Committco for which legislation is required and which it is necessary to put into operation at once in order to secure the savings over the full financial year.”

Mr Forbes explained that at present New Zealand's share of reparation moneys in respect of the Great War was paid into (he loans redemption account and used for the redemption of war loan securities. This provision had heretofore been additional to the redemptions effected under the provisions of the Repayment of the Public Debt Act, 1925, but in order to relieve the present financial position it was proposed in tho Bill to provide for these moneys being applied to redemption of debt as part of tho provision required under tho general debt repayment scheme, instead of being additional theroto. Tho operation of the clause had, however, been limited to two years as it was desirable that, as much money as possible should be devoted to debt repayment, but during that period it would relievo taxation to tho extent of £53,000 a year. BENEFIT OF SALARY CUTS. "Tho Finance Bill No. 1," continued Mr Forbes "authorises a 10 per cent, cut in the salaries, allowances and other emoluments throughout tho service. The question arose as to tho position of certain trading departments of the State, and the extent to which savings mado by tho cut should be available for tho relief of the Consolidated Fund. Tho Government decided that tho Consolidated Fund should benefit to tho full extent of the salary reductions. In the case of tho Post Office, the postal rates wero increased as from the beginning of March, and it is estimated that tho increase will benefit the Consolidated Fund by approximately £900,000 per annum. The assistance to the Consolidated Fund from tho salary cuts in tho case of the Public Trust Office, Native Trust Office, Government Insurance and State Fire and Accident, Insurance will amount to £31,000.

“The other provisions in tho Bill are proposals which must havo legislative sanction to be effective, and are estimated to save about £75,000 a year. “Tho administration expenses of the National Provident Fund are borne by tho Consolidated Fund, and amounted for tho last financial year to over £20,000. Investigations by the Economy Committee havo shown that these expenses can bo borne by the fund itself, and provision is therefore more to provide for that adjustment. The basis of the subsidy under the provisions of tho National Provident Fund Act, 1926, is to be reduced from one-fourth to onefifth o.f the contributions, producing a saving to the Consolidated Fund of £12,000. Tho Economy Committee is satisfied, after a verv close examination of tho position, that this alteration will not projudicc tho stability of tho fund. SAVINGS IN EDUCATION.

‘■ln regard to education, I have already announced the decision of the Government to set up a special committee of investigation directed toward economies rather than the general policy of education. This committee will bo non-parliamontary in its constitution. Pending the investigations of this committee, which will take some time, it has been found necessary to deal with the most urgent matters. Provision is accordingly made in the Bill and in regulations which the Government has approved, and the savings involved in these economics is estimated at £230,000. MERGING OF DEPARTMENTS

“Tho Government has decided to make tho following amalgamations of departmCt Public Service Superannuation Fund with the National Provident and Friendly Societies Department. 2. .The Immigration Departnmnt, whoso activities are now severely restricted, with the Department- of Labour, and the combined department with tho Mines Department. . . , 3. Census and Statistics, now a subdivision of tho Department of Internal Affairs, to be transferred to Industries and Commerce. 4. Justice and Prisons to bo amalgamated, and the offices of Registrar-General and Electoral to bo transferred thereto. 5 Forestry to bo amalgamated with Lands and Survey, thus reverting to the position which obtained prior to the setting; up of a soparato department. 6. The Native Department, Native Trust Offico and Cook Islands Department to be amalgamated in one department. “Where it is necessary to amend legislation to give effect to these amalgamations, provision is made in this Bill. ADDITIONAL SAYINGS.

“Tho further economies proposed by the Economy Committee and approved by Cabinet will be reflected in tho departmental estimates, which will be submitted to Parliament in the ordinary session and, in general, will bo effective as from the commencement of the current financial year. These additional savings may bo summarised as follows: Legislative Department, £3500; Treasury, £2140; Land and Income Tax, £1180; Stamp Duties, £3200; Public Buildings £16,400; Maintenance and Repair of Roads £25,600; Native Department, £6700; External Affairs £19,500 (principally a reduction in tho Now Zealand contribution to tho expenses of Samoa) ; Cook Islands, £ll 000; Industries and Commerce; £17,700; Justice and Prisons, £4450; Police, £1700; Pensions Department, £2950; Minos, £3700; Internal Affairs, £15,550; Public Service Commissioner’s Office, £800; Printing and Stationery £6500; Mental Hospitals, £12,900; Health £28,800; Defence Department, £38,700'; Customs, £4360; Marine, . £63,200 trine nrincipally to tho fact that ail item for a new lighthouse vessel, £61,000, was disposed of in tho last financial year) ; Labour Department, £5050; Lands and Survey £l9 800; Scenery Preservation, £1300; Valuation, £6000; Electoral, £3500; Agriciilturc £29,800; Scientific and Industrial Research, £15,800; total, £371,780. “In addition, sundry reductions have been made in the expenditure under various special Acts of the Legislature. In regard to tho proposed amalgamation of departments, I may _ say that it is not risible io assess tho savings that will be effected thereby but the policy of amalgamation is bound to bo reflected in readjustments of staffs which will bo further reflected m savings in standing items of all departments such as travelling expenses, fiold expenses and allowances, and office exP °" S “' cor tain amount of retrenchment and reduction of staffs has been found inevitable but the effect cannot be fully gauged until the departmental estimates for the year are completed. . ‘*l recognise that in tho time at its dispoeal the committeo was unable to go more fully into tho question of tho co-ordina-tiqji of some of our public services, as this

would liavo entailed inquiries in the field and examination of working conditions that could not bo visualised from Wellington. In some departments that are greatly divided the tendency has been to overstratify tho services, thus making the formulation of decisions and tho prompt execution of policies cuinborsome and expensive. “The lending departments havo each evolved practices and machinery for dealing with kindred questions in a manner that suggests overlapping. Botween these there should bo the greatest co-ordination, especially in their contact with tho public. There have grown up small distinctions and differences in the handling of the same kind of problem which are not appreciated by customers and applicants. “Then tendency to be self-contained and apart 'is being corrected, so that the public service may in reality bo a facile, efficient and economical instrument for the good of the country. SAVINGS SUMMARISED.

“Tho effect of the Government's proposals, both legislative and administrative, may he summarised as follows: —

Reduction in salaries and wages 1,390,000 Economics apart from salaries and wages 700.000 Use of reparation moneys 330,000 Additional postal revenue 900,000 Total 3,320.000 "The country will realise that, although much has been done and is proposed in the measures I have outlined to bridgo the gap in the Budget, much remains still to bo faced. ESTIMATED SHORTAGE OF £5.500,000.

“When the financial position was placed beforo the country early in February, the prospective deficit for this iinaneial year was estimated at £4,500,000, but a recent revision of tho estimates in the light of the fuller information now available shows that tho position has changed for tho worse, in that tho budgetary shortage to bo made up is increased by £1,000,000, making a total of £5,500,000.

"The principal item concerned in the increaso in the shortage is interest on railway capital. "Apart from the benefit from the reductions in salaries and wages which comes in on tho other side of the picture ns part of the action taken to remedy the position, it is now estimated that only about £350,000 can be paid to the Consolidated Fund by way of interest on railway capital. This is a shinkage of over £1,000,000, compared with the amount allowed for in last vear's Budget. TOTALISATOR REVENUE. "The heavy falling off in totalizator rcvenuo and amusement tax during the last few months has rendered necessary a revision of the estimato of the stamp revenue, whilo reductions havo also had to be made in various other items of revenue. "On tho expenditure side, tho economic position is reflected in increased applications for old age pensions and family allowances, which havo necessitated increasing tho estimates of expenditure by about £IOO,OOO.

“To sum up the position, the shortage to be met is now £5,500,000, and the salary reductions and other proposals to which I havo referred will provide about £3,320,000 towards meeting tho position. A very large amount has yet to be found before the Budget can bo balanced. “There are two contingencies for which provision has not yet been made, viz., additional funds for tho Unemployment Board’s operations, and loss of revenue which will accrue as the result of tbe Hawke’s Bay earthquake, neither of which can at present be accurately estimated, but may be more clearly defined when the ordinary session of Parliament is held.”

QUESTIONS BY MEMBERS. Mr P. Fraser asked whether the Bill made provision for increased grants to hospital boards to enable them to deal with the constantly growing number of eases of destitution created by unemployment.

Mr Forbes said that the Bill did not deal with hospital finance. Mr \V. D. Stewart said ho understood that notwithstanding the economy proposals there would still bo a gap between tho revenue and expenditure and he asked did tho Primo Minister propose to bridgo tho gap by taxation direct or indirect or both, and if so would a Bill involving such proposals bo brought down this session? Mr Forbes, said that in his previous public statement he indicated that tho gap would bo bridged by means of direct and indirect taxation. Tho question of when tho proposals would bo brought down was at present receiving the attention of tho Government. They would be presented to tho House during tho ordinary session if it -were not necessary for them to appear during tho present emergency session. Mr Fletcher asked whether tho deficit announced was merely an •instalment or the final figure. A previous announcement had been made and two weeks later the figure had mounted, but now it was up by another million. Was that the end 1 It was high time tho country knew where it stood uccauso tho effect was .highly damaging on the business of tho country. Replying to questions as to when tho Bill would 'be considered. Mr Forbes said he hoped to deal with tho measure somo timo early next week. Mr Fraser: Is there to bo a third Finance. Bill? ■ Mr Forbes said he had not anticipated a third Bill would be necessary, although probably some amendments to tho present measure would bo introduced. Tho Finance Bill No. 2 was read a first time. OTHER BUSINESS.

THE RAILWAYS BILL.

Per Press Association. WELLINGTON. April 16. Tho debate on the Railway Amendment Bill was resumed. . Mr W. Nash raised an obicction to tho increases which had been made in workers’ tickets and criticised tho workshops policy. Mr Harris said that it was didicult to understand what had prompted tho Government to bring down’ a Bill which did not seem to have any friends in the House. Even tho Ministers wero lukewarm. The Bill should bo held over until next session. Tho debate was interrupted in order to enable tho House to consider tho amendments which had been mado to tho Mortgagors’ Relief Bill by the Legislative Council, lhe Speaker said one of the Amendments affected Crown property and as tho House had sole control of tho public purso tho alteration made by tho Council was a breach of privilege, lie understood, howcv ci, that as the Bill was an urgent one, tho Prime Minister intended to consent to the amendment on condition that a precedent was not established. ~ ~ , xl Tho Primo Minister said that thcro wero no objections to tho amendments and he moved to waive the privileges of tho House on tho understanding that this should not be taken as a precedent. , Mr Forbes explained that tho first amendmoot limited tho application of tho Act and if it was subsequently necessary to extend it there was nothing to prevent such action being taken. Tho other amendment provided that whero the whole proceedings in connction with a sale under a mortgage had been concluded and a property changed hands and was in tho possession of a third party such arrangements should not bo disturbed. As it provided clearly that all titles etc should already have changed hands, there could be very few, if any, cases affected where proceedings had commenced after the date on which the Bill was deemed to have come into operation. Tho debato on tho Railways Amendment Bill was continued till tho House rose at midnight till 2.50 to-morrow.