POLICY REVIEWED

Manawatu Standard, Volume LX, Issue 262, 3 October 1940, Page 9

POLICY REVIEWED

TAXATION AND LOANS. EXTENT OF EXPENDITURE. Per Press Association. WELLINGTON, Oct. 2. A debate on the war expenditure of the Dominion and the means oi raising funds for that expenditure occupied the attention of tne House of Representatives to-night. The opportunity to discuss the subject was given by the Prime Minister (Rt. Hon. P. JL< raser), who stated during the afternoon, in reply to Opposition questions, that members would be able to debate the matter during the evening when the Minister of Finance, on the motion for t'he adjournment, would make a statement on the war expenditure. When the House met at 7.30 Hon. W. Nash immediately, moved the adjournment, and it was on that motion that the debate took place. Mr Nash reminded members of the provisions made in September of last year for the War Expenses Account and referred to the increased postage, Customs taxation, and excise duties that had to be imposed. He said that up to March 31 this year this had amounted to a fraction over £/,000.000. After that the Budget had provided for an expenditure of £37,500,000, of which £19,000,000 would be expended in the United Kingdom and was to be raised there by loan. Consequently £17,000,000 was to be raised in New Zealand. The money raised in Britain would be charged to New Zealand plus interest. , r The. real cost of the war, as Mr Nash said, he had pointed out in presenting the last Budget, must come from a current production and consequently the more that could be raised by taxation the less debt would be created.

COST OVER £l2 000,000

Up to August 31, said Mr Nash, the cost of the war had been £12,241,000, but in addition there were imprests outstanding ot £2,093,550.

Mr Nash gave an itemised account of liow the total expenditure was made up and said that of the money provided for war purposes £4,400,000 had been found by taxation and £2,2oOjIRAJ had been transferred from the previous year’s vote, making a total or £6,738,000 irom taxation. Miscellaneous items, mostly recoverable, totalled £357,000, donations £58,000, interestfree loans £2,428,000, and other borrowings £3,754,000. . So far the only account they hau | received from the United Kingdom was £1,000,000, but the sum New Zealand would 'have to pay Britain would advance bv leaps and bounds during the near future; and the Government might get an account for £^ 000 or £10,000,000 for equipment tor arming our men while overseas. Mr Nash referred to the charges for. goods required by the forces and, speaking of food, said the expe on that item amounted to £512,000 up to August 31- Such items had to be taken out of the normal quantity of goods available for the civilian population and consequently there must be less available for civilians. We had not realised that quite cnou o un to the present, said Mr Nash. V r C A. Wilkinson : Aou mean thc Government has not realised that Mr Nash. The Government realised I “j!r 1 |" g G ti HoSd, Why ~»t .ttrt OF INFLATION . Mr Nash replied that that was hcino done and factories m New Aealand Inn increased production by durin" the past 12 months. Mr JNash addetf in response to a further mteifaction that lie could see no signs ot Inflation in any of the fiKures Jiefore him, and every , penny expended for war purposes this year won d be ram ed bv taxation or loan. U members were interested in what the war noing to cost ,he said, they could find fhe cos? overseas. If they muthpled the number of men overseas by os a week, however, that only provided the necessary material to pay for the men and in addition there might be £7OO or £IOOO per man for capital '’JSI/S S' Share in the Canadian Empire air training scheme Mr Nash said this "°£ ld met by loan from Britain, but tne ooods required lor home defence m New Zealand would all be charged against the Dominion, It was probable, he said, that the total expenditure for this year ivou d be near £40,000,000. WAR LOAN PROCEDURE. The Minister then referred to the recent war loan and explained the prospectus. Facilities, he said were bein" provided to assist those who had some difficulty in meeting their obligations. No single person getting less than £575 a year or a married man without children getting £6oo a year would be obliged to subscribe. Ihe Minister continued that the loan pro-

nosals imposed no hardship on lower incomes at all. The national savings scheme already outlined would be issued within a week probably ami would apply to that section of the community that normally did not subscribe to any loans. _ In a further explanation of the procedure of the war loan, Mr Nash said ho would get from the Reserve Hank a return showing those persons who were in a position to subscribe but who did not. No names would be mentioned, but it would be published in the Gazette that certain people had not subscribed in the proportion expected of them and if they still felt they could not subscribe a procedure was being worked out enabling them to appeal. There was not going o be any conpulsion anywhere it they paid, said Mr Nash. It was only if people did not p&y* . Speaking on the difficulties experienced by some, Mr Nash said the Government would see what could be done to help them, but to the maximum that was possible loans should be subscribed out of the current income. “We are trying to take ;) an honest and fair way as a nation, Mr Nash concluded, “and wo are asking taxpayers to make their maximum contribution.” . WAR CABINET’S PART.

Rt. Hon. J. G, Coates said there seemed to be some misconception as to the part the War Cabinet played as far as the war effort and war expenses were concerned. “Wo have-nothing to do with the financial policy, lie said referring to his own position and that of the Leader of the Opposition. “It is the financial policy of the Government. We are concerned with the war expenditure, but have not been asked to discuss the question ol how the finances are to be raised, whether by taxation, saving, or loan Alanv people were ot the opinion that the War Cabinet was directly concerned with the raising of money for war purposes and with all questions in relation to expenditure for war PU Mr Eraser: What the right lion, gentleman says is correct. The Opposition

representatives are not responsible for the methods of raising war money. . Mr Coates continued that the War Cabinet had confined itself exclusively to the war and the war effort. While it might be interesting to discuss theories, it might be .better to ascertain how each citizen could contribute to the war effort. That meant sacrifice on the part of everybody. We were all fighting on a common cause and there must be a common effort. The Government possessed theories of finance and economy, but all those theories might be landed in the scrapheap in the twinkling of an eye owing to the ruthless power that sought to subjugate us. He believed that by healthy co-operation on the part of all concerned with production, both einplovers a.nd employees, much could bo achieved and he warned the people to live within their incomes.

Referring to tlie war loan, Mr Coates contended that if Mr Nash had asked the people to make a voluntary contribution of £8,000,000 the money -would have been found readily and thousands of people of small means would have assisted by raising the sum proposed. Taxable income must be affected and the methods being adopted meant eating into capital. The loan should be on a voluntary basis. Companies as well as individuals would be affected and banks would have to be approached for accommodation. He was of opinion that interest of 2 or 2J per cent, should be paid from the beginning. CALL FOlt GENEROSITY.

The Minister of Supply (Hon. D. G. Sullivan) said that a few months ago the feeling of the House and people found expression in the phrase: “the Dominion's war contribution must be an all-in effort.” That being so, he thought it unwise for any group of members to adopt the attitude that> there was not now wholehearted willingness on everybody’s part to make financial sacrifices. He felt that all wno had anything to give in the way ot financial resources should display the same generous patriotic spirit as was ! called for from those who were requirled to go overseas. New Zealand’s war 'effort had won the respect of other 'parts of the Empire and he was sure the financial sacrifices would be faced up to in the same way as the other sacrifices required from the country. “EXTRAORDINARY SITUATION.” Mr AY. J. Poison said the Government’s responsibility in raising money for war was a tremendous one. He drew attention to the fact of rising costs and said it was an extraordinary, situation that, after setting up a War Cabinet, they should have no say in 'the raising of the war funds It the War Cabinet were not consulted, it was obvious Parliament would not be cou- ' suited. Surely it would have been wise : to take the views of Parliament before ' raising the loan. He agreed that they’ f should conscript wealth if necessary, ' but the money that was of least use to tho State should be taken first and the easiest way of getting it would be by offering a low interest rate. 1 Mr Eraser said that the Opposition 1 objected to anything in the way of con- ' scription of wealth. The Governmen

hud not hesitated to. bring in the con- ; scription of men when necessary and | I it had made perfectly clear that its policy included the conscription ot | wealth. The work of the War Cabinet, , ho said, was going on well and in a. good, spirit. 1 . •• \H , , With regard to ra.isi.ng money, however, the position was somewhat diiter- . cut and it was obvious that the party II with a majority in the House must not have the decision regarding the raising of money taken out of its hands. 1 : was not fair to the Opposition mem--1 hers of the War Cabinet that they > should have the responsibility regurd--1 ing the raising of money, the Upposi- : tion, he declared, seemed to be pan- - dering to those who wanted to dodge ! their fair share. : Opposition cries of JNoJ Mr Fraser continued that lie believ--5 ed the great bulk of the people would ? idve. As far as the Goverhment was } concerned there could be no retreat 1 from the principle regarding human | beings, and, after all human hie more sacred than wealth. 2 Mr W A. Bodkin suggested to tne ; Minister'of Finance that it was just as 1 important to discriminate in the con- , scription of capital as in the conscription of men because, after all eve j 5 business was a tax-gatherer of the 2 State wWch was the largest partner m ' every business. , ,i > The debate was interrupted by the adjournment at 12.30, and will be con- . tinned at 2.30 p.m. to-morrow.