WAR FINANCE

Manawatu Standard, Volume LX, Issue 263, 4 October 1940, Page 8

WAR FINANCE

DEBATE IN HOUSE. POLICY UNDER FIRE. Per Press Association., WELLINGTON, Oct. 3. In the House of Representatives today the discussion was continued in the debate adjourned from last night on the country’s war expenditure. Mr W. A. Bodkin said that under no circumstances should working capital be called upon to make any contribution to the war loan, but thousands of companies were being called on to exchange working capital for a frozen asset that could only be disposed of at a substantial discount. In this way, he contended, the Government was playing into the hands of the speculator and would penalise those who had money tied up in industry.

Mr C. W. Boswell expressed the belief that the New Zealand people would welcome the opportunity the loan presented of making their contribution to winning tho war. He was not afraid of the loan being unpopular and the people now, he declared, were in a better position to pay a compulsory loan than they would have been at any other, time in the country’s history. The suggestion by Mr Coates that a compulsory loan should be made on a voluntary basis was surely paradoxical, and Mr Boswell said he was glad Mr Nash had not been carried away by any ideas of that kind. Mr W. P. Endean referred to the provision in the regulations for an appeal to the Minister, and said the Minister was not bound to send the appeal on to the tribunal. Ho was the supreme dictator where subscriptions to tho loan were concerned and it was wrong that he should have such power. In Britain Parliament had set up tribunals independent of t’he Treasury. Mr Endean urged the Government' to pay interest over the whole period I and stated that the costs would be small compared with the huge civil expenditure the Government was maintaining. Mr W. M. C. Denham said quite a few people made fortunes out of the last war, and were still living. No one should make a profit out of war. There should be no need' for compulsion, but the position was that patriotic feeling and a sense of principle was not so deeply implanted in the hearts of some people as it should be, and t'he loan proposal had been introduced to compel people to provide the money. MR LEE’S VIEWS. Mr J. A. Lee referred to the amendr ment made this week to the Public Safety Emergency Regulations empowering the Attorney-General to order the dismissal of workers in the interests of public safety. The Prime Minister (Rt. Hon. P. Fraser) rose to a point of order and contended that the subject was outside the scope of the debate. The Speaker said he had understood that all the war regulations were to be open for discussio... Mr Fraser : Only those dealing with finance. The Speaker said apparently a misunderstanding had arisen and he agreed that it would perhaps be better if the regulations outside those dealing with war finance were discussed separately. • , „ Mr Lee contended that the Government’s compulsory loan would drive the country still further into the chains of the debt finance system and that it did not constitute any new departure in financial policy. The burden* after this war were going to be much 'heavier than after the last war, tie said, unless some means were found of avoiding an increase, and he added that to the extent that industry was compelled to loan on the banks to get monev to invest in this loan every advance by the banks was creating fresh deposits. The debt was going to be shackled upon industry. Rev. A. H. Nordmeyer referred to the use of the Reserve Bank by the State and said the bank had already been called upon to find a sum of over £2 Su X A’ID«i Ransom: Will you pay it Nordmeyer: I am not concerned about that aspect. (loughtci.) Continuing, he said the Government could extend even further use of the Reserve Bank and would do so for housing and other purposes However, the most ardent money reformer in New Zealand would concede that, no matter how anxious we were to use the Reserve Bank and its credit facilities, they could not without disaster extend them beyond the point where g<mds and services were available. This point had not yet been reached, but after the war in order to maintain the seernity and stability of the Dominion it might be necessary to call on the Reserve Bank to an extent not hitherto aV j{ r W. S. Goosman said it had taken the Government 12 months of war to make up its mind what it wasigoing to do, and during that period people had been kept in a state of anxiety. He contended that the Government had taken £27,000,000 from the Reserve Bank and Mr Nordmeyer had informed the country that there was no intention of paying it tack. Mr Goosman suggested that the Government instead of calling upon persons and firms to advance money to it free of interest for three years, should provide, an alternative by borrowing idle capital itself and allowing persons or firms to pay interest. Under the present proposals, he said, the working capital that was required to increase production was going to be taken. “NO INFLATION.”

The Minister of Native Affairs (Hon. F. Langstone) said it had been contended that there had been inflation in New Zealand during the present Government’s term in office. In his opinion there had been no inflation, and the price levels in the Dominion had remained more level over the last few years than in any other country in tne world. Speaking of the standard ot living of the people as the war progressed he said it was evident that it a large number of men left the country and those remaining behind did not fill the breach so far as production was concerned, then we could not retain tho standard of living to which we had been accustomed. . lit. Hon. G. AV. I’orbes said that costs had gone up in New Zealand and there had been inflation. There was no reason why the War Cabinet should not consider methods of raising war finance, and the opinions of the Opposition members of that Cabinet might be valuable. He criticised the method of raising the war loan and suggested that the Minister of Finance would receive a better response to his appeal if lie had adopted methods to which people were more accustomed. The Minister of Defence (Hon. F. | Jones) gave some interesting details of New Zealand’s war preparations. At the outbreak of hostilities, he said, there were 16,000 Territorials in the Dominion and a large number of these? had joined the Expeditionary Force. It was decided to bring them to a war establishment of 25,985. There were 9572 men in additional units and 8491 in the National Military Reserve, making a total of 44,048. The finding of accommodation, training and equipping the men in camp had been a big expense, said the Minister, who added 1 that it cost just oyer £3O to equip a

soldier. Clothing cost £l7 5s and equipment £l2 17s. Food was also a big item and the cost ivas between Is 6d and Is 9d per day for three meals. In reply to a question by Mr S. G. Holland, Mr Jones said he thought the men were fitter ill this war than the last and the care of their health and diet was receiving more attention. Mr W. J. Poison: Couldn’t a more satisfactory' place than Waiouru have been selected for a camp ? Mr Jones: It is certainly very cold in the winter, but it is a very healthy place and most of the training there will take place in the spring, summer and autumn. ' ■ Mr Jone 6 also announced, that the Government intended to embark on a further expansion programme for the Air Force in New Zealand. Additional squadrons were ,to be provided, and also new Air Force stations, hangars, etc., and all that meant additional cost. It was desired to provide a better protective force in New Zealand, and the Air Force would co-operate to that end. It was not intended that there should be any interference in the number of men sent to the United Kingdom under the Empire scheme. Mr Jones paid tribute to the manner in which Great Britain had supplied New Zealand with planes and said the Dominion had been very well treated in that respect. He also expressed pride at the record of New Zealanders who were serving in Britain. From the casualty list which he had compiled of New Zealanders^ serving with, the Royal Air Force 17 had been killed, 23 were missing and it was believed 49 were missing, ■ls were prisoners and 21 wounded, a total of 187. . , We in New Zealand, said the Minister, Were proud of our gallant sons, and he was sure everyone in the House would extend ready sympathy to the relatives of those who had been killed. Mr Jones outlined New Zealand’s programme under the Empire air training scheme and stated that on September 13 the personnel of tho Royal New Zealand Air Force was 383 officers and 5331 airmen, a total of 5714, while the number who would have left New Zealand by December 31, 1940, would he 574 pilots, 322 observers and 469 airgunners. In answer to a question by Mr Poison, he said that there were approximately 1000 New Zealanders serving with the Air Force in Britain at the present time. As far as the Royal New Zealand Navy was concerned, said Mr Jones, its strength had increased by over 100 per cent, and over 80 per cent, were New Zealanders. He mentioned many fields of operations in which New Zealanders were taking part and concluded by saying “Our boys in Egypt and Great Britain are in great heart and well trained. They will give a good account of themselves against Britain’s enemies. The Air Force and the Navy have already proved themselves.” The debate was adjourned at 10.30 p.m. until 10.30 am. to-day. The Legislative Council met at 2.30 and received the Orchard and Garden Diseases Amendment Bill from the House and read it a first time.

After carrying a motion of appreciation of the services of a former member, the late Mr John Anstev, the Council adjourned at 3.50 until to-morrow as a mark of respect.

LABOUR FOR FARMS

POSITION OF SCHEME 48,

Per Association

WELLINGTON, Oct. 4. The House of Representatives resumed at 10.30 a.m when Mr C. W. Boswell (Lab., Bay of Islands), in*, an urgent question to the Minister of Labour, asked the reason for the suspension of scheme 4B and also whether the resumption of the scheme was intended and the approximate date thereof.

Hon. P. C. Webb, in reply, said the scheme was suspended only because all efforts to fill farm operational vacancies had proved insufficient and it was necessary to call on those engaged under scheme 48. As, however, farmers felt unable to accept the services of other than a small proportion of the married men thus made available, partial resumption of scheme 4B was authorised on September 13 a.nd 2885 men were now employed. The hon. member would be pleased to learn that already instructions had been issued for the full resumption of the scheme with the exception of the allocation of men likely to be placed on farm operational work in the near future. TERRITORIALS IN BALLOT. .

The inclusion of the names of men already serving in the Territorial Forces in the recent Territorial ballot was mentioned in an urgent question by Mr E. B. Gordon (Nat., Rangitikei) to the Minister of National Service. Mr Gordon asked the Minister to ensure that a similar oversight did not occur in the future.

Hon. R. Semple, in reply, explained that in the task of such a magnitude as the preparation of the register it was almost unavoidable that mistakes should occur occasionally, but every endeavour was being made to ensure that in future the names of those already serving would, not be included in future Territorial ballots.

butter to cheese factories. The question of financial assistance to farmers changing over from a creamery to cheese factory supply was raised in an urgent question by Mr J. A. Lee (Dem. Lab., Grey Lynn) on behalf of the Speaker (Hon. AV. E. Barnard) to the Minister in Charge of State Advances. He asked if any assistance would be given by way of a free grant, and if aid were afforded by loans upon what terms would these be made. Hon. H. T. Armstrong, in reply, said that applications for assistance would be dealt with under the farmers’ loan emergency regulations. Both the amount of the loan and the terms would be determined by the circumstances of chch individual, his case depending on the nature of the improvements to be effected, the life of the assets and the resources of the applicants. No free grants would be made in these cases. Mr W. J. Poison (Nat.. Stratford): The loans will be limited to £2OO, of course.

The Minister made no comment. HARSH AVAR LOAN TERMS.

The interrupted debate on war finance was resumed by Mr F. W. Doidge (Nat., Tauranga), who said the Government was issuing the loan in a form to appease the militants of its own party. It talked of the “all in” policy, but the compulsory loan applied only to a few prosperous taxpayers and companies. Nowhere in tho British Empire had there been found the necessity for a compulsory loan of the type announced in New Zealand, continued Mr Doidge, and ’he claimed that not even Germany and Italy had had recourse to a loan so harsh. He; contended that Mr Nash was out of touch with the sentiment of the people,! and their willingness to give freely was! to be found in the magnificent re-j spouse to the'fighter. aeroplane funds. | The terms of the loan were shattering! to t'he prestige of New Zealand, hej said. Mr Doidge also urged that New| Zealand should continue to import as' much as possible from Britain. Mr E- P. Meachen said he could not understand the mentality of those. who criticised the Government for re-i striding petrol. People with private! cars could think themselves very lucky

to get any measure of petrol at all He drew attention to the staggering amount of petrol required for war purposes, particularly in training airmen, and said he thought it was time tlio Government took action against some of the statements made. Mr Meachen said he understopd tbfti the newspapers had had the right !tu peruse some of the that had been passed between the Brit ish and New Zealand Governments, and he could hot understand why the newspapers, instead of criticising, were not helping in their leading articles and news columns in keeping the goodwill of the people in the methods that had been adopted? Mr H. G- Dickie, discussing the war loan, said h© had no objection to compulsion so long as it was fair. The present proposal was not conscripting wealth in the full meaning of the term. It was taking money from a certain number of people, chiefly companies which worked their money to the full i and had to lean on the hanks as. well. Mr J. ''Robertson, referring to war finance, said it was generally conceded 1 that every section of the community | was called" upon to undergo a sacrifice. It was only some months ago that ! events caused some panic. There had ‘ been a cry for the" conscription of men ! and the Labour Party had replied 1 that there would not be conscription of men without conscription of wealth, and that the conscription of wealth had to be applied. There was. a sound moral and economic justification for j it. . I Mr S. G. Holland said no one had any quarrel with the amount of money to be raised in the war loan, but they did think that the voluntary system ( should first have been applied before 1 attempting to use the big stick of conscription. He urged the Minister, to make a clear statement that this loan was not the thin end of the wedge for a general introduction of interestfree loans. The Government had put itself offside with the people for taking their money and not, giving them | any interest for it. ' The debate was interrupted by .the! adjournment at 1 p.m. J