BUDGET DEBATE.

Manawatu Times, Volume XLVI, Issue 1977, 19 November 1921, Page 5

BUDGET DEBATE.

REPLY OF THE PREMIER. THE COUNTRY’S FINANCE. REDUCTIONS IN SALARIES FORECASTED. (Per Press Association.) WELLINGTON, Last Night. In the House of Representatives this Afternoon the Prime Minister replied to the debate on the Budget. He said he could not reply to every speech delivered in the debate, but he would at least refer to the speeches delivered by the leaders of the three Oppositions. It had been said that tho Government was not ready with the business of the House. But he claimed, notwithstanding the waste of time caused by the want of confidence motions, that fifteen Bills had already been passed, and altogether 69 Bills had been advanced a considerable stage towards completion. It had also been said that the Budget contained no policy. Those who said so did not know what they were talking about. If for nothing else than the tariff, it would be a memorable Budget. Then there was the reduction as well as the revision of taxation. He defended tho rebate on the land tax as a reduction in taxation, and the same principle would, he said, be applied to the income tax before long. There was also in the Budget a proposal which, he thought, had passed unnoticed, namely, that every department of State must in future supply a balance-sheet. This, he claimed, was a most valuable reform. He enumerated the various suggestions contained in the Budget as proof that it contained a vigorous policy, and then ■passed on to claim that there would again be a surplus next year, This statement he made- with good reason and confidence. He admitted that our railways were not doing as well as he would like. But what had happened here was nothing to what was happening in other countries. He anticipated that matters would soon mend, because he could observe signs of improvement coming along. Mr Wilford had suggested the appointment of Commissioners to control the Customs. To that principle he would always object, for the history of any race showed that they had always struggled that the representatives in Parliament should control taxation. By that principle he always stood, and he would always stand. DOMINION PRODUCE.

Passing on to the position of our produce, he replied t> the accusation made by Mr Forbes that he had done nothing for the producers, by detailing his efforts in London to secure a reduction in freights. He predicted that before long there would be an appreciable rise in the price of wool, and he defended the condition In which our meat was marketed, explaining that the meat spoken of as being placed before the public in a bad condition was old meat, and not this season's supply. He referred to the proposal to send an expert to London to watch the marketing of our produce, but expressed the opinion that it was no use a man going to London expecting to pick up the tricks of the trade in a few weeks. He must spend months there, because the men engaged in the meat trade were amon/r°t some of the smartest men in the Empire.

A CHALLENGE. The Premier gave an emphatic denial to the statements by the member for Christchurch East that members of the Government had been guilty of using their positions to benefit their friends. There was such a thing as Parliamentary privilege. But there was also such a thing as a breach of Parliamentary privilege. He challenged Dr Thacker to specify cases, and he (Mr Massey) would be ready to meet them. It was time that these unfair tactics ceased. THE SLUMP. Referring to the slump, Mr Massey said he had warned the people during the short session earlier in the S’bar that they must prepare for a fall in prices, and take such measures as would avert a serious setback to the country. Replying to Mr Statham’s criticism of the Bank of New Zeala'nd dealing with its profits, Mr Massey said it only followed the usual practice in carrying forward a certain sum to meet contingencies. The Government had received in taxation 14/8 in the £ on the profits made in New Zealand last year. THE COUNTRY’S FINANCE, Mr Massey said much had been said about the state of the country’s financial position, but little about the causes. The Avar had cost eighty millions, and there was a large sum payable for interest, sinking fund, and pensions. The latter were likely to continue for some time. Then the cost of living and of materials had largely increased. He instanced a number of items of materials required for public works and other purposes, running from 150 per cent upward. At the same time, the prices for produce had fallen, so that we were faced with the position that our income was not enough to meet our expenditure. We must reduce expenditure, and a start had already been made with this. He had set up an economy committee, and the savings already effected in the departmental expenditure totalled £907,041. Then, there was a saving of £640,000 in subsidies, while the savings on other items concerning which he and the Treasury had not yet agreed would bring the total up to two millions. Cabinet had agreed to further economies amounting to £1,295,361, making, with the amount previously mentioned, an aggregate saving of £8,250,000. Wherever possible, departmental economies were being made. They could not have been put in hand earlier, and their effect would not be apparent in the public accounts for some time. In addition to all the savings mentioned, the Economies Committee said it was possible to reduce expenditure by another three millions. He was not so sure of this, but he believed that two millions, at any rate, could be saved. INCREASED TAXATION. But more than this was needed. He was going to ask Parliament to agree to an lncrel.se in the tax on the totalisator, and on amusements. The new tariff should also produce an extra million. The country’s finances were being closely scrutinised—more closely than ever before for forty years past. It was necessary to face the position. REDUCED SALARIES. He proposed to ask Parliament to agree to a general reduction of salaries in the public service, from the highest downward, by JO. per, cent,

down to say £2OO a year. Ministers and members of Parliament must be included. He mentioned that the Governor-General had said to him, in reference to this subject, “You must not leave me out of this, Mr Massey; take five hundred off my salary,” A voice; “He’s a sport!” Mr Massey: “Yes. he is a sport, and I believe the people of this country are all sports, and will face the position like sports.’’ By doing this, the country would come through the troublous time all right. Mr Massey said the recent alterations in the country’s book-keeping methods meant a saving of £200,000 yearly. DEBT EXTINCTION. He suggested that instead of investing the sinking funds, as at present, with the Public Trust Office, the Government should utilise them to purchase New Zealand stocks, which were quoted in the London market at £6O, and which, in a few years’ time, we would have to pay £IOO to redeem. The country could not afford to go on paying high rates of interest for loans. It was necessary to do ali that was possible to keep the country’s credit good. In a few years’ time a sum of £50,000,000 must be met, and this could not be done Ir they allowed the country’s credit to be destroyed. He believed that it would be possible, after the end of the financial year, to obtain a loan In London on very reasonable terras If it was required. The Prime Minister said that two companies trading in New Zealand had just paid a matter of £IOO,OOO on account of Income tax, which was not really due till February. The Government would pay a small interest on this money, which he had utilised to help local bodies’ finance. TAXATION. The taxation per head in New Zealand was 8/9, while in Australia the Federal tax was 8/6, and to this had to be added the State taxes, varying from 7d in Victoria to 3/6 in Queensland. The company tax was under consideration. So far as he could see, if they reduced the company tax, they must increase the income tux, and vice versa. Referring to the tariff, he believed It would be found to be generally satisfactory. He had never known a tariff that had elicited so little criticism. He quoted a letter from a boot manufacturer, who declared that It afforded ample protection to the industry. The Government, was going to ask Parliament to give an opportunity to negotiate with Australia regarding duties. He agreed with much that had been said about the Australian tariff wall. IMPORTS AND EXPORTS. The Premier quoted figures that had just been prepared of . the nine months’ imports and exports. The figures for this year showed that the imports amounted to £85,403,000 and the exports to £36,466,000, This was an improvement of an encouraging nature, and the producing season was just beginning. Freights had been xeduced by about 20 per cent, while the prices of produce were going up. He said the Government had done all that was possible-with the funds at its disposal to meet the housing difficulty. Mr Massey finished his speech at 9 6’clock, and the motion to go Into Committee on the Estimates was carried. , On the first item, £58,602 (Legislature Department), Mr Massey moved to report progress. He then intimated to the House that it was his intention to refer the Estlrfiates to the Public Accounts Committee fbr revision and report, and that he would go on with the tariff In the meantime. This course was agreed to, and the House rose till 2.30 on Tuesday.