Budget Attack and Defence

Manawatu Times, Volume 61, Issue 189, 12 August 1936, Page 5

Budget Attack and Defence

Hon. A. Hamilton's Trenchant Criticism

Mr J. Thorn's Enthusiastic Support

Per Press Association.

WELLINGTON, Last Night. In the House to-night the Financial debato was continued by Hon. A. Hamilton, who doubted if the Prime Minister, judging by his speech earlier in the debate, was the master mind in the Cabinet. Ho said Labour’s philosophy seemed to be to judge a man’s salary by his needs rather than by his ability to givo service. He said if the farmer produced more and received more for his produce, that did not mean he was taking it from anyone else, and the more he received the better. He said the Government was giving the people more money, but was he giving them more purchasing power? He agreed that it was wise to give the people moro spending power, but they should be careful that their actions lifted in with their remarks. He claimed that Labour appeared to believe that idleness was preferable to work and he (Mr Hamilton) thought the idle man was a miserable man. Hon. E. Semple: That is deliberate misrepresentation. Mr Hamilton went on to say that the Prime Minister was delightfully vague in his references to social credit. The Prime Minister had said he was going to build homes by social credit, but ho also said he was going to borrow money and pay interest. Why not be frank about it? asked Mr Hamilton The Budget, he said, overtaxed industries to keep the thriftless in idleness. Mr Hamilton said there was no mention of agriculture in the Budget and the Minister of Lands was barely mentioned. Was not that significant? He thought it would be wise for the Ministers concerned to explain that. Spending, according to the Budget, seemed to be moro important than producing, The Labour Party had the good fortune to be in power when the finances of the country were in a healthy and buoyant condition and the last Government was to be congratulated ou the healthy position in which it left the country’s finances. The Government had fallen heir to an increased spending power of more than £3,000,000. The Government had £5,317,000 more to spend than the last Government had last year, and if the Government could spend its way back to prosperity it should be getting on pretty well. Ho claimed that the Minister of Finance, when he had money to spare, should think first of relieving the taxpayer and that was what the last Government intended to do, but it “got the boot.” The Government’s first duty should be to consider the taxpayer. He said the Government had promised to abolish the sales tax, but it was not doing so. Ho thought it had a surplus large enough to do it. The Government also promised to reduce taxation, but was increasing it. Mr Hamilton said he would not be surprised if, during the Labour Government’s first term of office, the National Debt would not be increased by £20,000,000. The effect of the Government’s taxation was very farreaching. The Government had its eye on the- big man and big organisations. It looked as if it was a tax moro of a political nature than of justification. Labour, he said, had ahvays advocated that taxation should bo done scientifically, but was it doing so'? Beferring to tho land tax, Mr Hamilton said tlie farmers had been asking for years for tho abolition of the land tax. The land tax was a class tax and the fact that it was being levied again showed the difficulty of getting rid of a tax once it was levied. He claimed that there was no great virtue in owning laud to-day. The largo farmers were entitled to justice just as much as Ihe little man. The Government said tho tax would prevent land speculation, but Mr Hamilton claimed there was more speculation in small farms than in large farms. >'‘hy should a man who was running his farm to full capacity bo taxed? Laud, he said, must be classified before it was taxed and then not so much objectiou could be taken to it. The large land-owner was usually in the back country and often sub-division was impracticable. He suggested that if the Government would not classify the land, then the farmer should have tho right, of appeal to a tribunal and the appeal would be sustained if lie was working his farm to full capacity or if if was unsuitable for closer settlement. Mr Hamilton 'said that in the cities it would be the largo organisations that would be caught and he thought the wisdom of the Government in imposing its taxation was open to question. He said the Company Tax was really a tax on the small man because it could be passed on. Mr Hamilton said they ha.d election hoaxes put over in the past, but the Government’s guaranteed price scheme was well up to the top of them. He thought the guarantee had been turned into a commandeer, and he said the Minister might know the psychology of the mob, but he did not know the psychology of the farmer. The Government said it was taking the chains off the farmer, but it was putting the leg rope on. But the farmer could still kick and if he (Mr Hamilton) knew anything of the farmer he would kick. He said the farmer should be told plainly if he was going to receive a bonus if there was a surplus in the dairy account at the end of the year. Mr Hamilton said the development of industry was a very desirable work, but the actions of the Government betrayed its expressions of opinion. He took exception to the pension for deserted wives. He thought these ■ people should be a charge on hospital - boards as was the practice at present. ; The need and the demand might be • there, but there was the consequence j which the Minister should take into i recount. <

A Humanitarian Document Mr. J. Thorn congratulated the Government, particularly the Minister of Finance, on the Budget -which was historic because it was the first Budget introduced by t.be Labour Government. It was a humanitarian Budget because it taxed the rich and well-to-do to assist the poor of the community. Members of the Labour party admitted that the Budget had shortcomings because it fell short of what they had hoped immediately to obtain, but it still remained a humanitarian document. He wished to refer to the benefits which the Budget conferred but which were apt to be forgotten or overlooked under newspaper and other influences. He read the pension provisions. In his opinion those reforms gave the Budget a noble human quality. Pensions for invalids would cost more than £1,000,000 per year and would save New Zealand from tho disgrace of leaving those'people to private charity or to the limited relief of hospital boards. He paid tribute to Mr. O’Brien who had for some years introduced an Invalid Pension Bill and said the present measure was due in a large measure to his persistency. The miners’ pension provision would relieve what was a deplorable position 3nd he referred to the ravages of miners’ pthisis and the difficulty of men securing pensions. The abolition of the miners’ widows’ pension was one of the atrocities committed during the depression and it was cruelly unjust. Now it was to be restored and the Labour Government had to be thanked for its restoration.

• Mr, Thorn claimed that added taxation to -ffect social reforms was morally just and said few would object (o the loss of a. few pounds per year when its benefits were fully realised. Beferring to the income tax, he said the thing to remember was not the amount of the tax but what remained after the tax was paid. He said the man with an income of £SOOO still had £3970 left after paying the tax. The same thing applied to the land fax, said Mr. Thorn. The abolition of the land tax in 1931 was definitely to give a benefit to the rich. It did not benefit the working farmer at all. He challenged any person to show that such an Act on the part of the last Government could be justified on the ground of equity and its reimpositiou would not put the small working farmer under an obligation to pay the tax. He claimed that the tax would injure very few persons. It had to bo remembered that men were their brothers’ helpers, and it was patriotism too, so that the proposals in tho Budget were amply justified. Coming to the guaranteed price Mr. Thorn said the farmers had been told exactly what the Government intended to do and tho pledge given had been kept to the very letter. Ho said as a result of what had been done the farmer was receiving a higher price today than the average over the past ten years. Mr. Coates: That is not correct.

Mr. Thorn said Mr. Coates had predicted that when the prices were known there would be a barrage, and he said when the effects were realised the barrage would be against the Opposition, not against the Government. He contended that if three months ago the farmers had been offered Is Id f.o.b. all through the season, plus the payment of a bonus of any balance in the dairy account, plus the readjustment of their mortgages down to the level of the guaranteed price, they would have regarded themselves as being knee-deep in clover and there would hardly have been a murmur of criticism. But something had happened in the meantime. Prices in London had risen surprisingly so that the critics of the Government were now able to argue with some little plausibility that the guarantee was little more than the average of the prices over tho past year. His reply was that the price level in London today was due to most extraordinary conditions. Australian and Russian supplies had fallen off and there had been a drought in America. Tho prices of New Zealand dairy produce usually fei3 in December, January and February, and if prices do fall what will be the position then? He predicted that nine out of ten farmers would be thankful for the security of incomo given them and would prefer it to the insecurity of a fluctuating market iu London over which they had no control whatever. He also drew attention to the fact that tho guaranteed price had actually led to a reduction in cost to the consumer. The policy of the Government gave security to tho dairy farmer and the lowered cost of living to the consumer. That was the Government 's case. The Budget was a. step in the direction of the realisation of a socialistic co-opera-tive society and he was satisfied chat before many months the people would rise up in thousands and call the Government that was responsible for it blessed. The debate was adjourned and the House rose at 9.30.