More Information Wanted On War Expenses

Manawatu Times, Volume 69, Issue 208, 2 September 1944, Page 4

More Information Wanted On War Expenses

(Per Press Association.) WELLINGTON, Sept. 1. Continuing the debate on the Land and Income Tax (Annual) Bill in the House of Representatives to-day, the Leader of the Opposition (Mr. Holland) said that getting information about the War Expenses Account from the Government was like getting blood from a stone. The only way they could get information on some aspects of war spending was to make an allegation, and they did not like having to do that; but they were not satisfied that ail the money from the War Expenses Account was being wisely spent. He said a tomato sauce factory which had recently “gone bungi’ in Christchurch-—a receiver was in—represented about £19,000 of State money. He did not know if there were any security. The Minister of Finance (Mr. Nash): This is not a proper charge: this is Just tomato sauce from the Leader of the Opposition.

The Minister of Supply (Mr. Sullivan) said Mr. Holland was not telling the story correctly. There were a number of firms which came under Lease-Lend in the ordinary way. To enable the business of the country to be carried on credits were granted in the ordinary way. Apparently the firm was in difficulties.

Mr. Holland said the money provided for the company was either a loan or a gift. Advocating taxation revision and a Royal Commission to investigate the incidence of taxation, Mr. Holland said the Opposition favoured removal of the sales tax on housing materials, removal of the wages tax on the earnings of domestic helpers, a sliding scale of taxation according to the size of the family, an overhaul of proprietary taxation and removal of the anomaly of taxation having to be paid on taxation. TAXATION ANOMALIES

Mr. Holland said that although 2s 6d was paid in national and social security tax the wage-earner still had to pay tax on the full £, while superannuitants had to pay for two benefits and were entitled to receive only one. The Opposition in the past had battled successfully to have the' land tax made a deductible item for income tax, and would battle for and achieve the removal of a similar anomaly in the case of wage-earners. There should also be a more generous allowance than 7s 6d weekly for country parents who were obliged to send their children away from home for education. He warned the Government that too heavy taxation on industry would hamper industry and, through industry, rehabilitation.

Hon. D. G. Sullivan said Mr. Holland’s remarks smacked of irresponsibility. He suggested a reduction in taxation while he talked of distributing largesse in all directions. Mr. Sullivan said that before any expenditure was approved by the War Cabinet it went through a sieve. A proposal was made by the department concerned and submitted to the Minister in charge. Then it went to the Treasury, where it was most carefully examined. Finally it went to the War Cabinet itself, where there was very often the most critical scrutiny of the proposed expenditure.

Mr. Sullivan said that in the acutest phase of the war, under the Japanese menace, there was probably a considerable amount of expenditure put in hand before it was formally approved by the War Cabinet, but that was remedied as soon as possible. Mr. Sullivan said there had been some instances, inevitably, of mistakes being made, but personally he knew of no reason why the accounts should not be brought out in the open before the House and the country, except possibly for some portions which might involve security. LOSS OF PICKLES * Mr. Sullivan, replying to Mr. Holland’s reference to the Christchurch sauce factory, said that . during the 1942-43 season contracts were let to the company <sn behalf of the British War Office for quantities of pickles after regular samples had been taken and satisfactory tests made by the Department of Scientific and Industrial Research. The pickles were under warranty to maintain their quality for 12 months. Unfortunately, owing to the inability of the War Shipping Administration to provide vessels to lift this cargo, the pickles were held in store for upwards of six months. When shipping instructions were finally received an examination showed extensive deterioration of the pickles and the total quantity in store was rejected, involving 15,499 cases. The property in the pickles had already passed the British War Office under the terms of warranty. The Government claimed against the company for a refund of the value of the pickles rejected, but the company had not yet met its obligations. The matter of recovery was now under discussion. The company would possibly go into voluntary liquidation in the near future, when the extent of the loss would be determined. The total amount in dispute was £19,476. Mr. Sullivan said this gave a very different picture from Mr. Holland’s suggestion that the Government had invested money in the company. Hon. D. G. Sullivan said the need for providing assistance to industry so that it could play its part in postwar development was fully recognised by the Government and as soon as it was possible he would ask his colleagues to grant what relief was possible to encourage development. Mr. Sullivan also mentioned the probability of supplying money for the establishment of industry, and said Mr. Nash had assured him that the money required for the sound development of industry would be provided. The question of the expansion of existing industries and the establishment of new ones was being investigated. Mr. W. J. Poison (Stratford) supported Mr. Holland’s suggestion that a postwar economic fund should be established from taxation. Such a fund, he said, could always be used if the claims of defence made that necessary, but there would be no need to pay it into the War Expienses Account until it was needed, and if it were not needed it would be available to play an important part in the postwar economy. Mr. Poison dealt at length with the incidence of taxation and pointed out that there were of anomalies, including tax exemption for children. He said it was ridiculous that the exemption should be the same as it was 20 years ago. The Prime Minister (Mr. Fraser) said there were anomalies In the taxation system and they should be dealt with as they appeared and were dealt with on their merits. The Leader of the Opposition claimed that part of the £8,000,000 surplus could have been returned to the taxpayers, but the point about the surplus was that it had been taken into account in the Budget for the present year and if it had not b«en paid into the War Expenses Account other means would have had to be taken to raise an equivalent amount. There was no criticism of the Government’s policy of paying for as much of the war as possible out of taxation. If the Minister of Finance could store the surplus for future use he would be happy to do so, but his policy was to use as much as possible for war expenses and so keep down borrowing. Mr. Fraser said to remove the sales tax on housing and to make other concessions as the

opposition suggested, while at the same time offering everybody everything in the way of relaxed taxation, was a gesture of prodigal politicians. Nevertheless it was not always possible to bait a steel trap for democracy and operate it successfully. All members must agree that the war was not won simply because it was going well. There could not be rehabilitation without expenditure and until the men serving overseas were rehabilitated we would not be out of the war. It would be the height of madness to reduce the taxation of the country as a whole until that part of the war effort which was rehabilitation was carried out.

Mr. Fraser criticised what he termed the chameieon-like changes on the part of the Opposition concerning portwar expansion and the relaxation of controls. The relaxation of import control, for instance, would be a disaster. The Prime Minister said the war effort still entailed heavy expenditure, and it was futile to fool the people as the Opposition sought to do with promises of relief which could not be given to them without piling up the nation’s load of debt. However, the Government had every intention of preparing the country for postwar expansion and conversion to civilian production. “This Government is far ahead of most Governments with its proposals for reconstruction, but my main contention is that it would be national madness to start dissipating our resources before we know our full liabilities,” stated Mr. Fraser.

Mr. G. H. Mackley (Wairarapa) said that the excess profits tax had served its purpose and should be abolished in the interests of the development of industry. The taxation on companies was too high for the good of the community because it was the companies that could expand the field of employment. The State could reach out for more money from taxpayers, but the only way in which private companies could expand was by the use of what money was left to them after the payment of taxation. Mr. H. E. Combs (Wgtn. Suburbs) said it was impossible to reduce taxation while the war was in progress, but relief should be given as soon as the war was over. He suggested that the first tax to be removed should be the national security tax because it touched the whole community and bore heavily upon those with lower incomes.

Mr. Clyde Carr (Timaru) said that recently Canadian members of Parliament were granted exemption from taxation on their Parliamentary salaries. Recently a newspaper in his own constituency had advocated the better remuneration of members of Parliament. He thought that if better salaries were not forthcoming then at least the Canadian example should be followed. No member of Parliament entered the House to make money but to serve the people. Nevertheless the labourer was worthy of his hire. Mr. Carr said that the newspaper quoted had a sting in the tail of its editorial, suggesting that if members of Parliament were paid more the country might get better members. Mr. W. S. Goosman (Waikato) said he hoped he would never be asked to agree to the remission of the tax on member*’ salaries. He agreed that members were underpaid, but if they were to receive more it should be done by paying them more, not by exempting their earnings from taxation. He was opposed to permitting any group in the community to enjoy a tax-free income. The sole basis of the income tax should be the income earned. Speaking of the reduction in taxation the Opposition had advocated, Mr. Goosman said the first reduction should be made in the national security tax, thus benefiting everybody. The House adjourned at 5.30 p.m. until Tuesday with the debate unfinished. Veterans’ Golf Cup In the semi-final of the N.Z. Veterans’ Golf Cup played at Rotorua yesterday, Alex C. Anderson (Manawatu) was defeated by E. Hutchison (Titirangi) 2 and 1. H. Bradmore (Tauranga) beat Hutchison 2 and 1 in the final, the standard of golf being the poorest for many years.

At the Palmerston North Magistrate's Court yesterday, Dennis Claude Hart, of Shannon, was charged with stealing a battledress valued at £3 13s lid, the property of John Alexander Clark (Levin) on July 15. 1944. Considering his past record, Mr. H. P. Lawry. S.M., sentenced him to one month’s imprisonment. A second charge against Hart was that of, on August 31, at Palmerston North, unlawfully wearing a uniform of the New Zealand Armed Forces. He was convicted and fined £5.

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