Production Incentives

Northern Advocate, 27 August 1947, Page 2

Production Incentives

As an incentive to longer hours and more production, income tax and social security tax on overtime earnings would have been at ordinary rates, not at time and a half, and allowable income for age beneficiaries would have been increased to £l/10/-, with provision of increased age benefit of 2/6 for each year application for the benefit was delaved.

No country could be better off when able-bodied men were living in idleness at the expense of the rest. Incentive would also be provided for the faster turn-round of ships, and stopping the disgraceful practice of people demanding two hours’ pay for one hour’s work.

The petrol tax would also have been reduced, said Mr Holland.

■ It was a slander on motorists to say they would disregard the appeals of Britain and use more petrol merely because it was cheaper. “The Budget confesses that this country is deep into inflation,” continued Mr Holland. He could not produce the exact words, but it was said inferentially. Defining inflation as a process that ate away the purchasing power of money, Mr Holland said that it was a method of cutting the workers' wages, social security and other income without passing laws, without cancelling contracts and without writing down mortgages.

“At present it is clear that purchasing power is excessive relative to the available supply of goods, and that is inflation,” said Mr Holland. Goods available for consumption were only 83 per cent of what was available in 1938-39.

Production, particularly factory production, had fallen over the last few years.

"I have said all along that the system would break down,” said Mr Holland, discussing subsidies. “In my judgment it has broken down now.” Subsidies had been designed to keep costs down; all they had done was to hide them. Mr Holland continued that the Government now admitted that it could not keep up subsidies without increased taxes. It dare not increase taxes, and therefore the decision had been taken to raise prices. The lid was off now—not completely off, but partially off. Prices would soar, Mr Holland predicted, living costs would rise, and there would be

the demand for more wages. Already before the ink was dry on new awards applications were made for further increases. The first and hardest hit, Mr Holland said, were those on fixed incomes —the thrifty, superannuitants, legacy holders, widows, those with investments and with savings. The Budget had declared that subsidies of the present magnitude were a severe strain on the public finances, and therefore it had been decided to transfer them to be a strain on private finances, said Mr Holland. Mr Holland said that although he had asked the Minister of Finance for full details of the subsidies paid and where the money came from, he had been denied the detailed information he sought. Mr Holland read to the House a list of subsidies amounting to £4.000,000 —a list he had not obtained from the Minister—and claimed the right to equally detailed information on the whole subsidy expenditure of £14,000,000. “We are going to make every effort to get that information.” Mr Holland declared. Government chickens were now coming home to roost, and the reason for the sudden reversal of policy was now patent. Earlier in the yeat the workers had asked for a wage increase, and the Minister of Finance, realising an increase would be granted, asked the Arbitration Court tc hold its announcement until the subsidies had been I taken off. The workers then received a greater increase than they otherwise would have. The Minister’s plan was that the workers would be pleased with their increase and would not notice the increased prices, but the workers had “taken a tumble.” ! One trouble in New Zealand today was that there were too many industries for New Zealand's manpower, with too much emphasis on semi-lux- 1 ury production at the expense of essentials. New r Zealand’s future welfare depended on maintaining production from her natural resources and on giving full play to the willingness and j capacity for work of her people without placing any premium on idleness.