THE BUDGET DEBATE.

New Zealand Herald, Volume LXVII, Issue 20629, 30 July 1930, Page 13

THE BUDGET DEBATE.

CRITICISM BY MR. COATES.

PETROL tax allocation.

" IRRITATING TARIFFS."

MOTION OF NO-CONFIDENCE.

I.BT TZLKnTUrH.—SPECIAL UEPORT2JI. ] Tuesday.

Contending that the Government's taxation proposals wm ill-designed and inequitable, the Leader of the Opposition, the Rt. Hon. J. G. Coates, moved a noconfidence amendment in tho House of Representatives this evening when opening the debate on the Budget. I regret that tne Prime Minister has not had tho good fortune to mako his Financial Statement under more fortunate circumstances." said Mr. Coates. " I realise that his lot is a v»ry difficult one. At the same time. I think I am entitled to remind him of the very attractive promises he and his party made at tho last general ejection." The Minister of Internal Affairs, the Hon. P. A. de la Porreile: Ho did not make any promise. (E:eform laughter.) Mr. Coates: I am not going to refer further to the promises. From the Government point of view that is a subject rather to be avoided than referred to. Tart of the Motion. Mr. Coates then indicated that he proposed to move tho following amendment: That in tho opinion of this House, while recognising that reasonable provision should be made to balance the Budget, the Government taxation proposals ar<j ill-designed and inequitable: (1) that the increased taxation in regard to the main highways wiil not only enormously increase transport casts and add tnrther to the heavy burden carried by all ratepayers, but the suggested course is a breach oi faith with the local authorities an.L motorists, who agreed to the imposition of special taxation on the condition that no part of this taxation was to be available for the general purposes of the Consolidated Fund; (2) that the customs amendments do nut provide m a suitable manner for Empire preference and will result in a substantial increase in the cost of living; also, being spread over a wide range without discrimination wiil nor tend to that economic development both in primary and secondare industries upon which depends the ultimate solution of the unemployment problem: (o) that the present heavy burden of high costs for the primary producer will be unnecessarily aggravated, while the almost entire lack oi economy in the Government's proposals, together with the heavy taxation, will have a detrimental effect on production, this being imposed at a period when every effort should be made to afford- relief. •Desira lar Amendment. "In taking this method of raising an early protest against the taxation proposals in the Budget, it is not with the object of capturing the Treasury beaches," said Mr. Coates. "In view of tba Labour Party's repeated declaration that it prefers the present Government to the Reform Party, I do not suggest that it is feasible to enforce the views contained in my motion on the Government- Our position is » difficult one. We desire to see the taxation proposals amended. The allocation of tho petrol tax proceeds was first dealt with by Mr. Coates. The proposal to transfer the liability oi the Consolidated Fund to tiie petrol tax was evidently based on an entire misconception of the position and was a breach o£ tho transaction entered into by tiie previous Government. He felt justified in asking why it was necessary to interfere with legislation based on the principles firstly of relieving the burden falling on the local ratepayer and, secondly, of establishing a mora economic TV stem of transportation for those who used the roads. It was proposed to make £158,000 available for back-block roads, a method of allocation against which the previous Government had definitely set its faca. Burden of B3ting Costs. Qno of the first considerations was to see that rating costs were not piled np on the producers to a staggering point. The question should only b« considered in relation to rating costs. Why not teil the people that tiie £516,000 of which it was proposed to relieve the Consolidated Fund in connection with highways finances would be required by way of direct taxation on petrol'.' It might be necessary to starve the Highways Fund, but when the. country was "up against it," someone had to starve. Tim Minister of Lands, the Hon. E. A. Eansom: Do you advocate a starving policy ? Mr. Coates: After all, it. is a question of proportion. Is it desirable to overload the public with taxes if that course will cripple many sections of the community

Continuing, Mr. Coates said motorist:'! were being raxed not to provide increased rnading facilities, but to relieve rhe Consolidated Fund. The provision of £138.000 for back-block roads seemed to be an effoi't to find funds for unemployment relief.

Mr. Ransom: That is not the primary object. Mr. Coates: No. the primary object is t<> relievo fliH Consoli«i«tffd Fund. Mr. Ransom: It is to assist bnrkblock settlers. Mr. Coates: Tim proposals mads in t.lio Budgc.t are contrary to :in« arranc" menta made with the Local bodies:. Income Tax Provision.

Thti protest made by the Reform Party last session against, certain sections of the Land and Income Tax Amendment, Act was recalled by Mr. Coates, who said the Government had done the right tiling by proposing now to repeal those sections. Mr. Hansom: Circumstances have changed very largely. Mr. Coat est [will admit that, but those proposals were never sound. Commenting on tho Oovemment s tariff proposals, Mr. Conies described them as irritating. He could not see a clear line of policy running through tliem. _ .U th«" same time he appreciated the fact that the Government stood for Imperial preference and trade witnin the Empire. li. v.-as a very difficult problem, but lie thought all parties in the House would do all they could bv a fiscal policy or otherwise to assist trade within Hie Empire. There was a very Hetinitn move in Britain to encourage that trade on a practical basis. Mr. Coates stressed the point that it was desirable that the primary producer should be able to procure his tools of trade as cheaply as possible, 'rt order to enable him to compete in the markets with his products, on which the prosperity of the Dominion so largely depended. Such items should come in duty free. If it was then necessary to getfurther taxation revenue, a surtax could be imposed. It was all important in his judgment that the primary producers should bn placed on as favourable a basis as possible. Referring to secondary industries. Mr. Coates said that there were certain of them which wars entitled to protection, bat taj harried action without due regard

for tlie class or nature of the industry to bo protected was net justified. He believed there wcro also certain industries in the country which could be done away with, for their retention meant that •in unnecessary burden was being placed on the consumer. I see some trace of the Australian proposals in this Budget wo have before us to-niixht and I am certain it is not a wiso course to follow," Mr. CGates said. Mr. W. E. Parry (Labour —Auckland > entrai): Do you not think we should do more nf our own work instead of lettint; it, out tu other people'' Mr. Coates said he believed work should lie carried out lucallv whero it could be done economically and where an uni easoualile charge was not made on the consumer ;n order to keep the industry alive.

Referring u> iitiance in general, Mr. Coates said LLi;ll. it, hud to bo remembered that permanent appropriations had to be met., but a great proportion of these were made necessary through the fact that noninterest earning concerns were being conducted. A promise had been made by the Prime Minister last session that he wouid place before the House a return ■showing railway operations and figures relating to costs, interest charges and estimated revenue, as well as operating costs. Ihti Prime Minister: The return will be made. It has not yet been completed. Mr. (.nates said every effort should be made to inquire into the question of future railway construction. He was convinced that as far as some imes were concerned operating costs, and not interest, constituted the hurdle to be overcome. Mr. L. Carr (Labour —Timarn) : Would you say ths same applied to the workshops ? Mr. Coates said onerating costs should be looked to before profitable results could be expected either in the railways or any other State activity. Discussing defence, the speaker said they were entitled to hear from the Prime Minister whether it was his intention to repeal the sections of the Defence Act relating to compulsory training, or whether he merely intended to suspend tiio camps for a year. Ho suggested that the system should be kept in operation in order that the country might, have an opportunity of indicating whether it desired any alteration. It was realised that in difficult times nnessentials had to go. but anything which might tend to lull the people into a sense of false security was to be deprecated. While an attempt has been made to reduce Governmental costs, there is no dear indication that the Government has carefully or energetically scrutinised ail possible savings." Mr. Coates said. "It seems to me t>-"t thero is still room for .1:1 examination of overheads as far as the Government is concerned, and I would like to hear from the Prime Minister exactiv what was done in that direction. T want to register a protest against the taxes proposed by this Government. As far as the Opposition is concerned when these taxes comft along wo will endeavour to resist wherever possible those which are not in the interests of the country."

COST OF THE LOAF.

RULING PRICES OVERSEAS.

RECENT STATEMENT EXPLAINED

[3X TELEGRAPH. —SPZCL_V*. KEPOBTSB. j WELLINGTON". Tuesday.

Attention to recent advertisements comparing the prices of bread in outside countries with those ruling in the Dominion was called by Mr. C. A. Wilkinson (Independent—Egmont i in tlie House of Representatives to-day. The advertisement quoted the price ox tiio 21b. loaf to be as follows in varkms centres:—New York. 3d; Chicago, 9jd; Toronto, 6jd; Winnipeg, 3d; Sydney City, sd: Sydney suburbs, s*d; Melbourne City, 5d to s^l: Melbourne suburbs. s|d. Dominion nrices weri given as follows. — Uunedin, sid: Christ church. 6th Wellington, 6d '■') o,id: Anckianri. 6d to 6;d. Mr. Willumort asked the Minister of Industries and Commerce, the Hon. P. A. <i« la Perrelle. whether the statements in the advertisement, were authorised by him. whether his department had secured the information, as alleged in the advertisement. and if so, whether the department took responsibility for the figures. "I iiavo read tiie advertisement, which was not published with the consent- or previfius knowledge of the Department of industries and Commerce.'' replied the Minister. "The department was requested by Distributors, Ltd., to ascertain by cablegram the present retail prices of bread in Canada. the United States and Australia, as indicated by the prices in certain specified cities. The information contained in tire cabled replies was communicated to Distributors. Ltd.. and. with one omission, is in the main as published. The. omission read: Tn a few poorer suburbs of Sydney bread is selling as low as 4d r»nd 4Ad by grocers.'

"It, i;-. ;i. practice 'if the department to obtain information ot this nature, fur reputable ,'irrns desiring it." added the Minister. "The department, is reimbursed for tiic e-cpcuso ?o incurred and this procfdnivi was adopted in the present, instance. Distributors. Ltd.. tvoro entitled therefore to use this information for their own purooses and in a proper maimer.

"As riic nanio ot tin? advertiser was keoi out. of tin; advertisement. and the name at the department, without its permission. was brought into it-, the statement could be read as an official pronouncement-. I wish to make it clear that the statement was published without the consent of the department and that the ODinion expressed in it was the opinion of tile advertiser."'