EVIDENCE ON THE BILL.

New Zealand Herald, Volume LXVIII, Issue 20844, 10 April 1931, Page 11

EVIDENCE ON THE BILL.

COMMITTEE APPOINTED. WORK TO START AT ONCE. MR. FORBES' MOTION ADOPTED. [BY TELEGRAPH.— PRESS ASSOCIATION.] WELLINGTON, Thursday. An announcement of his decision to appoint a committee to consider the Hawke's Bay Earthquake Bill was made by the Prime Minister, the. Rt. Hon. G. W. Forbes, at the conclusion of his speech in reply to the second reading debate in the Houso of Representatives to-day. Thdi Frime Minister said the discussion on the bill had been very helpful. He thought it would be realised that if the country had been in a more prosperous state there would have been no difficulty in providing a larger sum than the £1,500,000 which it proposed to take from the reserve fund, but, in the present circumstances, he felt the Government would not be justified in placing upon the community any greater burden than was absolutely necessary. However, it was intended to placo this sum at the disposal of the commission, and if it was apparent that more money was required, that money could and would be provided. Action Taken in Japan. Replying to criticism of the insurance lax, Mr. Forbes said it was an entirely now principle, and it would never have been brought into operation had it not been for the exceptional circumstances. It was on a similar principle that action had been taken in Japan in connection with the earthquake and fire in Tokio. In that case, the insurance companies had been called upon to pay 10 per cent, of the losses, and if they were not in possession of the monoy, the Government had been empowered to lend it to them at 4 per cent. To recoup them for this outlay, tliey had been allowed to impose an extra levy, which amounted practically to an insurance tax. The New Zealand Government's proposals had been referred to the companies, and while there had been requests for minor alterations the companies had expressed the opinion that they would,, be able to work under the scheme and were only too anxious to assist the Government. It had been asserted by members that the insurance tax was a tax on property. It had to be agreed that this was so, but it had to be remembered that the object of the levy was to enable the rehabilitation of property. There was no doubt that the biggest claim on the proceeds would come fronf those who had. had big businesses. There would have to be discrimination, because businesses which were merely branches with resources outside would not be in the same need of assistance as those into which the owners had* put all their money in one building or; concern. Substantial Help Kequired. It was those people who would have to receive substantial help. They would bo the owners of big properties and it was therefore only reasonable to ask the property owners of the country to come to their assistance. Mr. W. E. Parry (Labour —Auckland Central) : On what basis will assistance I be given ? The Prime Minister said that question would have to be considered when information was available. A questionnaire had already been prepared, and it was proposed to formulate genera) principles for the guidance of the Court. Mr. • Forbes said the Leader of the Opposition had expressed the opinion that conciliation would have been a more suitablo method of dealing with adjustment than referring questions to a Court. Mr. Forbes hoped a good number of cases would bo settled by voluntary arrangements, and that it would.not be necessary to invoke the jurisdiction of the Court. Mr. Forbes said there was a difference in relation to subscriptions and investments. Immediately after the disaster the first feeling was a desire to subscribe, but there was an entirely different atmosphere when it was a question of a loan. Time Inopportune for Loan. The Prime Minister said there had been a fall in the prices of New Zealand securities immediately the news of the disaster became known, and he was satisfied it would not have been an opportune time to go on to the loan market. The Reserve. Fund had been opened by Sir Joseph Ward years ago, and one of its objects had been to place the conntry in a position to meet any national emergency. It had later been supplemented by Mr. Massey. The money had been invested in gilt-edged securities on which it was possiblo to realise immediately and very satisfactorily. There had been a suggestion to realise on the Bank of New Zealand shares, but ho thought it would be agreed that it was not such an easy matter to realise immediately on internal securities at a time of internal disaster as to take similar action with funds in England. It was of great importance to re-estab-lish the Reserve Fund at the earliest possible moment. It was a very fine testimony to New Zealand's credit that, in spite of the earthquaka and the fact of tho country being called upon to face its deficits, its securities were occupying such a satisfactory standing as they did at present. It was also important that this standard should be maintained. Replying to an interjection, Mr. Forbes said it was estimated the insurance tax would realise £3'18,000, while the tax on uninsured property would realise £20.000. . Members: Then why not drop the tax on uninsured property ? t Mr. H. M. Campbell (Reform— Hawke s Bay): What will it cost to collect it? Cost of Collection. Mr. Forbes said he could not sav what the cost of collection would be. It was proposed to collect it through the taxing department. ' v _ _ Continuing, the Prime Minister said it might be considered an easier method to deal with rehabilitation by means of a loan, which would be repayable, say, in 30 years' time. That would mean leaving the repayment to others. Ho was of the opinion that the correct method was to face the position themselves. It would take, five or six years under the Government's proposals to recoup tho Reservo Fund. That was to say, they would meet the liabilities in five or six years. _ Concluding, the Prime Minister said he had recognised when he introduced tho measure there were bound *to be many alterations necessary. Ho had not looked upon it as perfect. He felt the request to set tip a special committee was reasonable. 110 proposed to movo for "the appointment of such a committee at once, and it would then be able to commence taking evidence to-morrow. There were several people in Wellington at present who were, ready to give evidence. Tho bill was read a second time, and (he House, on the motion of the Prime Minister, appointed the following committee to which the bill is referred:— The Prime Minister, the Hon. E. A. Ransom, Minister of Lands, Messrs. A. E. Ansell, W: E. Barnard, IT. M. Campbell, W. P. Fndean, A. E. Jull, F. Langstone, W. D. Lysnar and W. J. Poison. The bill was then formally referred to the committee.