WORK FUND

New Zealand Herald, Volume LXXV, Issue 23113, 11 August 1938, Page 15

WORK FUND

UNFAIR USE DENIED ACCURACY OF ESTIMATES MINISTER'S CONTENTIONS POSITION OF LONDON CREDITS [BY TELEGRAPH —SPECIAL REPORTER 1 WELLINGTON, Wednesday A denial that there had been any improper use of moneys from tho Employment Promotion Fund to obtain an estimated Budget surplus for tho current year was made by tho Minister of Finance, the Hon. W. Nash, in his reply to the financial debate in the House of Representatives to-night. Mr. Nash devoted the first 20 minutes of his speech largely to a reply to the points raised last week by tho Rt. Hon. J. G. Coates (Opposition—Kaipara). "One thing which tho member for Kaipara pointed out," said Mr. Nash, "was that tho present world trade outlook tended to show that the figures in the Budget are doubtful. This shows that his mind is clearly running along the lino that there is another slump coming in Now Zealand. He pointed to various trends overseas, such as falling commodity prices, and suggested that tho same influences must extend to New Zealand. Question of Psychology "We could have a slump, here within a year if we cared to follow the psychology of the past," Mr. Nash continued. "If we anticipate a recession, people will start withholding their money and the slump will come. The member for Kaipara merely argues that because there has been a recession overseas it will normally come to this country. We do not agree with that argument." Mr. Coates had stressed the use made of employment funds, the Minister said, and had suggested that if the funds had been properly used there would ho a Budget deficit of about £600,000. Several individual votes from tlio Estimates had been quoted. It was true that there was a credit of £60,000 to tho Land and Income Tax Department, but that department was now charged with the task of collecting the employment tax and levy, and the sum was on the Estimates to cover the costs of collection. Other Votes Explained The Labour Department was receiving £280,000 from the Employment Promotion Fund, Mr. Nash continued, but that department was doing all the organising work in connection with em-rroyment promotion. The vote of £12,000 for the Native Department was to cover tho cost of supervision in native employment schemes. There was also a credit in the vote for the Air Department, but it was there only to cover labour charges in the construction of aerodromes. With regard to tho sum of £131,000 credited to the Agriculture Department the greater portion was for assistance to fruitgrowers, while the balance was largely to cover tho destruction of noxious weeds. "There has been no unfair use of the employment funds," Mr. Nash added. "Some additional moneys have boon used in connection with public works, but that point can be dealt with later. It is true, of course, that moneys in this fund next year will be devoted toward the social security scheme." The Money for Housing Mr. Coates had also asked where the money for housing was coming from, tho Minister said. It was being provided by means of Treasury bills and a perusal of the Public Accounts "w'ould provide all tho necessary information. Doubts had been raised as to the accuracy of the estimated revenue from customs and sales tax, the Minister continued. Revenue under both these headings was working out very well and was in keeping with the estimates. Certainly there would be a reduction under those headings, but that had been anticipated. \ The same argument did not. apply to income tax because of the fact that the tax was paid on last year's incomes. Position Must be Watched "The member for Kaipara made the point that every trader is likely to be affected by any shortage in the sterling funds," said Mr. Nash. " I would say that they were also affected bv a storing up of those funds, because at one time we were accumulating sterling balances while tho people hero were going short of things which were essential. "The position of the London funds must have an effect on the internal economy of the Dominion," the Minister added, "but it should not be allowed to determine the economy of the Dominion. However, I agree that the position of the funds must bo watched." Mr. Coates: The Minister has not referred to the point I raised regarding the payment of maintenance out of loan accounts. "]t was stated that the vote for maintenance of public works and services had dropped from £1,093,000 to £668,000," said Mr. Nash. "The ques-' tion was why there should bo such a disparity or such a difference. I will be glad to go into that point a little later, but at tho moment I have no notes in regard to it."