FINANCIAL DEBATE.

New Zealand Mail, Issue 1847, 31 July 1907, Page 53

FINANCIAL DEBATE.

THE GOVERNMENT'S PROGRAMME. OPPOSITION CRITICISM. MINISTER OF LANDS IN REPLY. The debate on the Financial Statement was commenced on Tuesday night in the House of Representatives. Mr Massey, leader of the Opposition, said the statement covered a good deal of ground, and included many things which would more properly have been referred to in the Speech from the Throne. He reminded members of the

long struggle he had maintained to secure the reform in the auditing of public accounts. It had been opposed by the Government for years, bul now there had been a right-about-face, and the proposals had become law. So, too, with the sinking fund, which the Opposition had advocated for years. This had now become law. The Opposition had supported the encouragement of thrift by means of national annuities, and the Government had adopted the principle. He hoped this session to see it become law. There was still a reform to push through, that of preventing borrowed money being- used for maintenance of roads. Advocates of workers' dwellings would recollect that he (Mr Massey) moved the proposal as an amendment to the Advances to Settlers Act, and that was the reason why it was brought down in the form it now stood on the statute book. ..

“THE BLACK FLAG OF LEASEHOLD.” “Then I come to the land question,” continued Mr Massey. (Chorus of “Oh's” and laughter.) What a change had come over the spirit of the scene! It was just a year ago since the Minister of Lands laid his proposals before' Parliament, when the flag, which was now at halfmast, the black flag of leasehold—(laughter) —was hoisted. By including clauses which made the freehold possible, by admitting that v the option to purchase should remain in connection with those lands w y hich were not intended to be~ set apart as endowments, by admitting that Crown tenants under the lease-in-per-petuity tenure should be given the option to purchase, the Government had admitted that the Opposition was right, and that they were wrong. He knew that the conditions attaching to the latter proposal were unjust, unfair, and unworkable —and he believed they were intended to be unworkable —but iu face of the facts he had mentioned he thought no one would dis- - pute that no Parliamentary Opposition " ever stood in a better position than his Majesty's Opposition to-day. A member: Long may they live like it! (Laughter.) Mr Massey said that small as were their number, they had influenced the legislation for the country's good in a way which was never done by any other set of men under similar circumstances. He did not think it would be denied that the honours rested with the party Which had stood up for years for the freehold. . - A VICTORY CLAIMED. Speaking for himself, he would have preferred fighting out the issue on last year’s bill, and fighting it out to a finish. There was very little satisfaction

m a victory over an opponent who ran away before the first shot was fired, even though the opponent took up another position on different ground, it reminded him of the story of an American colonel., who went out shooting fin opossum. He found his opossum and pointed the gun at it, but before he fired the opossum., cried "Hold on, colonei, I’m coming down." (Laughter.) The- Government’s proposals had mystified many people who believed in tfie freehold. About the endowments, he ventured to eay there was not a single man in the House, and there were very few people in the country, who did not understand that the endowment proposals were the veriest excuse to enable the Government to nationalise so many million acres of Crown land of the colony. They would be of very little use for the purposes for which they were intended, and it would be a sorry day for this country if education and old-age pensions were dependent upon the rents from those lands. He contended that there were * many instances where land endowments proved to be a failure. This was the case in regard to Otago University, which {had to seek Parliamentary assistance in regard to its endowments. THE OPPOSITION ATTITUDE. He did not intend to discuss the proposals in detail at that stage, but he would say v this, that they would accept the Government proposals so far as they went in the direction which his party had indicated, but not one inch further, and they intended to contend just as strenuously and vigorously for the principles they had advocated. In connection with the land question, the Government required watching very carefully, on aceonnt of the socialistic and single-tax influxes in the Cabinet. (Laughter.) These iteteoses .were intended to keep, a man * affii ‘his descendants from ever becoming independent, politically or otherwise. What the Opposition wanted was that good settlers should have every incentive to industry, and conditions.Fhieh made for independence, and on the other hand they wanted to get the State out of the biid bargain it entered into years ago with the lease-in-perpetuity tenants. the policy <rf the Opposition was . simply the option of the freehold and closer settlement, without doing an injustice to anyone. •When the people of this country brought a littlo more political pressure to bear tha gentlemen sitting on the Treasury ‘ benches would be ready to swallow the uolicy of the Opposition as a whole. a» I

ready as they were to swallow part of it tho other night. POSITION OF MINISTERS.

Time was when there were statesmen at the head of affairs in this country, who laid their proposals before the people, and if they were not acceptable the Ministers walked off the platform, as they should have done in this case. When the Minister of Lands made the statement last year, “I tell the hon. gentleman honestly, and not in a political sense, that we're going to stand by our guns, and will, if necessary, go down with them —and in the twinkling of an eye,” he admitted that whilst he did not believe other parts of the hon. gentleman's speech, that part appealed to him, and liis opinion of the Minister of Lands went up 50 per cent. He thought here, after all, was a foeman worthy of one's steel, with whom it would be a pleasure to cross swords, a man who would restore the reputation of his elan; but he was very much disappointed. He (Mr Massey) hart expressed the opinion in the House that there was only one to give the freehold to the man who held a lease-in-parpetuity equitably, and that was at the original value. That statement had been received with a grossly misleading cry by people opposed to the Opposition’s proposals, who interpreted them as meaning that they proposed to give away millions of the State's money. He (Mr Massey) took up this attitude: , He was quito willing to have this matter referred to an actuarial valuation. Seeing that the lease was practically for a thousand years, that the improvements belonged to the tenant, and the goodwill to the tenant, he ventured to say that under an actuarial investigation they would get back to the original value. That was the proper attitude of the State to tho tenant of the Crown under the lease-in-perpetuity. TOWN v. COUNTRY. The whole policy of the Government had been to set town against country and country against town, to benefit the town at tho expense of tho country. (“No.” “No.”) Let him remind them of the limitation proposals of last year. If there had been agreed to, the securities in the cities and towns would have remained gilt-edged, whilst tho securities in the country ■'would have been considerably depreciated. In regard to advances to workers in the country, was it not a fact’ that nearly the whole of the Government party followed the Premier into tho lobby, and refused to tho working man in the country the same concessions that were now granted to workers in the towns? Under the system of graduated taxation proposed, business premises in the city would be exempt, and instead the homestead in tho country was taxed. The tendency on the part of the Government to make the man in tho country carry the heavy load was not to be .wondered at when they considered the personnel of the Government. There was not a member of the Government able to sympathise with the man on the land. The Colonial Secretary, Hon. Dr Findlay, had issued a pamphlet that might be called “A Plea for Socialism.”- It was supposed to be a reply to Mr Massey. Dr Findlay did not deny that he was a Socialist by any means, but defined Socialism as assist-ance-given by the State to the individual. Tho Fabian Society, which was supposed to be an authority, defined the object of Socialism as “doing away with private property in land and private ownership of capital.” What a confusion between tho two interpretations. It would be impossible to deny that the policy of the Government was Socialistic, in view of the fact that last year's Bill proposed to make private ownership of land impossible over a huge area. That was the very essence of Socialism.

LAND NATIONALISATION. Under the Land for Settlements the lands of this country were being nationalised at the rate of .£500,000 a year, and the Government had already nationalised ,£5,000,000 worth of land in this way. The Opposition supported the land for settlement policy, not in the direction of nationalising the land, but in the direction making for closer settlement. The whole drift of the Colonial Secretary’s remarks went to show that the prosperity of this colorv was due to the Socialistic policy of the Government, but what of the prosperity due to the refrigerating machine, and our exports. It was due to individual effort that we •were so prosperous, and not to the Government, whose policy was to rob their fellow-men of their birthright. The Government’s tariff proposals contained anomalies that would startle the people, in many cases, for by these proposals the wealthy man escaped and the poor man paid. He could not understand the principle upon which the tariff had been framed —it was neither freetrade nor protection, but framed in the interests of people who happened to have influence with the Government of the day. (Applause.)

MINISTER’S REPLY VIGOROUS DEFENCE OF POLICY. The Hon. B. McNab (Minister of Lands) followed the leader of the Opposition. He was; heartily applauded when he rose to speak. He commenced with an expression, of regret that Mr Massey was not in his usual good health, and therefore unable to take advantage of the immense amount of material he had intended; to make use of to galvanise the House and the country into life in regard to the terrible, iniquitious, and appalling intentions of the Government. He thought before Mr Massey finished that he felt m connection with his criticism a good deal of disappointment at. the position he found. They had only to. read- Mr. .Massey’s remarks in another part of the colony to see that he expected upon his return to Wellington to find himself the leader of a majority of members of the House, but something must have disappointed the honourable gentleman and led him to think things about the administration which nobody else had in their mmds. With the exception pf the mem-

her for Bruce, nobody else in bis Darty took the field. Mr Alison: Did not require to. CARRIED BEYOND THE BOUNDS. Mr McNab retorted that there was no prospect for them. He was sorry the leader of the Opposition had not gone more deeply into the land proposals that evening. He thought that Mr Massey a eloquence carried him sometimes beyond the bounds which he ought to go on a political platform. Mr Massey : Tell me one occasion. The Minister referred to Mr Massey's statement at a social gathering m Auckland that the Government attempted to vote £350 a year each to two deputy chairmen of committee. llow did Mr Massey arrive at that? Every member was in receipt of an honorarium of .£3OO per annum because he was a member, and it was proposed that there should be added to that sum the amount of .£SO each to the deputy chairmen for carrying out those duties. Did Mr Massey now say he was correct? Mr Massey: I never said go. Mr McN-a-b: “Is that not the key of all his criticism. He says he did not say so, but lie takes mighty fine care that tney go away with the impression.” (Laughter and. applause.) The Minister said that Mr Massey had mode another misstatement, this time about endowments in Otago. At Stratford he declared that the Government had had to come to the rescue of Otago University by buying its endowments at the nominal value of the land. The fact was that a Bill was brought in to guarantee to the University the lent it was then getting for the endowments, and if when the leases fell due they were let at a lower figure, the country was to provide the balance. The scheme was divided into periods of ten years each, and the excess or on© period was to make np the deficiency of another. Would anyone who heard Mr Massey at Strarlord gather from his speech that this was the position? People who were there said their impressions were quite different, and this was one of the things he objected to. BUYING UP FREEHOLD. Tiie Cfovernment'was accused or going ra for nationalisation of the land, but one of the things he had pointed out- in bringing forward the original Bill was that all lands disposed of under tho Land for Settlements Act must be under the leasehold tenure. At that tinio they had expended four and a half millions, and it had since amounted ta five millions, which sum was devoted to no other purpose whatever than to terminate the freehold ten’ure and put the land upon leasehold tenure for an time. Tho Government's first proposals in the Land Bill were to end that position and no longer go into the market to take land lor settlement, terminating the freehold and substituting the leasehold. They brought down proposals to compel the large landowners to put their land into the market to swell the quantity ox land which was being disposed of under the freehold tenure. This was one of the points which struck those on the other side with its full force. Large numbers of them were sympathetic at heart with .those who owned the vast estates aimed at. A man owning £275,00y worth of land at unimproved value would have had to put. £'225,000 worth into the market. If there was one thing upon which the country was unanimous it was that these large estates would have to be reduced. CONVERSION TO THE FREEHOLD. “It is said that we have thrown up the sponge- because we have offered the freehold to the lease-in-perpetuity holders. What was our position when the first Bill was brought down and when it came from committee? It was contemplated in connection with every one of those leases-in-perpetuity that the freehold should be given in connection with them.” The only difference between the original and the present scheme was that lease-in-perpetuity tenants, instead of having to go into the open market to secure their freehold, would get it under arbitration, which would decide the price at the present value. Mr Massey: Oh !

Mr MeNab went on to explain that if the tenant refused to take the land at its present value he could pay off 90 per cent, of the capital cost and free himself from all conditions and restrictions. This was the somersault the Government had done in connection with giving the lease-in-perpetuity tenants the freehold! If the original system of auctioning had been followed very little mote than the original value would have lieen obtained for the freehold. The leaise-in-perpetuity tenants, when they took up the land,.could have then purchased it, but they preferred the leasehold. Now the Government said if they wanted the freehold they must pay the present value. What Government had at so early a stage in the session placed before the House so many important policy measures? The present Government was entitled to credit for what it had done in that respect. LIMITATION BY TAXATION.

Turning to the limitation proposals, the Minister said that with an estate valued at <£210,000 the land tax rose to 2d in the £1 under the original tax, hut under the new proposals the tax upon an estate valued at <£200,000 would have risen to just double the quoted figure. He would like members to notice that the tax in future would be levied upon town as well as country lands, with the exception of business sites. This was a great advance, the importance of which was not realised. It would result in speedier subdivision than under the limitation proposals, which might not have forced much land into th© market for six or seven years. Some members thought the tax was not heavy enough, and that it started too high. (Hear, hear.) A- good many members evidently thought so, but he wished to make it clear that the power of the Crown to take land at land tax valuation would ensure that valuations were put up to the proper height. He hoped the House would pause before it increased the seal© of taxation until they eaw the effect of the Government propoale. He believed the effect would be marvellous in'.providing land for the • ris v-V. r£

landless, and be a n tierial factor in the settlement of the colony's land. There was a distinction between the large area® of Crown land in the North Island and the large estates the Government was buying. Tho struggles of the pioneer settlers were past. A great deal of this land was fairly well improved, requiring , more capital for a man going into possession than a man going on Crown land, and while it might be necessary that leasee for sixtysix years should be granted for one class of land, he did not see any reason why there should not be shorter leases for land under the Lands for Settlement Act. This country had gone to a great deal of risk in the purchase of these large estates; through good management the risk had been reduced, and some of the purchases showed a large profit. But it was a venturesome scheme at its first inception, though at the present time these estates were bringing a handsome profit into .the Treasury of the colony. He did not think they ought to keep down the profits if they could be obtained from these farms. Take the case of disposing of lands for settlement sections by ballot: They knew that a great number of men who were successful at the ballot disposed of their sections a day or two afterwards, getting for them a great sum of money. The result was that the man coming in afterwards did not get a chance, and the successful man in the first instance pocketed the profits that ought to go to the Crown. He believed that by disposing of these sections by tender, and under a tenure that would give a man a thirty-three years' renewable lease, they would be able to deal with a large number of estates that they could not get possession of at present. ENDOWMENTS. In regard to their endowment proposals: As the Bill stood when it was originally brought down and referred to the Lands Committee, the proposal for the endowments was not quite so comprehensive as it was in the Bill as it came back from committee. As the Bill came back members would remember that the option was taken away from all the lands proposed to be set aside for endowments. That was done on an amendment moved by the member for Waipawa when the Bill was going through the Lands Committee. At that time the endowment area would have covered 16,800,000 acres. Comparisons had been made between the areas proposed to be set apart; as a matter of fact, the area contained in the Otago land district was more than double the area included in the Auckland land district. The area had now been re-* duced to 9,000,000 acres, which had been distributed through the various land 1 districts in proportion to the total Crown lands available in these particular land districts. In Auckland the area was only 500,000 acres, and in theSouth Island very much more was available. That was the reason why a very largo proportion of the land had to be found south of Cook Strait. NATIVE LAND.

Native land would be disposed of undef the optional tenure. The option was contained in the Brill last year when he moved the second reading. Mr Mas-sej 7 : That’s only quibbling. Mr McNab: It w’ais in the Bill when I moved the second reading. The whole of the lands purchased from natives, if that Bill had got on the statute-book, were to be disposed of under the optional tenure. In connection with the balance of Crown lands not contained in the endowments, these would be disposed of under the general provisions of the Land Act, and land suitable for close settlement, as decided by the Land Boards, would be disposed of under the option, the tenants having the choice between cash, occupation with right of purchase, and renewable leases. So that, on the whole, when one came to look at the alteration in the Government’s proposals from those of last year, they proposed to give the tenant in possession an opportunity of getting the freehold at the present value. If he did not like that, then he could go up to 90 per cent, —that still remained in the Bilk SETTLEMENT LANDS. It was not proposed to give the right of acquiring the freehold of lands for settlement lands. There Avere many reasons operating in that case which did not operate, in regard Ao Crown lands. So long as they had to, borrow money from the London moneylender in order to buy land for the people they ought to say that these lands should only be got under the leasehold system. Mr W. Fraser: Why? Mr McNab: From the very fact that the State has to do it with borroAved money. Mr Fraser : That is no argument.

Mr McNab: The very fact that the State has had to buy back these lands is a declaration to the world that that form of tenure has been a failure. That was a very strong reason why the State ought' now* to get possession of them once more, lie did not think that the leader of the Opposition was acting fairly in trying to suggest that the Ministry was playing into the hands of the towns, and that it was not doing as much for the country settler. He did profess to have a great deal of interest in the man who was tilling the soil, and he believed there were some of the leader of the Opposition’s strongest supporters who had admitted on the public platform that, at any rate, whatever their hostility to the present Minister of Lands was, that in connection with the Minister of Agrieiilture they had nothing hutsupport to give to any of the proposals he . brought forward. The leader of the Opposition had criticised a speech made by his .colleague, the Il'ou. Dr Findlay, and had referred to the Socialistic tendencies of the present Government. What his colleague had endeavoured to show was that the Government was Socialistic to the farmer every time, and, particularly, that the great Socialistic department was the great Agricultural Department. If any person had ground for complaint in this respect it was certainly not the farmer, to whom they had ‘used Socialism on every occasion to back him ud. lie (Mr McNab) waf

not one of those frightened by names descriptive of a political party oi' anyone else, and if the support that nan been given by the Government to the agricultural community was oallecl oocialism,' then he was a Socialist every time they liked to bring the question up. They readily admitted the soft impeachment, and it must, be admitted by every person. SOCIALISM IN A YOUNG COUNTRY. Some form of Socialism ivas absolutely necessary in a young country like this. They could not afford to follow the mistakes of older countries. They were not going to do that, and if further protection was needed, and it was found that they ought to do the same thing at sea, then the Government would not hesitate to do it, if the same results could be got at sea as on tho land. (Hear, hear.) Call it Socialism or anything they liked, that form of Socialism was absolutely necessary to carry on the welfare of a young country. They saw m other parts of the world that they were not frightened by this cry of Socialism, where the State stood behind the producer to enable him to get in the best markets of the world in the best possible way. When they * had to compete against countries doing that it would be folly for us to expect that our producers could go on without State assistance. Any political party that tried to keep tip the cry that this country was running towards Socialism, and that they had to stem the present direction of the ctirrent would come to the same end as did the political party in Australia which had only one cry, “Anti-Socialism,” when it did not know what Socialism was. Where was that party now? All over the Australian States the feeling was —whatever they liked to call it —that the power of the State should bring the resources of the country behind the producer and put him in a position that . lie could land the best of his products in the best markets of the world at the lowest figure—a form of Socialism that would always be the policy of this country. There had been talk of certain members of the Opposition being carried out of the House on a stretcher before these proposals were carried, but there was evidently a demand for these proposals, judging from the trend of events, and the Opposition realised that these proposals were going to be placed on the statute book before the end of the session.

Mr Massey: Our proposals. MiTJcNab : Well, if they are your proposals, I hope you will accompany the Ministry into the lobby and endeavour to put them on the statute book. (Laughter.) The possible revenue from endowments he estimated at <£75,000 per annum, but that was only to-day. In time townships would spring up on these areas, the revenue from which would be more than double the expenses of education and old age pensions. (Applause.) AN EXPLANATION. Mr Massey to a personal explanation, said in regard to his statements with reference to the deputychairmen, that he had not made the statement imputed to him by the Minister. What he had said was that,the deputy-chairmen were to receive <£3so salary, this taking the place of their honorarium. On every occasion he went out of his way to make that clear —except one, when he was limited for time. Regarding the Otago University endowments, what he* had said was that four years -ago the University had asked to he relieved of its endowments, and that was correct. Mr McNab -denied that the Government gave to the University the nominal value of its lands. OTHER SPEAKERS. Mr James Allen said he cotild not say the Minister for Lands had made as goo l a speech as last year. There was some reason for it. He had got on somebody elße’s trousers, somebody else’s shirt. During the recess he had been conducting a land campaign, and had taunted the Opposition party with not doing so. The Opposition had not found it necessary to do so. J The Minister for Lands had done it for them. Regarding the of misrepresentation, even the Minister was not infallible. Only that evening he had said that the lease-in-Eerpetuity could be changed into the freeold. He had led the House to believe that he referred to ail tuity holders. Mr Allen proceeded to deal with the matter of the endowments of the Otago University; land said that if there had been misrepresentation on' one side then there had certainly been misrepresentation on the part of the Minister, as the Otago University had asked the Government to take oyer its country land endowments. Dealing with the land question, what had struck him most in the debates and which, was rnoye prominent last year, was the terrible fear Ministers had for the Land for Settlement scheme. That same note had been prominent that night. There had been so many changes in the Land Bill that it was very diiiicult to ■ know where » they were. # The Minister had abandoned the prm uple of the limitation from <£15,000. The optional provisions were impossible, and were intended to- be. The object of the Bill was that the freehold would be done away with. The Government was going on buying up estates day by day until they would get them all. Touching the question of finance, there were many matters in the Statement which the OpEosition had been asking for and which ad at last been-conceded. He repeated his criticism of the financial basis of the superannuation funds. He was afraid he could not alter rvhis previous criticism of the railway administration. The earnings were not sufficient to make up the amounts of interest on the money borrowed to build the roads. He did not know whether they were paying as much interest this as last year,, but what had struck him most was the enormous increase which had taken place in the cost per train mile for fuii.l and coal. They should get a better return than they were doing. He mentioned items of the proposed tariff which he considered should be imported free for the benefit of both the manufacturers and consumers. He approved the pro-

poss 1 I’o increase the contribution to that porti jn If the fleet of the Mother Country which came here, but if that were to be nken as an indication that they were not going to accept the example of Australia, then he did not think it wot Id be wise. More attention should be paid to the defence of their harbours while at the same time they were contributing to the navy. He hoped that the volunteering movement would receive more sympathy in the future, but he was not sure that even then it would be effective. Air Wilford characterised Air Allen’s speech, as being as dull as a wet, drizzling morning. No question of national policy could be settled by satire, and if no more able arguments were advanced tli an those of the previous speaker, he did not think they would hit very hard. There certainly had bten mollifications in the land policy, but ho did not think they went far enough. Regarding tho superannuation schemes, every actuary who was asked to report on such schemes must declare adversely upon them, and no actuary living could accurately judge as to the stability of such schemes. When mud was thrown some of it would stick, aud such remarks that had been made were likely to cause dirtiest —distrust brought about by innuendo and assertion with absolute want of proof, the same as the failname of New Zealand had been sullied on the London Stock Exchange. With reference to the land proposals, he regarded the leasehold as the stepping stone to the freehold. Where he dit tv. with the Government was that he wanted the option to be given. The capital value of tho freehold land held by companies and private individuals, excluding Crown lands and leases held by natives, local bodies, churches, friendly societies, rtc., amounted to <£161,771,753, Jield by .123,000 individuals. He contended that the Government had made a mistake in starting the graduated tax at <£40,000. They should have started it at <£20,000. He could not see where the Minister was going to get the big return he expected to receive from the tax, but if the limit was reduced to <£20,000 he could expect to get the revenue he at present anticipated. With a surplus of <£750,000 » it was expected to make up deficiencies which would take place in the Customs, but it could not be expected that the proceeds from the graduated tax would be sufficient to meet it. He congratulated the Minister on what he had done in regard to the absentee proposals. The success of the “refractory” land settlement depended entirely upon the administration of the Land Boards, which he considered should be elective. He would support the giving of the freehold at the original value, but there must l>e a plus to the original value. He congratulated the Minister on making the endowment nine million and said he was perfectly satisfied the House would welcome it, but he did not wish the Government to create that endowment by picking out the eyes of the Crown lands of the colony, leaving the balance to be taken up under the optional system.

At midnight the debate was adjourned until next day.

11l the House or on Wednesday the debate on the Financial Statement was resumed. Mr W. Fraser complained of the lack of information in the accounts submitted to the House regarding the in terest we paid on our loans and the sinking funds. There was no doubt that if the whole of the interest upon our debt were properly set forth it would be several hundred thousand pounds more. That, of course, would not make any, difference to the colony, hut the information should be there. The net debt was understated by <£500,000. He did not think it was any use pretending to build up sinking funds when they know that directly and indirectly the money that was being so set apart was derived from borrowed money. It was a pity that in this colony so little attention was paid not only by public men, but by the community as a whole, to the financial position of the country. That the public was paying no attention to it was due to the fact that they trusted Parliament to see that everything was right—the public knew nothing about it themselves, and cared little. Of what earthly use was the Public Accounts Committee? He should like to see a Public Accounts Committee set up upon whom it would devolve to get such information as was necessary, not for party purposes, but who would inquire into every matter connected with the public accounts. In regard to the land question, most of them were of the opinion that the interests of this country would he best served by the land being held in moderate holdings, but they did not wish to see passed into law that which many of them thought contravened all sense of justice, and was contrary to those principles ingrained in them as between man and man. Because they were not prepared to swallow the Government’s proposals, they were called enemies of the small man, and it was said they did not desire to see the settlement of the country. The State could not go on indefinitely buying estates and leasing them under the lease-in-perpetuity. A reduction in prices of our commodities was bound to come, and down would go land values. Then they would have the same cry as they had heard before, “We can’t pay our rentals,” and they would come to the State for assistance. That was a position in which the State should not place itself. The right of the freehold was one that wa6 not going to be lightly surrendered, for, no matter what this Parliament might do, fortunately there was no such thing as finality in legislation.

Mr Fisher said it seemed to him that the affairs of the colony were really well worth looking into. Since he had been in the House they had not had that individual criticism of the finances that members had a right to expect. Tho keynote of John Ballance’s policy was self-reliance and sound finance, yet what did they find? The permanent appro-

priations in 1902 were <£2,434,480; now they stood at <£3,079,079, an increase of <£644,599. Added on to the increase in the permanent appropriations, were the appropriations for newly-created departments, which had become permanent charges, making altogether an increase in the appropriations since 1902 of <£1.578,934. Added to these were the increases in the indebtedness. This in 1890 was .£37,000,000. Then, following the course of the self-reliant policy, the increase in the public debt since 1890 amounted to <£22,388,000, until now it stood at <£59,000,000. An hon. member : How much of it is reproductive? Mr Fisher : The net indebtedness of the colony has increased from <£6o 5s 3d to <£67 ils, compared with <£ss 13s in New South Wales and <£42 in Victoria.

Sir Joseph Ward: You want to compare the assets during the same period in each country. Mr Fisher : if you compare the assets on the Australian side you will find they have gone up very considerably during the past four years. Sir Joseph Ward : You want <£loo,ooo for the Wellington Post Office. Mr Fisher : 1 don’t want you to repeat the fatal error made in Dunedin, where you put up a. palatial railway station. I’m going lo ask for necessitous expenditure, not luxuries. Sir Joseph Ward: We’ll put up a cor-rugated-iron one. Mr Fisher : Let the lion, gentleman put up a corrugated-iron one if he likes. Sir Joseph Ward : You want the Manawatu railway bought. That will take a million itself. Mr Fisher : I don’t care what you spend on it so long as it pays interest. My objection is that ten millions have Lon spent on public works, and the House has been led to believe that the wbc.-e ten millions is reproductive. Reverting to the money spent on the Dunedin railway station, he maintained that it was a mistaken policy of frenzied finance. Mr Dillon : You asked last year for Mount (look, which is more valuable than the post office. Mr Fisher : I asked last year for a grant of land from the Government. What has that got to do with borrowed money?; The hon. gentleman is an amateur at finance. Dealing with the question of railway construction, Mr Fisher maintained that the expenditure on the Midland railway as proposed by the Government was a criminal waste of public money. “(Cries of “Oh!” from Southern and West Coast members.)

Mr Hardy: That’s all you know about it. It goes through my constituency. (Laughter.) Mr Fisher : Yes, that’s why—it goes through his constituency. I repeat it is a criminal waste of money. Mr Gray : Nonsense.

Mr Fisher : They can all come at me afterwards. He had gone over the Midland railway line, and asserted that a biidga was standing there which had cost some thousands of pounds, and it would be about fifteen years old before the tunnel was completed. Mr Gray: You don’t know anything about it. Mr Fisher : We shall have the Pooh-bah on the scene by-and-byo, and we will have all the information we want. ' (Laughter.) lie considered that the reasonable tiling to have done was to have constructed the bridge very near the time when there would have been use for it, instead of allowing it to depreciate. kn iu,n. member : What bridgef Mr Fisher : I don’t know the name of it. Mr Witty : The train has been running over it for months. Sir Joseph Ward: It’s the photograph of another bridge. (Laughter.) Mi Fisher held that the Midland railway tunnel contract was the most unfortunate contract let for years. Sir Joseph Ward : Is the whole thing to be allowed to go to waste? Mr Fisher: It is only supported because it goes through these hon. members’ districts. Mr Hardy : It goes through good coal country. Mr Fusher: It • ha© been supported by Southern members because they thought it would divert the West Coast trade from Wellington, hut no railway carriage can ever compete with water freights. Some of the land through which the railway runs won’t support one sheep to 64-0 square miles. Mr Buddo put forward the claims of back country settlers, and urged the importance of limiting large estates. There was a considerable area of poor land along the Main Trunk Railway, he said, and this should be granted to settlers on the freehold or any tenure they wished so long as they were settled, and kept free from weeds and under-growth. He took it that the endowment lands were to be the best lands, otherwise it would be difficult to settle them, seeing that as time went on the local rates increased. Mr Buddo referred to the many difficulties of the Maori land question, and said that while he recognised the good work being done by the Native Land Commission, a good deal more land than that dealt with in consequence of its report would not be utilised, because of the difficulties in regard to title and the responsibilities of chiefs as trustees for their people. While he was delighted with the Customs proposals where they provided for remission of duties on necessaries, he thought the working classes were going to pay a tax on boots to help themselves. The lighter class of boot intended for indoor workers, which were not made in the colony, had been too heavily taxed, and he hoped to see a reduction. He advocated protection for wheat when it was below four shillings per bushel, but not above that figure. Mr Barber said he differed from his Wellington colleague in regard to our borrowing policy. Unless the present generation was going to bear the whole of the burden of railway and telegraph •extension and leave much of the benefit to their successors it would be unfair. While the Government proposed to assist local bodies by reducing the rate of interest upon loans, they were imposing an extra expenditure upon them by increasing the duty on imported pipes, which were go largely used by local bodies for drainage and water schemes. If this was done, how did the Premier expect the rapid development he antici-

pated in his Financial Statement. Th* tax of 4|d per lb on imported woollen material rendered it practically prohibitive, and was ©o severe a blow to the woollen manufacturers of the colony that it might mean the closing of some mills. When wool increased in price, English manufacturers introduced shoddy, made Horn rags, collected from all sorts of hovels, but the colonial manufacturer did not do so, and the English competition was seriously affecting him. Ho condemned the importation of shoddymaterial into this country which was going on to a very large extent; the stuff was imported in pieces, and made up here, and -the public were led to believe that they were getting the genuine article. If this was allowed to continue it would ruin the woollen industry. With a view to assisting local industries, he urged on the Government the necessity of developing the waste water-power of the colony. Mr J. C. Thomson said the Government was deserving commendation for the reform it had instituted so far in regard to the finances of the country, for instance, the establishment of a sinking fund for wiping off the old war. loan of <£3,9®5,C00, and although members complained of borrowing, it was far better to wipe off these loans altogether in that way, thus reducing the amount of tho country’s indebtedness and improving our financial position. Then there was aleo the -sinking fund in regard to tho five millions already borrowed for the purchase of estates. Another reform required was the abolition * of the practice of charging to current expenditure loan money. There was no reason why the Ministry should continuo to do that In respect to our finances, there were problems arising which would have to be faced, notably improvement in teachers’ salaries, many teachers with degrees now receiving no more salary than a clerk. lit regard to tho land question, it was necessary that the leasehold and the freehold should run concurrently. If they were to have nothing but leasehold in this country, the time would come when tho poor man would not be able to settle on the land at all. The lease-in-perpetuity, both as regarded Crown lands and purchased lands, should be swept away upon the same terms, for in that way they would remove a great deal of discontent. Mr Izard dealt in his opening remarks with the Customs changes. He had been receiving reports from all over the colony indicating that the reductions were not operating as the Premier had expected. He suggested that the Colonial Treasurer should have power, by Order in Council, to take off the import duty upon any article if it reached a prohibitive price. In regard to the anomaly in the Arbitration Act by which one. judge held that a person should be imprisoned if he did not pay the fine, while another held tlio contrary, he personally did not think it was intended by the Act to make non- payment of fines penal. He spoke of tho necessity for improved post-office accommodation at tlic chief Wellington office, declaring that an adequate building should be erected at once. An office was urgently required in Wellington North. It was at present only half a shop, and not in a central 'position. With regard to the class of buildings asked for they were reasonably humble. They did not require competitive designs. On the way to the back-blocka recently tho Parliamentary party passed a post office at Taihape which reminded them more of a Mohammedan mosque, and if that was the class of building to be obtained by public competition it would be better to let the Government architect draw out the plans. In regard to the mail service between New Zealand and Australia,he hoped the Premier would be able to arrange that the boat leaving Sydney on Saturday for Wellington could he delayed until the Monday. Tlxe result would be that they would have the mail from England delivered in Wellington on Thursday, certainly on Friday morning, of the same week, and so save five days. He supported the immigration restriction, and believed the system of imposing an education test upon Chinese would be a great improvement upon the old poll-tax alone, because Chinese were imported under conditions which were equivalent to abject slavery, the immigrant being compelled to work for a certain term of years for his master until he paid off the poll-tax. Increasing the tax would only have had the effect of increasing the term of servitude. In regard to the increased graduated-tax, he hoped it would be ear-marked for improving the roading of the backblocks. He could not understand why timber was exempted from the tax, because once the timber went, the tax oould not be paid on it again. The exemption would facilitate locking up large areas of timber lands. He was unable to understand whether the land policy of the Government was leasehold, freehold, or both. Mr Tanner: Is it anything? Mr Izard said he did not believe in selling the lands of the Crown. They should be leased for terms of thirty years or less, with perpetual right of renewal, and if the tenant was given security of tenure he would be confent. Mr J. A. Hanan urged that the protection which had been afforded to local industries should not be withdrawn, but he did not wish to see the factory system of old lands, with its accompaniment of slums, created in New Zealand. The wage-earning classes contributed more than their share of taxation, and the romis§io|i6- “ upon necessaries would be welcomed. To a certain extent he approved of the Government’s land policy. He would have .iked the further sale of Crown lands stopped altogether. More protection should be afforded to the boot industry. , PREMIER IN REPLY A SPIRITED DEFENCE. CRITICISM ANALYSED. At 11.15 the Premier rose to reply. He commenced by analysing Mr Massey’s olaims to have originated the financial

reforms announced in the Budget. Where had Mr Massey ever advocated a sinking fund for redemption of a war loan or for redemption of the loans raised for the purpose of acquiring land lor close, settlement. For special purposes a sinking fund was right, but he did_ not consider it necessary to have a sinking fund in connection with general loans. Why had the members of the Opposition not congratulated the. Government upon paying out of revenue, the, sum ol =c 15U,UUu towards the- <£750,000 paid in. reduction qf the national debt? It- was quite true the Government was adding, to the borrowed moneys of the colony, bub it was not fair to make.comparisons with. otaer colonies, in regard to the national. dm« per head of the population. lne au<.tralian States which had been hooted against the Government did not vith a couple of slight exceptions expend money in purchasing estates for. close settlement. To make a fair comparison, they should take into account the accumulated assets in other countries and the accumulated assets in our own. As against the criticism of Gdvernment s expenditure, the Opposition should not .forget the development’ of..the colony, Uhd las year the'revenue was over £8,300,060, the greatest iii the history of the colony. SELF-CONTAINED FINANCE.

There was no. necessity for;- . this colony to go. to the -Old- Country,.rfqr its mil-, lion loan, and by this indication oi-.it. being self-contained, ~ they made themselves strong in the eyes b£ the financial people of the Old Land, and there was no justification : for' building up. a-bogus theory whigh would make people assume that there was a. weakness in our financial position. Nothing in the. way; or difficulty in meeting our financial obligations existed, nor would there be over the period of' years referred to in Oppositioq. criticism: If one thing Was damaging it was; to hear time and again the suggestion conveyed of the possibility of our being in financial difficulties, but there Was nothing to justify that either directly or indirectly, and the Government's critics were only building up a bogus theory. COLOSSAL HYPOCRISY.

“What about the expenditure iry Wellington r” continued the’ Premier.“ What is the,, use-.of' us indulging in nothing more or, less than colossal hyprocisy in urging' that the Government should keep down this loan unoney when every member knows that what I am saying is correct, that ever since the beginning of Parliament, the order paper has been crowded with* questions asking for new railways, public ’ buildings, increases m salaries and wages of public employees from end to end of this country, concessions by getting some public utility service for ■ less than / cost price, and then they talk to their constituents about the enormous borrowing of the Government.” Mr Tanner: Not every member. The Premier: The honourable member is one of the. honourable exceptions, and there are others. They had had the spectacle', of the hon. member for Wellington city criticising the Government for borrowing money, and yet admitting that, so far as the Wellington district was concerned, he was prepared to vote for loans, so long, as the necessities of the .Wellington district warranted, if that policy were pursued by each member, what result ivould tlie efforts of the Government have in trying to restrain members from pressing too strenuously upon the Government’s resources? Their efforts would be futile. If members were sincere in. their desire for reduced expenditure they would co-operate with the Government m doing the sincere thing.

A WAR CONTRACT

Mr Allen had referred to an oats transaction . in connection with the South African war, large quantities of ivhich were found to be damaged.: The impression might have been conveyed that the New Zealand Government' had shipped these oats on behalf of the Imperial Government. . That was not so. The New Zealand Government had no knowledge of .these oats until three years after they had: reached South and the assumption that the New Zealand Government had acted recklessly through want of care on the part of its officers was absolutely without warrant so far as this Government was concerned. Tor anyone to try v> and impute to this country any of the blame - attached to the condition of the oats three years after the shipment was quite unreasonable, /and the Army War Council recommended that the matter should not be pursued further ©o fax as New Zealand was concerned, THE CUSTOMS CHANGES. For ten months the Minister for Customs had been collecting opinions, every branch of industry having had an opportunity of bringing forward its claims. If members looked at the expressions of opinion on the tariff they would find—and he had no hesitation in saying it—that there -had never been an adjustment of the tariff in this colony which had given such general satisfaction. They were quite prepared to reconsider some of the proposals. They did not profess to be able to gauge, every requirement in connection with the -.adjustment of the Customs tariff to. meet the yaried industries and occupations of the of- this colony. . They were not prepared to consider any unreason-,, able propositions by people who imagined the Government should nee the Customs machinery to injure or benefit any section of the people, and no one would he able to obtain advantage out of the tariff by bringing pressure upon, the i Administration. The whole matter had been gone into with a view to helping our industries and giving relief m connection with the necessaries of life and in doing away with a large amount of revenue they had tried not to weaken the- colony’s financial position, so they had suggested ,£121,000 ,<«tra revenue, mainly upon the preferential tariff thus riving further encouragement to those live toil proposals on the floor of the House to recoSer some items, with a , view to sSTwhat changes they tot he wished to impress were desirous of helping local industries

with the fact that if they wanted to secure reasonable assistance they must be prepared to give reasonable concessions. If it could be shown that alterations were required in connection with bicycles and pipe-casings, and that the articles named could not be made in the colony, they were prepared to consider the matter... While maintaining a strong finance, they were not going to put upon the dutiable list any articles which WQuld help people to have cheaper food and clothing. THE CASE FOR,MOTOR-CARS. Here let.him say a word about motorcars.' There appeared to be an idea that this was an item intended to bene-

fit the rich. They knew the rich in this country got their motor-cars now, and could afford to pay duty, but motor-cars were put upon the free list in consequence of information furnished-.to them, and rightly so, with the idea of allowing a certain class ■of people to : get motor-cars for trade and industrial purposes. There were 3000 motor-cars of all classes in the colony, and it was a very small proportion of those - which were used merely for pleasure. . If there were 20,000 of .them it would give employment to certainly two-thirds . thh number of people nouvemploye*!:in the. Railway Department. They, were quiteprepared to put',motor-cars on*.••tire dutiable list, leaving’ those parts to come in' free that could not be made in this country. (Hear, hear.) . LAND AND , INCOME TAX. He knew that members were prepared to go further than the ..Government's proposals went. But, if they locked at the Government's proposals' in gicbo, they -would recognise that there was a compromise made in the direction of allowing this country to have advanced land legislation' to meet the conlncung conditions, and very great importance attached to the system., of taxation. There were members who urged that the taxation proposals should commence at £29,000. (Hear, hear.) But he wanted members to look at the whole position of the colony. The Government’s proposal* commenced at <£40,000, and meant an actual increase of <£90,000 k year. What took place when an increase in the graduated tax was made in .1894-5? The total amount of the increase was £23.000 p&r annum. It had not had the effect originally intended. In the years 1904-5-6 the graduated tax produced <£120,000. The Government was not taking a pennv piece off that, but adding to it <£90,000 a. year by commencing at <£40,000. The Government would have <£152,000 ol gracluated tax upon large estates from their present proposals, including the ordinary tax produced from the lover grades imposed. Those who were urging the Government to make a movement m the direction of bringing in the wnole of the 'owners of property immediately could not have considered the position or the effect that such an alteration would have. In the taking of estates m the past they had liacl the position of the Commissioner of Taxes doing his best to keen the right value/ and the owner saying, “I object to your valuation,” and the Government was compelled to take the .property at the owner's valuation plus 10 per cent. The ordinarv value of the land had nov been put on except at tlie point' of the bayonet by the Valuation Department, because the largo owner knew that he only had to stand out and go to tlie Arbitration Court,. Where witnesses familiar with the productive capacity of the land were brought to show that it had earned a certain percentage, with the inevitable result that land had gone up to a point, it should not reach if they wanted to have future settlement on fair lines. To prevent the recurrence of this condition of affairs the Government had submitted fair proposals! What would happen- under the Government's proposals ? As soon as they were on the statute-book they j,vould find that owners would realise that in future it would be well to see that the proper value was put on their laud vyhen the Governmen wanted to purchase for settlement. Mr W. Fraser : How ? Sir Joseph Ward: The Government has found throughout this country that land worth <£4 and £5 pen- acre when, wanted for settlement purposes has gone up to as much as <£2o per acre, and there are many people who don't realise that the colony had to respond and give prices beyond the ordinary value under the system that existed. No man had a right to ask the people of New Zealand to keep a law on the statute-book that was going to be the cause of an improper inflation of land. The P 1 ®- sent proposals were not only intended to check this procedure, but to j impress upon land-owners that while the Government was prepared to pay a iair value, it was not going to allow any combination of owners to enforce an unfair value when the Government wanted to buy land for the people. The spirit of compromise had had to be exercised in connection with all the land legislation brought forward in the colony, and the Government had. now brought forward proposals which fairly and reasonably focussed the ''different requirements which had to be met. A , • WHO. STARTED- THE: AGITATION? It was. not the Government who started the waging of the land war. It was Mr Massey and his friends—he was not imputing any improper motives to them-* who started the agitation to convert to the freehold the whole of the ordinary lands which had been leased. Mr Massey : What about the Fair Rent Bill ? The Premier reiterated that the agitation for the freehold was started by the leader of the Opposition and his friends. He went on to characterise as fair and reasonable the Government's proposal that tenants holding the 999 years lease of Crown lands should' be asked that they should pay the current value it they* fequirod the freehold. , (Hear, near ) If they did this they ■were entitled to it, and members who; held the belief tlisu none of the national .estate should be parted with should remember that if Wanted to secure a groat refom

in one direction they must compromise in another, and this proposal was earnestly put forward by the Government in tHe hope of settling a diiheult question. (Aplause.) 'Tlie House rose at 12.25 a.m.