THE PRIME MINISTER

New Zealand Times, Volume XLIX, Issue 11225, 2 June 1922, Page 6

THE PRIME MINISTER

SPEECH Oft GENERAL POLITICS LAST NIGHT

FINANCIAL POSITION OF THE DOMINION

WHAT GOVERNMENT HAS DONE

We learn by telegraph that the Hon. Mr Massey, who is paying a visit to the Southland district, reached Invercargill at midday. yesterday, and proceeded after lunch to Otautau, where he unveiled a soldiers' memorial in the presence of a very large gathering. The Premier was accompanied by Sir William Fraser and Mr J. R. Hamilton, M.P.’s, and representatives of public bodies. The Premier returned to town after the ceremony, and last evening he delivered a brief speech on general politics in the Municipal Theatre. To-day he will be the guest of the Southland League at luncheon and will receive various deputations, leaving for the north in the afternoon. ' In reply to a question by a reporter as to the Government’s attitude regarding the proposed dairy produce pool, Mr Massey said he had not yet been officially approached and could not state what the Government’s attitude would be.

PER PRESS ASSOCIATION. INVERCARGILL, June 1. The Prime Minister delivered a political speech at) the Municipal Theatre to-night. The Mayor (Mr J. F. Lillicrap) presided, and the building was crowded. Mr Massey, who was very well received, said the responsibilities of the country had been enormously increased by its part in the waT. Tho public debt had practically doubled during the war period, but they were able to meet their obligations, though they had had a serious time. The cost of living had risen enormously, and necessitated additional payments to public servants totalling 44 millions. The cost of requirements of the chief departments had increased' from 100 to 300 per cent., and nothing would benefit the country so much as a. reduction in the taxation, which was an enormous burden, but, concurrently with the rise of expenditure, the national income had decreased tremendously. THE GOVERNMENT’S DUTY. Their duty was to endeavour to make the burdens easier. They had: to reduce the cost of government, the cost of living, the cost of production—and then followed the reduction of taxation. They must increase the output of the country. The problem had been tackled, and up to the present not unsuccessfully. The Expenditure Adjustment Act, passed last session with a little opposition that was merely camouflage, reduced! all the higher salaries from the Premier down. They desired at getting back about half the public service bonuses, but he did not know if they could do so, as retrenchment was most unpleasant work. Not only were salaries increased, but departments had swollen during the war, and all surplus officers had' to go. AN UNPLEASANT TASK. He never, he said, had tackled anything so unpleasant. Much had been done, but much, unfortunately, remained to he done. Dealing with taxation, Mr Massey said that tile, taxation in the Dominion was, as nearly as possible, harv that in Great Britain. A comparison with tho Australian States showed that the income tax in the latter was substantially more severe than in New Zealand. The last loan was a very satisfactory transaction, and showed the confidence of British financiers in the Dominion. He thought the corner had been turned; money would be cheaper still, ~nd, in his opinion, mortgages in broad acres would, before long, be a favourite security in the Dominion. THOSE REBATES. Referring to rebates on land andjncome tax, lie said the experiment nad been a great success. Money came in as well as at any time before tho slump, but he could not say what would be done n|xt year. If the Government could reduce taxation by the amount of the rebate/it would be glad to do so. It was possible the rebate system would be continued. He hoped the Taxation Committee, now sitting, would- he able to offer useful suggestions. DOMINION’S IMPROVED POSITION. During the last five or six months there had been a great improvement in the financial and commercial position, partly due to the meat pool, which already had done splendid work. There would, he said, have been no occasion for the wool slump if shipments had been properly handled. At Homo the accumulations had nearly gone, and soon the market would depend on ordinary supplies. Mr Massey predicted that the new season would open with wool prices higher than they are now: THE PRESENT YEAR. “WILL BE WORST OF ALL.” The present year, from a Government finance point of view, was going to be the worst of all, because the improvement in conditions did not have time to take effect. Accumulated supplies, carried forward from previous yeans, would be required, and were available. They could expect a two-million drop in income tax. At Feilding, he said, he had put it plainly that there was a deficiency of £330,000 on the year’s accounts. SECONDARY INDUSTRIES HELPED.

Referring to the criticism of the railway freights, he showed that New Zealand freights, though high, were tho lowest in the Empire. He hoped it would soon be possible to reduce the rates. In the past session, in! the tariff revision, they did something for the secondary industries, and he was pleased to note, at the splendid winter show at Dunedin, some of the results of that encouragement, which had not been given at the expense of the primary industries. He was glad to notice, when he was at Home, the increased disposition to give preference to the Dominion products, which he hoped would be translated, ere long, into a more effective Imperial preference, and he did not think that free trade within the Empire was by any moans impossible, but they must have closer relations in trade, finance, and defence. LAST YEAR’S DEFICIT. £500,000 WORTH OF COAL IN STOCK. Reverting to last year’s deficit Mr Massey emphasised that they had half a million worth of coal in stock as the result of the necessary importations to keep the railway going. He hoped it would never again be necessary to go outside tho country for coal. If they

had not spent the money on coal they would have had a surplus similarly, and if they had not given taxation rebates they would have had a surplus, but in both instances the right thing was done. The further relief of taxation they had effected last session was increasing the mortgage exemption of small men from £4OOO to £6OOO which the Commissioner of Taxes informed him affected 10,100 persons. SOLDIER SETTLEMENT. COSTING A LARGE AMOUNT. Soldier settlements were costing a very large amount, but we did not admit that the tax was going to be heavy. Settlers had struck hard times in which many experienced farmers had come to grief. -jllost of. the soldiers were tryers and we were sure the majority would face their difficulties and come through. There would he losses in connection with repayments. He believed those who had taken up sheep farming would be all right, but where men had bought land at toe high a price they would be failures. SOLDIER SETTLERS AN ASSET. The Government had never turned a tryer out and was going to see them through. He urged the people not to discourage the soldier, but to urge him to stick on his land, and when the slump was over and things settled down they would have many thousands of useful settlers added to "the producing population, as a result of what had been done for the returned soldiers. ADVANCES TO SOLDIERS. Dealing with what the country had done for returned soldiers Mr Massey quoted a return as follows: Land purchased under the Land for Settlements Act, £5,816,840. Advances for purchases private or native land, £6,724,149. Advances towards purchase of Crown leaseholds, £1,618,939. Advances towards the discharge of mortgages, £433,007. Advances to purchase or for the erection of town dwellings, £7,747,318. Loans for business, etc., and other financial assistance under the Repatriation Act, £2,197,956. Advances for purchases of stock under the D.S.S. Act, £3,903,468. Total. £28,441,317^ Of this amount of £19,759,606 advanced under the D.S.S. Act for the purchase of homes there had been repaid £1,477,151. Of the loan of £1,803,194, under the Repatriation Act for the establishment of business, purchase of furniture, etc., there had been repaid £911,110, the total repayments being £2,388,261. The land held for settlement, and ready for selection, comprised 430,000 acres. EXPENDITURE. PERMANENT efiARGES. The Prime Minister quoted a return showing the expenditure under the permanent charges for the year ended March 31st, 1922, compared with the corresponding period" of 1914. They are as follow, with those of 1914 in parentheses:— Civil list, £29,884 (£32,071); interest and sinking fund total, £8,442,278 (including war expenses, £4,657,766), against a total of £2,887,981. Under special Acts (old age pensions, including national endowment residue allocated for old age pensions £21,721 in 1913-14, and £30,744 in 1921-22), £742,244 (£416,279); military pensions, £37.647 (£33,453); widows’ pensions, £186,197 (£27,073); police widows’ pensions, £433 (nil); miners’ pensions, £28,855 (nil); war pensions, £1,722,596 (nil); Civil Service Act, 1908, £36,852 (£35,405); Defence Act, 1909, £2925 (nil); Judicature Act, 1908, £3433 (nil); miscellaneous pensions, £146,342; totals, £2,761,328 (£512,552); education purposes, £167,954 (£78,423); subsidies to local bodies, 32217,988 (£144,774); subsidies to hospital boards, £471,711 (£195,539); subsidies for butter, £240,270 (nil); miscellaneous, £542,748 (£384,748); total, £4,401,999 (£1,316,036); grand totals, £12,874,161 (£4,236,088) —an increase of £8,638,073. INCOME TAX. SOME COMPARISONS. Mr Massey quoted the following detailed comparison of the income taxation with New South Wales, the Commonwealth, and Victoria and the Commonwealth oombined in each case on an income from property of £500: ■ New Zealand rate 15.6 d, amount £32 10s. New South Wales 27.828 d, £57 19s 6d. Victoria, 15.828 d, £32 19s 6d. New Zealand irate on £IOO0 —21.6 d, £9O New South Wales, 36.373 d, £lsl 11s Victoria, 36.973 d, £ll2 7s Bd. New Zealand rate on £2000—33.6d, £2BO New South Wales, 51.571 d, £429 15s 2d. Victoria, 43.305 d, £360 17s sd. New Zealand rate on £3000—45.6d, £570. New South Wales, 64.626 d, £BO7 16s 6d. Victoria, 8G.182d, £702 os sd. EARNED INCOME. New Zealand rate on £SO0 —14.040, £29 ss. New South Wales, 23.31 d, £4B lls 3d. New Zealand rate on £1000—26.817d, £lll 14s Bd. New South Wales, 16.017 d, £66 14s Bd. New Zealand rate on £2OO0 —30.24 d, £252. New South Wales, 333.865 d, £282 4s 3d.

Victoria, 23.415 d, £195 2s 7d. New Zealand rate on £3OO0 —42.56 C, £532. New South Wales, 41.147 d, £514 6s 9d Victoria, 30.3140, £378 18s sd. The New Zealand figures do not include the rebate, and the figures for the other States were shown to be higher than New Zealand in each ca9e, except on £SOO in Western Australia, where the rate was 13.37 d and the amount £27 17s Id. HUMANITARIAN EXPENDITURE. Dealing with pensions and other humanitarian expenditure of the Government, Mr Massey- quoted the speech' by Mr C. E. Statham. M.P., in which he eulogised the Government os a friend of the widow or fatherless. Turning to economies effected, by the .government the Premier read a return showing the savings effected under the Consolidated Fund as £4,159,233, and other departments and services £1,054,499, making a total of £5,646,835. Increased charges had *to be, \ however, £610,685, and the scale of increases of classified ealaries amounted to £226,443. COMING ELECTION. ENTITLED TO ANOTHER TERM. In the course of a brief reference to the coming election the Premier said Mr Holland, M.P., had said he would help Mr Wiilford, M.P., to put tho present Government out on condition that the Liberals did what Laboui dictated, when they : occupied the Treasury Benches, otherwise they Would help to put the Liberals out. That statement had been made manly and straightforwardly by Mr Holland in a speech to his He (Mr Massey) would not hold office for two minutes longer than he could help if he wore dependent upon the support of the extremists. He wished to impress upon the people of the country the importance of a stable Government until they got through tho present crisis. There were only about two on the Treasury Benches now who were with hint when they started, but the members of the present Government were of the same characteristics as the first, had held their aim throughout and had been the same. He pointed to their record of administration, which he contended ontitled tho Government to another term of office.

The Prime Minister was accorded a vote of thanks.