DEMOCRATS' PROGRAMME

Otago Daily Times, Issue 22721, 6 November 1935, Page 10

DEMOCRATS' PROGRAMME

COST TO THE COUNTRY MR COATES'S CRITICISM BASED ON OFFICIAL ESTIMATES (Per United Press Association) WELLSFORD, November 5. The statements by Mr T. C. A. Hislop regarding the estimates of the cost of the Democrats' programme were the subject of comment by the Minister of Finance, Mr J. G. Coates, in the course of his speeches in the Kaipara electorate to-day. Mr Coates reiterated his statement that the Democrat programme would involve the country in an additional expenditure of at least £22,000,000 annually. Dealing with the full restoration of the civil servants' cuts Mr Coates said the Democrat estimate, £500,000, for full restoration .was mere guesswork. His own estimate was £BOO,OOO over and above the recent 7$ per cent, increase based on an official calculation. Mr Hislop also stated that £IOO,OOO annually was more than sufficient to build up the superannuation funds. His own estimate of £500,000 was obtained from the Government actuary, and had the merit of being correct. Actually it was quite unnecessary to build up the fund as the Government was well able to meet the annual requirements from year to year. Mr Hislop disputed the estimate of the cost of the health insurance and pensions' schemes. The cost obviously depended on the benefits to be given, but the best guide was the recently published report of the official committee on which the figures were'based. The Democrats' proposed unemployment loan of £8,000,000 annually, presumably additional to the present programme, would mean annual loan charges of about £400,000 a year for the next 50-00 years. If the policy continued beyond the first year the loan charges would soon reach £1,500,000 a year for a similar period. The exchange premium under the Democrat plan would be replaced by an export subsidy of £3,000,000. Last season the exchange benefited farmers to the extent of approximately £14,000,000. The improvement in the general economic conditions showed clearly that the rest of the community had benefited as well as the farmer. The direct charge on the Budget as the result of the exchange was £1,600,000, and the increased taxable capacity resulting from the improved conditions more than covered this. Since 1931-32 the value of of production had increased from £83,600,000 to £98,800,000. Since 1933 wages and salaries bad increased from £58,900,000 to £65,000,000. The business profits and other incomes had also increased, and as a result the Budget had benefited by at least £2,000,000 above the cost of the exchange. A subsidy to 1 the farmer equalling the total exchange benefit would involve a direct Budget charge of at least £13,500,000 instead of £1,600,000. If only £3,500,000 were provided the farmers would be over £10,000,000 worse' off and the direct cost to the Budget would be doubled. The proposal also would involve discriminations between the farmers' administrative difficulties and the resentment against individual discrimination would cause the scheme to collapse quickly. .'«The statement that the Democrat programme will leave a gap of £22,000,000 still stands," said Mr Coates, "and is based on official estimates. The electors must not be beguiled by the impossible promises of political novices."