DEMOCRAT POLICY

Otago Daily Times, Issue 22738, 26 November 1935, Page 9

DEMOCRAT POLICY

MR COATES'S CRITICISM I RESENTED BY MR HISLOP (Per United Press Association) WELLINGTON, November 25. The criticism of the Democrat policy and Budget proposals made by Mr J. G. Coates in Auckland was replied to by Mr T. C. A. Hislop, leader of the Democrat Party, to-day. Mr Hislop said that Mr Coates's figures and statements were so inaccurate and irrelevant and showed such gross ignorance of the principles of finance that he was confirn.ed in the belief that Mr Forbes should have been allowed to retain the portfolio. Mr Coates's criticism of the Democrat budget proposals was ludicrous. The basis of his argument was as follows: — Revenue estimated in Mr Coates's budget - • • • £25,742,000 Revenue estimated in the Democrat budget . . .. 24.055,000 Difference 1.687.000 Mr Coates then stated that the Democrat tax reductions would cost £5,040,000, so that there would be a gap jf £3,353,000. The vital mistake made by Mr Coates was that the tax reductions (excluding the present employment tax, which Mr Coates himself admitted was outside of the budget, being applied to the Democrat health - insurance and pensions scheme) was, on Mr Coates's own budget figures, £2,680,000. This immedi atcly reduced the gap between Mr Coates's budget estimates and Mr Hislop's to £993,000, which was adequately covered bv savings and revenue increases to which Mr Hislop had referred. In other words, Mr Coates, having overstated the budget tax reductions by no less than £2,360,000 on his own budget figures, had proved that the Democrat budget was correct. With regard to the individual items to which Mr Coates referred he proposed to deal first with the amortisation fund commitments. There was an ii.crcase ft £186,000 under the leading "Repayment of public debt, 1925," during the lasr financial year, and no less than £50,688 under the head "Administration and management," an increase in the latter item of over 90 per cent. These ' + oms all came under the head "Amortisation of debt." Mr Hislop said he did not propose to discontinue "the amortisation of debt" payments, but he certainly intended to review the costs of administration and general incidence of payments. It would be his endeavour to stabilise this item as far as possible at an adequate but not excessive level. With regard to annual appropriations, Mr Coates stated that this item in his budget totalled £6,715,000 after deducting pensions. Mr Hislop's estimate was £6,840,000 excluding pensions. Mr Coates therefore said that the Democrats would have only £125,000 for other items, and that " the expenses of the revenue departments alone amount to three times that sum, to say nothing of the costs Of administration." Mr Coates should know that these items were included in the appropriations and were not separate items by themselves. With'regard to health insurance and pensions, Mr Coates said the cost of a universal scheme would be £12,050,000. The cost of the Democrat scheme, which was .more limited in its nature, was £5,050,000. Obviously a universal scheme was absolutely impossible, and Mr Coates was simply telling fairy tales when he said the Government intended to introduce such a scheme. The cost of salary restorations and superannuation subsidy would not amount to more than £850,000. Mr Coates said that salary restorations alone would cost £BOO,OOO, but he knew that, portion of the cost was borne by the trading departments. The system of economies that Mr Hislop proposed to introduce following the recommendations of the Na-tional Expenditure Committee would allow of departmental savings, apart from other savings, which would more than coyer the required sum. The actuarial liability on the superannuation funds, according to Mr Coates, was £22,000,000. Who was responsible for this disgraceful condition of the funds? In actual fact the sum of £300,000 per annum would be adequate to put the funds in a secure position. Mr Coates was actually providing £200,000 per annum at the present time, and Mr Hislop had budgeted for an additional £IOO,OOO. With regard to subsidies to farmers the sum of £3,750,000 on to-day's prices would bo more than adequate to pay the necessary subsidies to fanners in need Mr Coates said that farmers were getting £14,000,000 from the exchange, and Sir Alfred Ransom said recently that they got £9,000,000 from exchange. The actual net benefit to farmers after deducting all additional costs was less than half that amount. Mr Coates had stated that Mr Hislop's proposals would give onethird of the exchange benefit at double the cost to the Budget. Mr Coates was very concerned with the costs to the Budget, but lie (Mr Hislop) was more concerned with the cost to the community. Mr Coates's exchange plan (on his own figures) cost the people £14,000,000 per annum to give a benefit which was largely illusory, and which chiefly went to the very big farmers who were in no real need. The Democrat proposal would cost the community onethird of Mr Coates's exchange subsidy and would give the fullest measure of assistance to those in need. Some time ago Mr Coates said the Democrat policy would cost £22,000,000 in addition to the existing charges, and he had been vainly endeavouring to substantiate this ever since. Not one word of real proof had he offered. Mr Hislop claimed that he had proved the practicability of the Democrat policy to the last letter. Mr Coates had again attacked his statements with reference to the public accounts and the reports of the Auditor-general. Mr Hislop said that he had stated nothing but the plain truth, provable to the hilt.