PROSPERITY BY SPENDING

Otago Daily Times, Issue 22957, 12 August 1936, Page 8

PROSPERITY BY SPENDING

THE GOVERNMENT’S METHODS A DANGEROUS PROCEDURE MR HAMILTON’S CRITICISM (From Our Parliamentary Reporter) WELLINGTON, August 11. The opinion that the Government was trying to spend its way to prosperity unmindful of the dangers inseparable from such a course was expressed by Mr A. Hamilton (Opposition, Wallace) during his speech in the Financial Debate, which was resumed in the House of Representatives to-night. Mr Hamilton criticised the speech made by the Prime Minister (Mr Savage) last Thursday night on the grounds that it gave no clear exposition of the country’s finances and the position of the departmental accounts. In that respect the speech was disappointing. At times one was tempted to wonder whether the Prime Minister was the master mind of the Government or whether that distinction belonged to a Minister who sat close to him. The Prime Minister had also stressed the necessity for a redistribution of income, Mr Hamilton said. It was part of the Labour Party’s philosophy that people should receive what they needed and not what they earned by service to the community. In such a philosophy there was no encouragement for a man to pull his weight. There was also talk about increased spending power. The Government might be giving the people more money, but was there any assurance that that money would buy more goods? Some of the people who were getting more money would soon be saying, “ Thank you for nothing.” “ Another statement by the Prime Minister was that he has yet to see the man who works for pleasure,” Mr Hamilton continued. “ That expresses the mental philosophy that idleness is preferable to work. Carried out in practice it means that we have more men on sustenance today and fewer on work.” The Minister of Public Works (Mr R. Semple): That is a misrepresentation.

“The Government had an amazing amount of luck in winning the last election,” Mr Hamilton said. “ It has the good fortune to be in office when the finances of the country are in a wonderfully healthy and buoyant condition. The Prime Minister talks about what was done by the last Minister of Finance,, but if he leaves the country’s finances in as good a position when he vacates office—and that may not be long—there will be no complaints.” The proof of the success of the last Government in restoring stability, Mr Hamilton said, lay in the fact that it was estimated that there would be £3,000,000 additional revenue this year without extra, taxation. That was due to returning prosperity and to the foundations laid by the last Government. There were few countries in the world, if any, which had come through the slump in such a position to , take advantage of returning prosperity. The extra revenue due to returning prosperity was not enough, however. The Government had immediately clapped on an extra £1,800,000 in taxation, and over and above that had decided to borrow £3,500,000 more than was borrowed last year. It proposed to provide an extra £3,300,000 in spending power. Over four months of the financial year had passed already, Mr Hamilton said, and if it was true that the country could spend its way back to prosperity and cure unemployment there ought to be some results lay now. Unfortunately, results were still lacking. The last Government during its four years in office had added less than £ 1,000,000 to the public debt. It appeared that £4,000,000 would be added this year and before the Labour Party was out of office hat figure would probably grow to £ 10,000,000 or £12,000,000. “In its taxation proposals,” Mr , Hamilton said, “ the Government has had its eye on the big man and the big organisation. It is bringing in a political tax against its political opponents, and the consequences may well be serious. The main justification given by the Minister of Finance for reimposing the graduated land tax is that the tax was on before. Surely that is a reactionary viewpoint.” The land tax, Mr Hamilton said, was a class tax, levied on the supposition that there was some unearned increment in land. That might be so in a few cases, but it did not generally apply. _ Indeed, there was no great profit in owning land. According to the Minister of Finance, the graduated land tax was designed to catch the speculator and those who were trafficking in land. Any trafficking was confined in the main to small farms. If any large land owner was not working his land to its full capacity the Government could go to that individual and tell him so. and let him know that if he failed to subdivide within a certain period a tax would be imposed. That would be a fair thing. Why tax land that was being worked to its full capacity and could not be subdivided? The graduated land tax was unjust without a classification of land. A Government member: Why did you not do it? Mr Hamilton: We did not put oi the tax. A Government member: You took it off. The suggestion that if the Government declined to classify land, then the land owner should have the right of appeal against the tax to some tribunal, such as the Executive Commission of Agriculture, was made by Mr Hamilton. If it was shown, he said, that the land owner was working his land to full capacity or that it was impossible to subdivide the property, then he should be granted exemption from the tax. Referring to the payment of guaranteed prices for the export of dairy produce, Mr Hamilton asked what was going to happen to any surplus in the Dairy Industry Account. Would the Prime Minister state that the surplus would be distributed as a bonus? The Minister of Finance had said he would consult the industry concerning the distribution of any surplus, but he consulted the industry before, and then took no notice of its views.