STATEMENT BY THE PRIME MINISTER.

Otago Witness, Issue 2905, 17 November 1909, Page 31

STATEMENT BY THE PRIME MINISTER.

CHRISTCHURCH, November 12. I Sir J. G. Ward was interviewed to-day ; regarding the criticisms of the Budget ' by the Leader of the Opposition. "Mr " Mas&ey states," said the Prime Minister, { " that he did not expect the serious and t even startling proposals made by me in the House on Wednesday night. It is exceedingly difficult to understand from j the published remarks of Mr Mas&ey how { he arrive*, at such a conclusion. He is ' following the course, not unusual with ! him, of drawing upon a most flexible imagination in order to convey a very misleading impression. The Leader of the Opposition says, for example : ' These proposals disclose a state of things calculated to make sane and sober-minded people wonder how this wild-cat policy will end, and I have no hesitation in saying that the position disclosed by the statement, and the huge increases! of taxation necessary, have been to a very great extent brought about by want of foresight and recklessness on the part of Ministers.' It is very much to be regretted that Mr Massey does, not finish his observations,, and give facts instead of generalisation. I think I can show ' that sane and sober people of New Zea- I land have a right to comolain of such an altogether recWLets and unfounded,' statement. What are the principal increases of expenditure proposed by the j Budget? They are for naval defence and i for the reorganisation of our system of defence within the country itself. To enable these two important and necessary matters to be carried out, the Budget proposes an increaee of £300,000 per annum — namely, £70,000 for interest on the Dreadnought, and £80.000 for a Sinking Fund, £100,000 for compulsory military training, and £50.000 for three years for additional armament and equipment. The only other increases proposed are £25,000 as a contribution to the Railway Superannuation Fund and £5000 towards the Public Service Superannuation Fund, to enable the separate and comparatively small branch of the Police Superannuation Fund to be merged with the General Fund. These items give a total of £30,000 per annum. In what way does want of foresight and recklesbness on the part of Ministers account for the alleged ' wild-cat policy ' ? For the first time in the history of the Dominion provision is being made for defence in the direction which the country generally ! desires it to be adopted. In what way can the term be applied to the desire to strengthen the Superannuation Funds I have named? In what way can the term ' recklessness ' be apnlied to the principle that is adjusting these things 7 That precautionary policy characterised by prudence provides for the balance of £118,000 over and above the £330.000 of fresh expenditure that I have given. Is it recklessness where, for the first __six months of this year our Customs revenue shows a drop of about £200,000, to provide for the possible contingency of the deficiency not being made up during the

next &ix months of the year? I should imagine that the sane and sober-minded people of this country who take an interest in its affairs would prefer to see a strong financial policy maintained, even though it means additional taxation, than to allow the position connected with Customs revenue (concerning which there is legitimate room for thoughtful reflect tion as to what the re&ulte from that source will be by the end of the financial year) to be placed beyond all question; and that is what my proposals seek to do, go that to justify his allegations of a wild-cat policy and recklessness of Ministers, the only" logical^ deduction from Mr Massey's observations is that we should either abandon the proposal for strengthening our defences, both in and out of the Dominion, or dispense with defence altogether, because it is quite clear that if we establish the system proposed regarding defence, we cannot do it without the expenditure of the amount I have named. " The question of defence should be placed on a proper basis, and we canndt do this without paying something for it. If Mr Ma&sey can show me how the increased expenditure for the&e purposes can be, provided without furnishing ways and means enab ling it to be done, then he will perform a great service, not to me but to the country at large, arid I invite him to do so on suitable and practical lines, and, not by resorting to mere defamatory generalisations, which convey nothing excepting what appears to me to be an indefensible utterance if judged upon a cruefcal analysis of fact, without which such criticisms- go for nothing, and are not entitled to much weight. "As to the way in which the amount of taxation to meet this expenditure is proposed to be applied, the principal amount is to come from the death duties, and hera I wish to state that even had no proposals for increased expenditure for defence and strengthening the superannuation funds been made, in my opinion, the proposed alteration of the death duties should, as a matter of fairness to i the great mass of the people, have been effected. An examination of the present } law discloses what to my mind is an ' abeolutely rotten and indefensible system, I which imposed taxation upon the comparatively poor and allowed the well-to-do section of the community to escape. When explaining in detail the proposals to the House later on, I think I shall be able to show the true position, not based upon mere assumption, but upon the actual results of the system when .amended by the proposals by which it is intended to be superseded. I believe I am right in caving that no civilised I country in the world to-day has upon its I statute book a system of death duties' such as have operated in New Zealand for the past quarter of a century — so unfair in their, incidence, so illogical in gradation, co unjust to those leaving small amounts, and so one-sided in favour of the wealthier classes, whosS good fortune it may be to leave large sums To their beneficiaries. " The next largest item is that dealing with long distance railway fares. With I th« proposed alteration that T am re- . commending Parliament to adopt, ue „shall, .shall still have remarkably chsap longi distance passenger rates operating in j New Zealand: I " The imposition of a 1 per cent. . primage duty on dutiable goods i«* a fair proposal, and I think ttiat all will agree j that every section of the community ehould give a little towards the maintenance of the defence of the country in which they are .making their living. The principle does not affect any article on thp free list, and therefore ieaves what are known as ' breakfast table ' items — such as sugar, tea, etc. — untouched. Unless it is to be suggested that the protection of the hearths and homes of the people of New Zealand is to be paid for by one section of tne community, I do not know of any more effective way of providing a small share than by the method I have suggested. " As the banks are unquestionably paying less income tax than other organisations, and less than they should fairly J pay, I have yet to learn what substitution for my proposals in regard to them can be made, and so long as the country is levying upon portions of the receipts of racing clubs, it is difficult to understand how any rational ground of objection to raising increa&ed funds in this way can be urged, co that in regard to charges of recklessness and wild-cat policy I a>n able to give the sources from which th' 1 increased expenditure is to be met ; and what I ask Mr Massev to do, instead of generalising, is to telJ the public from what directions other than those named he would raise the money to make proper provision for the increased expenditure brought about by the legitimate undertaking of such burdens that the items I have shown are to be used to provide for. " Personally, I recognise that a lar#e portion of this amount could be sot in other ways, but with the responsibility on my shoulders I believe it to be a prudent thing for the country to obtain the requisite increase of revenue from sources that will produce the least disturbance of th? general industrial and commei-cial development of the country. That is the policy that has animated me in suggesting that changes on the linos that I have indicated should be made. In short, outside the proposed new death duties, which are both reasonable and in every way justifiable, none of the oth°r rorjoosrJs for raising taxation can truthfully be alleged to inconvenience, sn%e to an almost nnappreciable extent, the sources from which the increases are to be derived. " T look forward with interest to the coming debate, in order to learn from Mr Mas&ev what alternative proposals of a practical nature he has to suggest. I i desire to make one further comment, and that is that the people of New Zealand I are not blind to the fact that they have

y received at the hands of the Liberal Go- [ vernment very heavy remissions, both of taxation and departmental., reductions, over a considerable period, and when the proposals now before tiie counfry ■ are j con&idered -in the light of what, has , J already been done fn that respect, 1 am ' of opinion that a calm- view of the whole 1 position will enable ~ t&etn. to see that nothing revolutionary fias been proposed by me." t — Dealing with the rniS&pprehension that had arisen in regard to I th©.= jffoposed alterations to the civU seEvtce--auperair- • uuation scheme, the Prime Minister said? that at the present there vwas neT- f limit] under the present aefc^to th\e pension _ which a retired official might receive. "He " might get £600, or eyetf sfi7jDo, per- annum. It was necessa^-j that that sort, af thing should . be stopped, ' and .in order ' to preserve the right of those who were. • now subscribers, tp the fund,, he," proposed that a definite {tension limit of £250 per annum should be fixed. Legislation making £250 the maximum pension would apply to the whole service in inture, and, those in receipt -now of £400 or over (some of . whom were entitled to over £250 as pensions) the -tifar, as- a matter of fairness, would not be allowed to prejudice.' There were not a great many : men in the service getting over £40Q ayear, and as a matter of fairness and equality they would get whatever the" present act provided fot them.