FINANCIAL STATEMENT.

Otago Witness, Issue 3101, 20 August 1913, Page 34

FINANCIAL STATEMENT.

DEBATE IN PARLIAMENT.

SPEECH BY THE HON. MR FRASER

(Per United Press association.) WELLINGTON, August 13.

In the House of Representatives to-night Mr MacDonald opened the debate on the Budget. He said it was a rather difficult matter to discuss, as the Budget was an absolute contradiction of the Government’s utterances in the past. It seemed to him to simply be the departmental estimates, the only new thing being a vote of a few thousand pounds for fruit-growers. There was not one line >in the Budget outlining anything new. The Government had taken a stop backwards. Less money was voted for roads, bridges, railways, settlers, and workers. The Budget, to his mind, was simply a vote-catcher. The Government had professed to be able to carry out the work of the country without undue expenditure and extravagance, but nothing was forthcoming to indicate the carrying out of that policy. As a matter of fact the contrary was the case. It was not the intention of the Government in compiling the Budget to enlighten the House or the country, but to juggle with figures so as to prejudice its predecessors. He found great difficulty in discussing the Budget owing to a number of returns being held back. The public debt was increased last year, and there were commitments this year for £673,000, and on the strength of "that the Minister of Finance asked for the sanction of a further loan of £1,750,000. If all that previous Governments had done was done for electioneering purposes whv did the present Government come and ask for that authority? Dealing with land settlement, ho held that the Government had had a whole year to form a policy. It had accused the previous Administration of a taihoa policy, but the present policy was a stagnation one. In 1912 647,000 acres of Native land were opened up, but in 1912-13 only 452,000 were alienated, which meant that the Massey Government had gone back over 2000 acres in one year. lie quoted ■figures showing that more Crown lands had been opened up by the previous Government per year than was being done under the present Government. He felt confident that the present Government bad not pleased its most ardent supporters in regard to public works, Crown and Native lands, ami lands for settlement. The Government had done nothing but stir up unrest in the public service from one end to the other at a cast of £IO,OOO per annum. The Government was pursuing a huge plunging policy, such as had been condemned by it in the past. On the subject of railways he contended that the Government had found it necessary to import a manager for the service, which last year, without the new general manager, had employed 13,000 men, who earned an average of 54s weekly and handled 13,000,000 •p a ‘s ser) g' ( -’ rs . arl( I 6,000,000 tons of goods, showing a profit of 4 per cent. Tho Government was doing nothing for the poorer settlers, and those in the back-blocks or the workers. Ho contended that tho millions which were being borrowed by the Government did not benefit those who were really entitled to benefits from a parental Government. The country had gone ahead by leaps and bounds during the past 21 years, and he would only bo too glad if when the present Prime Minister's time came to hand over the reins of office ho would be able to show that the country was in as good a position as he found it. Tho lion. Mr Fraser said that all Budgets must bo in many respects similar. His party had never opposed borrowing, but it did object to extravagance. There had never been a Budget laid before the House which was clearer in giving the position of tho dominion. The Minister of Finance deserved groat credit for the excellent way in which he had set out his figures. Ho had never said that there was no money for roads or bridges. What he did say

was that until he some certitude that a loan would be floated he would not make any promises. They might have had to wait for six months for money for all they know. They were hovering on the brink of a European. war, and that was why he had observed caution. When he knew the money was available he immediately put in hand the work which Parliament had authorised. There was not a penny available for new works. Alb of the three million loan was needed for commitments, and a further millions had to bo found bv next July to redeem debentures, the holders of which had intimated that they must have the cash. To meet this and carry on the necessary works of the country the Government would have to raise no less than £12,000,000 between now and December 31, ISIS. Pie ventured to say that financial men in England knew the position in New Zealand and any other country far better than nine-tenths of the members of the House did. Mr MacDonald had complained that they were borrowing too much, and in the next breath he said they w.ore not spending sufficient. How could they spend if they did not borrow? A Member: Taxation

Mr Fraser: How can you get three millions in a year by taxation? There were many eases where men were put on land which was loaded for reading, and they had been there for s:x or seven years and no road had appeared yet to allow these men to get to their sections. Ho hoped 'Some relief would be given to those settlers. What they wanted to do was to put as many on the land as possible, and to give those on the land comfortable conditions and means of ingress and egress. Mr Buddo, commenting on Mr Fraser’s reference to short-dated debentures, contended that the raising of loans was only a gamble against time. The Minister who raised a long-dated loan gambled against the rate of interest at the end of that long period, while he who raised short-dated debentures took the risk of dear money at the end of the shorter period. Ho defended the liabilities called commitments, and con tended that it was nothing to our discredit that settlement was so far ahead of ability to road the land. He applauded the proposal in the Budget for the erection of cool stores for fruit and the grading of it. He held that the fruit industry was agrowing and paying one. and deserved the greatest support possible, Mr Nosworthy said the day for meteoric Budgets had gone. They had come to a period when the thing wanted was plain, crude facts. This Budget gave the country an honest statement of its position, and that was what members opposite did not like. Tlie prophecy that the coming into office of the Reform Government meant retrogression had not been fulfilled. The legislation which they were to repeal had not been repealed, but had been improved by the party now in power He the Minister of Railways on the successful management of the railways during the year. Mr Davey: What do you want to bring out another man to run them for? Continuing, Mr Nosworthy said he objected to the methods in which the Ward and Mackenzie Governments had raised money. He did not object to the borrowing of the money. The Reform party was doing what Sir H. Atkinson had to doclean up the finances of the Liberals. WELLINGTON, August 14. In the House of Representatives this afternoon Mr M’Callum continued the debate on the Budget. He held that it was barren of policy and consisted simply of the reports of the departmental heads—a thing which a junior clerk in the Treasury could have compiled. The G vernment should consider such a statesmanlike policy measure as nationalising the main roads of the country and railway completion. The policy of the new administration was indicted for being responsible for elevating the rate of interest higher than it had been for 25 years past. He maintained that “the cleaner political life” they had hoard so much of had not materialised. They demanded that they should have control of the finances, yet under “unauthorised expenditure” in the Budget the alarming sum of £191,408 appeared. During 21 years of the Liberal Administration never once had the unauthorised expenditure exceeded £123,000. Hie point was that the House should control the whole of the finances of the country. Mr- Hunter commented on the fact that the Minister of Finance had afforded the countrv every possible opportunity of studying the cost of raising loans. The Minister had displayed marked ability in raising the last three-pull ion loan for an extended period. Dealing with land settlement he said the Ward Administration had purchased 45.014 acres in Hawke’s Bav at a cost of £329 , 960. During the Mackenzie Administration 10.327 acres were acquired at a cost of £77,533, and the Massey Government had acquired 16,210 acres at a cost of £76.338. He urged that consideration should bo extended to the people who had taken up land at an excessively high value. The effect of the increase in the graduated land tax was greater activity in subdivision in Hawke’s Bay. He knew that its effects would be greater in the future.

Mr Webb sair] ho bad listened carefully all the soeeches. but bad heard nothing that would give hope to the great mass of the people of New Zealand. The tax imposed on the squatters was insignificant as compared with the unimproved value that bad been placed in tbo pockets of the big landlords. No Government vet bad tackled the land question as it should have done. A lot of money had been voted for roads and bridges in back blocks, but it was bis belief that a lot of that money was gravitating into the pockets of the squatters. The Government was neither representative of the farmers nor helpful to the. farmers. He attributed the downfall of the Ward Government to the introduction of the Defence Act and the presentation of a Dreadnought. Dealing with the Waihl strike he contended that for five months not one charge was laid against any of the strikers. Then the Government sent the police there, and they commenced pin pricking and trouble began. Thev laid the death of the man Evans at the door of the Government for maladministration. He called upon the Government to hold a public inquiry and clear itself of the stigma of having caused the chaos which reigned there. He pleaded for a considerable increase in the salaries of teachers. He contended that the Government had no right to prevent the

police from forming an association just as I the farmers, merchants, and others were doing. He believed ’ that policemen’s salaries should also be increased. The present party was neither clean, progressive nor humanitarian. It was not clean because no clean Government would rest on the votes of pledge breakers. He came to the House with a direct message from the democracy, and that was that the Massey party did not occupy the Treasury benches with the sanction of the people of New Zealand. Mr Brown contended that the proposed increase in teachers’ salaries was an insult to that profession. He commented on Mr Fraser’s statement the previous night that English money lenders wanted £4,500.000 in cash next year. That was what the English financiers thought of the present Government. Dealing with the land monopoly, he contended that 105 persons owned over 1,000,000 acres, yet the Government was looking round for forestry reserves to cut up. Near Napier there was an area of 57,312 acres, holding 13 occupiers, and worth £191.419. If it were cut up it would settle 572 families. There were dozens of other holdings similarly situated, and still the Government looked round for forestry reserves.

Mr Anderson said he was sorry to see land monopoly in Hawke’s Bay. ‘ He had suggested the • cutting up of those large holdings to the late Prime .Minister, but he had not seen fit to do so, whereas the present Government had endeavoured to do so by imposing a graduated land tax. The Massey Government had cut up 16.210 acres since coming into office. Dealing with the freehold he asserted that to say that the great majority of people did not prefer the freehold was stating something which was not correct. That was borne out by the fact that the freehold had been endorsed by the House. On defence matters he asked what the country would be if we were not prepared to defend it? A person who was not prepared to defend it with his last drop of blood should pack up his swag and “get.” He contended that the Government did not interfere in the Waihi strike until the Mayor and a large number of citizens forwarded a deputation to the Prime Minister and also petitioned it to protect them and theirs. Ho defended the Government’s actions towards the working men. ” A member of the Opposition had charged the Government with being politically corrupt. If it was, then God help the Opposition ! He agreed with the proposal that the backblocks should be roaded before, land was opened for settlement. He urged, in connection with the electoral reform proposals in the Budget, that the system of proportional representation should be introduced, but in the meantime he favoured the abolition of the second ballot and a return to the old system. Mr Myers congratulated the Minister of Finance on the satisfactory position disclosed in the Budget. It was also encouraging to note the prosperous condition of trade, but when he turned to the question of the public expenditure the position' was not so pleasing. The expenditure was creeping up to such an extent as might well “ make some men pause.” The railway expenditure had gone up, partly due to an increase in wages, but largely to the wasteful methods of railway construction indulged in by the Government. In face of these facts it would only be honourable if the Government, with its brief experience of office, -would now retract all its previous charges of extravagance made against its predecessors and admit that Government could not go on without an increasing expenditure. Speaking of the public debt, he pointed out that the average increase in the past 21 years was £3,416,174, but the present Government had in its first year put on £5,706,850—a fairly good performance for a non-borrowing Government. Generally the Government had been on a good wicket. The revenue was buoyant, trade good, and it had not had to go on the money market at its worst stage. There was no reason why Ministers should take the pessimistic view of our affairs that they did. It was the. optimists who made a country, and with the knowledge that money was becoming easier there was no reason why they should be anxious about the future. He also noted that the unauthorised expenditure was the highest for many years, and he would like to know why that was so under an economising Government. Where, he asked, was the general policy of the Govern-' ment? Where was the promised electoral re orm? Where was the local government reform which they had promised from every platform? He warmly censured the opnonents of the Defence Act, the principles of which would soon be adopted by the British democracy. Mr Bell defended the Defence Act, and contended that if tlie dominion was to be kent intact we must be prepared to defend it. Mr SeVldon moved the adjournment of the debate, and the House rose at 11.50 p.m. August 15. When the House of Representatives met this afternoon Mr Hannn continued the debate on the Budget. He contended that the figures provided bv the Minister of Finance were lower than would be the ease in connection with the land and income tax. He contended tha.t the people wore getting disappointed because the Mias soy Government could not nroduce a policy, and it could not because the constructive ability was not there Tic deplored the non-fulfil-ment of the Reform party’s nromise to produce a Local Government Bill, an Electoral Reform Bill, and a naval poliev. The Minister of Defence had come, back with proposals, but the Cabinet had turned them down, and the Government was unwilling to face the question. They looked to the Government for a load. 'lffierc was no policy in the Government’s Budget—nothing to inspire anyone. Mr Wilson urged that a considerable amount of the increased expenditure was on account of the administration - o? the Defence Act, which had been put into

operation by the late Government. He went on to say that the landed people of the dominion had in many cases taken up the land under very arduous conditions. They had had to undergo great hardships. Many failed, b\it some had won through and made their holdings profitable. It could not be proved that the large landholders oppressed the workers. The oppression, if any, came from the people who ran the industrial concerns in the towns. The land, he admitted, was wanted for settlement, and he supported the graduated land tax for that purpose, but he objected to taxing land in the back country to the same extent as the land that was easily available for settlement. The graduated tax, however, would not enable the man with no capital to get on to the land, because the owner selling would endeavour to get tne best price on the best terms and on the shortest possible terms of mortgage. Such a system would only tend to increase the holdings of men who already had land. Mr seddon said he could see from the Budget that the Government was not going to bring down any humanitarian Jegislatiort, excepting the old-age pensions.

Mr Young: Which your side stonewalled. Mr Seddon denied the suggestion that the Opposition had opposed the Old-age Pensions Bill, which had emanated from that side of the House and which had been opposed by the people who now sat on the Treasury benches. He made reference to work in the Otira tunnel, and said that since the Public Works Department had taken over the contract things had gone right up till the present. The men were working ander particularly discomforting and disagreeable conditions, and as there had been talk of loafing and that the men were being watched, he thought the Minister of Public Works should investigate the matter, else there was a possibility of trouble arising. Mr Escott submitted rebutting evidence to the allegations of the previous speaker respecting the policy of “ spoils to the victors.” He hoped the Government would seriously tackle education reform. The Government had been criticised for its lack of policy. Well, it was better to be remembered for performance rather than for its promise, and he looked for plenty of legislation before the session endeci.

Mr Russell said the members of the Government were asking where was th«} policy of the Opposition? He could say that the Liberal party’s policy was represented in the legislation which had been passed during the past 20 years. There was a large portion of the people in Ne\v Zealand who followed the line of thought as outlined by Mr Webb on the previous day, but that member’s ideals could not be canned out in one Parliament or two. It must be a matter of gradual evolution. He drew attention to the stoppage of the construction of 10 lines of new railways, representing £1,000,000, and he also mentioned the stoppage of other public works, the cessation of co-operative works, the reduction of loans to settlers and workers, and the neglect of teachers. He catalogued the Budget under five headings—the increase of expenditure, increase of national debt, climb down of the non-borrowing policy, climb down of reduced taxation, and lastly there was no policy. The increase of expenditure over the increase of revenue last year was £183,900, and that money had to be obtained in order to carry on the country. The Government’s policy was said by the Prime Minister to be settlement, more settlement, and still more settlement; yet the Government had saved £100,221 on the estimate for land settlement during the June quarter. The public. works estimate for railways had been 'cut down by £BOOO, and money had been saved from the estimates for widows pensions and old-age pensions. The education estimates, too, had been under-ex-pended, but they found the defence expenditure exceeding the estimate by £23,805. He contended that the figures in the Budget convicted the Government of incompetence or dishonest estimates. He criticised Mr Allen’s visit Home for loan-raising purposes, and held that New Zealand’s loan at 4 per cent, at 98 was still quoted at 4 per cent., vide the Financial News of June 28, and all other colonial stock was quoted at per cent. That, said Mr Russell, was the Government’s brilliant coup. The Government was responsible since it took office on July 10, 1912, for £6,521,460; yet the Government advocated a curtailment of borrowing. Worst of all, the Government was going to take power to float Treasury bills in London. The late Government had been accused of leaving commitments for £770,000 and only a credit of £17,000 to meet them, but the Budget showed that at June 30 the commitments were not £770,000 but £711,000, and the cash in hand £95,000. He said, in conclusion, that the Budget was a very disappointing one.

The Hon. Mr Allen contended that the Reform Government’s policy was contained in last year’s and this year’s Budget, also in the bills which tiie Government was bringing down. Mr Russell had said that the Budget contained evidence of the prosperity and soundness of the country, and Mr MacDonald said they were proud of the position they were in to-day. What had those members to say, then," to the Budget? The public knew what the condition of the country was when the present Government took office, and what it was now. The last Government had raised a loan to fall due in the same year as another loan of three millions, making a total of seven and a half millions to bo paid off in one year. Was that sound finance? He maintained the country was in sound and prosperous condition. The change of Government had not checked the progress of the country, but the country had, under a staple Government, flourished. The exports for 1912 had been £20,426,000, and in 1913, £23,566,000. During the last six months the exports had exceeded the imports by six millions. The Government’s expenditure on roads and bridges had been

adversely criticised. He quoted the following comparisons to show what had been done:—ln 1907-8 £381,000 had been expended; in 1908-9, £543,000; in 1909-10, £422.000; in 1910-11, £344,000; in 191112, £520,000: and in 1912-13, £471,000 The years 1908-9 and 1911-12 were election years, and it was impossible to keep up such abnormal expenditure. Ihe grants for roads and bridges had been larger this year, excepting the two election years quoted, and it could not be said that the Government had neglected the settlers. Dealing with the Post Office Savings Banks deposits he said the deposits for the year ended December, 1912, were £IOO,OOO ahead of the deposits for the preceding year. The reason for the withdrawals was the greater interest offering by outside investment. The rise in the rate of interest could not be attributed to any Government; it was worldwide, and he considered that New Zealand had come out of it very well. Dealing with advances to settlers, lie said there was no denying the fact that the advances had been cut down, but he said the country could not go on with the loan authorities they had. In one year the preceding Government had loaned out £2,000,000 to settlers, but that was an election year. They were now providing for renewals of mortgages on Crown leaseholds. He admitted the increase in expenditure, and would like to see it lessened, but they had to meet the commitments of those who preceded them. That was the cause of the increase. /Ike policy of the Opposition had always been to put off till to-morrow the evil day and let someone else- bear the burden. Dealing with the increase of £103,000 in the defence expenditure, he said that about £IOO,OOO of it was non-recurring. In any case, he was not responsible for it. He did not buy horses and batteries of guns, rifles,- and tents. He did not complain about it, as it was necessary. After next vear the scheme should cost not more than £400,000 to £450,000 annually. It was absolutely impossible to estimate the Customs revenue. Everything depended on matters over which they had no control. Hast year strikes at Home materially affected the revenue, and similar troubles might occur at any time. He maintained that his figures concerning the commitments and available finance at June 50, 1912, were correct when the that the Government was not conservative. It had put through more reform legislation than any previous Governments in a similar time. He agreed that figures were taken out. At that time the country was £879,000 to the bad, and now they were over £1,000,000 to the good. Mr Lanrenson said Mr Allen’s remarks might go down in the back-blocks of Bruce, but the country at large would not swallow them. When the Opposition got into power some 17 months hence it would bring down a complete policy as far removed from the Reform policy as was possible. He criticised the administration at the Cook Islands, and severely censured the issuing of a circular curtailing the business of the State Fire Insurance Department by freeing borrowers from Government departments from insuring in that useful institution. Ihe Government, which was going to reduce the expenditure, had increased the expenditure during the 15 months it had been in power by £741,000. T hat was the heaviest increase, with one exception, in the history of New Zealand. He had come to the conclusion that we were spending far too much on defence. Ihe invasion of New Zealand was an unthinkable proposition, and yet within two years of its establishment we were spending half a million on a scheme of land forces. That was too much. What we wanted was a small land force and some system of training in rifle shooting, but we must depend on our'principal defence from the forts at our leading ports and some system of naval defence that would protect our coasts. He commented on the rapid growth of insanity in proportion to our population, and suggested that a commission he set up to consider the whole question of our treatment of the insane, which he believed was more or less barbaric. He protested against the introduction of more immigrants into the dominion. The population was increasing fast enough by natural process, and as loiif as he was in the House he would raise his voice against the introduction of people for -whom no land was available. Mr Wilkinson moved the adjournment of the debate, and the House rose at 11.40 p.m.