THE WEEK IN PARLIAMENT.

Otago Witness, Issue 3831, 16 August 1927, Page 28

THE WEEK IN PARLIAMENT.

HOUSE OF REPRESENTATIVES.

WELLINGTON. August 9. The House met at 2.30 p.m. DEBATE ON THE BUDGET.

At 2.35 the debate on the Budget was commenced by Mr T. K. Sidey, who, in replying to the Minister of Justice (Mr F. J. Rolleston), who spoke on Friday night, said the Minister, in referring to borrowing, had avoided the main point upon which the Reform Party was open to criticism, and that was it had attained office on a no-borrowing policy, whereas as soon as it got into power, and even before the war, it had borrowed at a rate far greater than its predecessors. To-day it seemed to be surprised at its own moderation in having borrowed only £7,000,000 last year. 'The Minister of Finance (Mr W. Downie Stewart) was credited, with a commendably accurate forecast of the financial position, but he had a surplus of £587.000, to which one was entitled to add £41,000, the amount by which the outstanding liabilities had been reduced at the end of the year, ana If to that were added not the full amount of interest entitled to be received from the Public Debt Redemption Fund, but the amount the Minister had budgeted to receive from that fund, and also by way of recouping from the Discharged Soldiers’ Settlement Account, his surplus would have been over £1,100,000. There ought not to be the same difficulty in forecasting interest payments as there was regarding some other items' of the Budget. The Minister had explained that the increased Customs receipts were due to the industrial disturbance in England. He hoped the Minister, in reply, would show how he had arrived at that conclusion, because from an examination of the goods imported in 1926, it appeared as if such an explanation was overstated. For some years the proportion of our importations from the United Kingdom had been On the decline. On the other hand, increased importations from the United States were of a class that probably would not in any case have been imported from Great Britain—motor spirit, motor cars timber, electrical machinery, metal manufactures, and dried fruits _ constituted the chief classes of goods in which the imports had increased, amounting to not far short of £lOO.OOO. The Minister was taking his cue from the Old Country in the matter of debt redemption, but conditions there were very _ different from those here. Great Britain was a creditor country while we were a debtor country, requiring to borrow largely from overseas for developmental purposes. We were already sending enough money out of the country under our new debt reduction and funded debu schemes, especially during a period . ad X® rso trade balance. He admitted that the object of the debt repayment senemes for a borrowing country was to maintain its credit, but our credit was just as high under the old scheme when sinking funds were available for farmers and workers’ loans for which the Minister could not how find sufficient funds. Would the Minister say what vas deadweight debt and what difference there was between loans, for roads and bridges or education buildings and war loans so far as the Consolidated Fund was concerned, which had to find the whole of the interest? Whether it paid to redeem such loans or not depended not upon their original purpose. but upon the terms upon which they were redeemed if before maturity, anil upon the rate at which we were able to borrow and the rate that could be earned in this country. Through o r payment of .moneys by the utilisation of surpluses to redeem loans the Government was placing an undue burden on the taxpayers of today. It was suggested that this was done to prevent increased taxation in the future, but if the redemption of loans was for the purpose of increasing the revenue at the disposal of the Government it was open to question whether that method of obtaining increased funds provided as wholesome a check on Government expenditure and extravagance as the necessity to impose additional taxation would. This did not apply to payments under the public debt reduction scheme or the funded debt. Referring .o the percentage of indirect taxation, Mr Sidey said that an unfair comparison had been made by the Government at the. last election, anil the subject <>f the balance of trade had also figured prominently in the election speeches of the Prime Minister. In so far as the balance of trade depended upon export prices it was beyond this country’s control, but the Government could not have it both ways. Having claimed the credit for the favourable trade balance, it could not complain if the blame were attributed to it for the adverse balance. The most2 disappointing part of the Budget was that under the heading of taxation. During the past seven years the Government had repeatedly acknowledged the necessity for a more equitable adjustment. It was idle to say, as the Budget affirmed, that most of the committees’ and commismissions’ recommendations had been adopted. A reduction 'of taxation would have taken place in any case. It required no commission to advise the Government to reduce taxation. Things that had been done and that would not have been done but for the commissions were a mere bagatelle as compared with that which constituted the great purpose for which the commissions were set up—viz., to advise ns to the incidenc of taxation. The commission recommended that income tax should be based on income from all eources, including income from land, and

that data should be obtained for that purpose. The Government had not even troubled to include in its returns a schedule enabling it to estimate what tax would be obtainable by the inclusion to-day oi incomes from land with other incomes. The Government did not have such information in its possession, and was therefore not in a position to judge or estimate v. hat would be the effect of the change recommended by the Taxation Commission. There was probably a good deal of pressure from large company shareholders against change in company taxation. The estimated loss of £1,000,000 did not appear to be so large a sum as to be incapable of satisfactory adjustment. The relief of companies from taxation would give a fillip to industry. It would enable our manufacturers better to compete with importations from countries where such taxation did not obtain. It therefore had a close relationship to the tariff, and in this session, with the tariff under review, the whole question of direct taxation could have been appropriately dealt with. In the failure, to do this one could not resist the conclusion that in the Budget of 1927 the Reform Party had missed a great opportunity. Mr J. A. Young (Minister of Health) said the Budget was a concise, clear, and businesslike document as even the most hostile critics had admitted. Mr Sidey had assumed that in connection with our debt the redemption money was sent out of the country, but this was not so, except for a portion of the Imperia] funded debt equal to about one-third. The loans for roads and bridges which Mr Sidey had mentioned were in a sense reproductive, but that was not the case in connection with our war debt, which we should make every effort to reduce. Dealing with the trade balance, he said that when the Primo Minister spoke in 1925 there was every prospect of good times before the country. It was a good thing to see the leader of the country optimistic, but even leaders could not foresee what was going to happen in the future. As the position then presented itself the optimism shown bv the Government in 1925 was justified, but it was the strikes in Great Britain which could not be foreseen, but which had adversely affected the economic situation. The earning power of the British people was reduced by these strikes, and as a natural consequence their purchasing power was reduced, and consequently lower prices were obtained for our produce. Mr Young justified the Government’s attitnde on company taxation. The maximum income tax had been reduced from 8s 9d to 4s 6d in the £, and the exemptions had been widened, which resulted in those interested in companies being much more satisfied.. Relief had also been given to farmers in the matter of income tax, and for these concessions the Government was entitled to every credit because the people were not now in the position to nay , such large tribute to the State. -Mr Sidey had demanded a. further reduction in taxation, but in face of the increased demand for social services that demand could not be granted. The people could not have increased public facilities and reduced taxation at the same time. It was not true, as Mr Sidey had claimed, that the Reform Party came into power on a non-borrowing policy. What that party did was to protest against extravagant borrowing and extravagant expenditure. On the question of borrowing itself we had to remember that this young country was in need of development, for which we must borrow. There were big works yet to be done and borrowing could not cease yet. It was most encouraging to know that our last loan was well received in Great Britain, and there was no doubt it had been wisely allocated. The speaker then proceeded to deal with hospital finance, explaining that the present hospital revenue was raised on the basis of the capital value of the land in the hospital district. That system originated in the Act of 1885, and there were undoubtedly anomalies in it. but so far there was no proposal to alter it because any other system might very well be as full of anomalies. So far as the maternal deathrate was concerned, it was coming down, but he would not be satisfied till it was down to three per 1000 births. Our general birthrate was not high, but the general deathrate was extremely low. showing New Zealand to be one of the healthiest countries in the world. The Health Department had much of which it had reason to be proud, but success would not cause them to slacken their efforts in building up a healthy race of people. He would very much regret that drastic economy should come into the Public Health Department, because hospitals were needed, and especially was there a great need of expenditure in extending our mental hospitals, about which he regretted the Minister had not said anything at all. The speaker then proceeded to criticise the administration of the Children’s Court, which was not in the best interest of the children. They should not be brought into contact with policemen in uniform. It was quite a mistaken idea that children could even be brought to believe that a policeman was their best friend. . Mr Young also objected to subnormal children growing up in ordinary schools when there were special schools for them. With regard to the balance of trade, he did not regard the position so seriously as somo members did. It ■ was the natural outcome of our borrowing policy. I Mr A. Hamilton (Wallace) congratulated the Government upon the service it had rendered to the fruit industry. The Budget showed that it- had helped it to ' the extent of £82,619, and this subsidy had placed the fruit industry in one of . the most favourable positions of any in.- ; dustry in New Zealand. So far as the Budget went, the criticism had been of ’ the mildest character, showing that the Government had little to fear. It was a ’ straightforward balance sheet of the coun- ' try’s finance, and we had come to the I end of the year with a good deal on which

we should congratulate ourselves. The country’s credit was the highest in the world, and that was something for which the Government deserved to be complimented. for it was not every Government that could maintain so good a position.

Wlren the House resumed at 7.30 p.m. the debate was continued by Mr Hamilton, who deprecated the building of so many houses in the cities because the population, he said, was certain to drift back to the country. Houses in the towns would then be empty and values would fall. There was no country in the world where wealth was so evenly distributed. He believed if we could only eliminate waste and encourage thrift there would be untold blessings in this country. Discussing land values in New Zealand, he said that with £20,000,000 more worth of exports since the war the farmer was getting less. This was what reduced land values.

An Hon. Member: What Government have you in power ? Mr Hamilton said this was a matter which the Government was going to put right. Until the fanners' got some of the toll which other sections of the community was taking out of their labour the tendency’ . would be for people to seek salaried jobs instead of going into the country and making a job for themselves. The farmer’s position could only be righted by restoring to him his propei share of the national income. This, he held, was the most important work of this session.

Mr H. T. Armstrong (Christchurch East) said that the last speaker had deprecated public expenditure on houses and other public utilities. If the Government wished to bring about disaster the best thing it could do would be to follow the advice of the member for Wallace. He condemned what he called Mr Hamilton’s peculiar economies, and then proceeded to say there was nothing in the Budget to excuse the Government for the state of stagnation at present existing in New Zealand. The Minister showed a surplus, it was true, but that was only a matter of bookkeeping, and there were many competent economists who could show there was a deficit J"** , as large. . Our public indebtedness was increasing, but yet we were told we had made a profit of half a million on the year’s working They would be told they had borrowed for reproductive, purposes, but it was this borrowing that was increasing the burden of taxation upon the people who were doing the useful work of the community, while it was another section of the community altogether which was getting the benefit of these so-called reproductive works. Dealing with education, Mr Armstrong commended the work of the Minister, who, he said, had done very well with the money at his disposal. It was not a question whether we were spending too much on education, but a question whether we could afford to spend less. A very small percentage of our young people was obtaining the benefits of secondary education because the economic stress upon the families was so great that children had to go to work almost as soon as they got out of the cradle.

To improve our education system, he advocated the incorporation of wireless into our schools. The country was all right, but the intellectual misfits were controlling the country. Mr J. G. Elliott (Oroua) said it was not the fault of the Government that farmers were in financial difficulties. That was more largely the fault of individuals. The farmers’ troubles arose out of the high costs of farming, the deterioration of lands, and the inadequate and unsatisfactory system of rural finance. To remedy these disadvantages the first and most important thing was large and regular supplies of phosphatie fertilisers. He predicted that before long New Zealand would require annually 400,000 tons of such fertilisers. He was not satisfied we were getting our proper share of phosphates from Nauru Island. Australia seemed to be getting more than her share, and he urged those in charge of New Zealand interests to take the long view in this connection and see that wherever they came from New Zealand had an adequate supply of fertilisers with which the future of our farming was wrapped up. Dealing with rtiral finance, he blamed the moratorium for weakening the lenders’ faith in rural securities, but a far greater factor in bringing about the financial stringency was the orgy of land speculation which followed the high prices obtained for farm produce during the. war. The belief obtained that prices would remain high, and everybody wanted to buy a farm, and did buy a farm. No sooner did the farmer sell his farm at a high price than he bought another at a higher price. The result was that when periods of slump came the farmers found themselves without cash and without credit, and those who could not weather the storm had to go off their farms. Thus, through the operation of the moratorium and a fall in prices, rural securities became unpopular. At present about 10 per cent, of the farmers in the North Island were in a hopeless position, and what was the remedy? That remedy, he maintained, lay entirely with the mortgagees, who should cut their losses and release their stranglehold on the farmer. The Government, however, could render assistance by a system of long-term mortgages. The State Advances Office was doing good work, but was short of capital, and he considered the Government should seize every opportunity to raise money for use by this department. The department should also be authorised to accept money on deposit.at short call up to £5,000,000 op £6,000.000. This support of the State Advances Office would assist in keepiim down the rate of interest to farmers to a minimum. Private financial institutions should be induced to adopt lending on the amortisation principle, and that inducement might be in the direction of

concessions in taxation on incomes derived from these loans. Besides these things there were other attributes necessary to the prosperity of New Zealand. These were the attributes which characterised the pioneers of this country—hard work, economy, goodwill and co-operation. The farmers -were hard-working, but they were wondering whether they had the goodwill mid co-operation of capital and labour, lhe farmer was appealing to these two factors and was wondering whether this appeal would be in vain.

, On the motion of Mr F. Waite (Clutha), the debate was adjourned, and the House rose at 10.10 n.m. ELLINGTON, August 10. The House met at 2.30 p.m. INCREASE IN PRICE OF COAL. the transacting of formal business Mr J. A. Young (Minister of Health), on behalf of Mr A. D. M'Leod (Minister of Industries and Commerce) made a Ministerial statement on tlie subject of the recent increase in the wholesale and retail prices of coal. In the course of his statement, the Minister said: “All the West Coast mining companies, including the Westport Coal Company, have raised the prices of screened coal by 2s per ton. An inquiry reveals the following as some of the reasons for the increases:—The installation of and the cost of working stone-dusting plant, the increased stringency of the regulations applying to the use of explosives, and the increased rates for accident insurance. An inspection of the accounts of one leading coal company shows that the costs have advanced considerably since 1925. A 2s increase in the wholesale prices has been made in respect of screened coal only, which constitutes approximately 20 per cent, of the total output of the mine. POTATO STATISTICS.

Mr R. F. Bollard (Minister of Internal Affairs) also made a statement on the subject of potato statistics. He said that early inquiries made by the Statistical Department proved that farmers were over-optimistic as to crop results; and that their estimates had not been borne out by actual results, especially in Canterbury, Otago, and Southland, where the weather conditions considerably reduced the yields anticipated. It had therefore been decided that so far as future -years were concerned interim estimates for potato yields would not be publisl ’ but every endeavour would be made to complete the verification collectioh in time to include in the interim returns for agricultural production the verified results for potato yields. It was intended also to obtain in the verification collection particulars as to the yield of table potatoes separately for inclusion in the statistics. DEBATE ON THE BUDGET.

The debate on the Budget w s then resumed by Mr F. Waite (Clutha), who chided the Labour Party with its new- - found love for the soldier . ettlers, which showed a sudden change of heart. What had been the attitude of the official Labour Party when New Zealand soldiers were hanging on to Chunuk BahrThe speaker said the Labour Party .vas like the Mahommcdans, who turned their faces to Mecca when praying. The Labour Party, which used to turn its face to Moscow, now turned it to Geneva. Mr Waite declared that the difficulties NewZealand was experiencing, to-day were common to other’ countries. The Labour Party must know that the Government had no control over the economic fac ers. He repudiated the idea that factory methods could be applied to farming. There was a great cry from the Labour benches continually for more expenditure, but then, said Mr Waite, the Labour members turned round and asked for economy. Economy must not be practised in ft" and starts, but uniformly. No Government could be blamed for the economic factors operating to-day, because they were due to after-war conditions. This country could not go back to the days of 1903 when the first motor cars were imported. The acreage of oats and chaff was steadily diminishing, and the speaker quoted figures to prove what he was saying. Instead of growing oats a man nowadays, said Mr Waite, looked for a job in a motor garage or for some 'her position. The whole trend of the arbitration legislation required to be .carefully looked'into. The. speaker went on to draw attention to the growth of the t:-m--payment system in this country, and said its whole trend should be examined when it was applied to such expensive luxuries as gramophones. Regarding Mr 11. E. Holland's advocacy of a State Bank. Mr Waite said it had been stated that if the Russian State Bank could have printed bread and butter in the same way as it printed rouble notes there would have been no poverty in Russia. Mr D. G. Sullivan (Avon) advocated the establishment of a State Bank, and regretted that the State Fire Insurance Department was not now- rendering the same useful service to the people it formerly did, because it had to -me extent come under the influence of privatelyowned companies. Dealing with pensions, the speaker said that ..ears ago the Minister had promised to introduce an invalid pension, but so far nothing had materialised. An Hon. Member : He is still exploring. Mr Sullivan: It is time he discovered something. Continuing, Mr Sullivan said a readjustment of income tax would enable the Minister to carry out his longdelayed promise. The old age pensions should be increased to 25s per week, and we should have pensions for the blind and a larger family allowance. 'Vliile the Minister of Finance was boasting of a surplus there were other Ministers who wore asking for money to meet cases of crying necessity which they could not

obtain. The Budget was no doubt a business-like document, but he asked thy Minister to consider his suggestion to increase income tax in order that fuller pensions might be provided. Mr J. A. Nash (Palmerston North)' said that one disappointing feature of tho Budget was the absence of any proposals to reduce taxation. He congratulated the Government on the success of its last loan, and he thought that the Government should continue to borrow abroad because the promotion of local loans induced investors to put money into Government securities rather than to lend it to . farmers. For that they could scarcely be blamed, and unless the rural credit debentures had a State • guarantee he did not believe that the scheme would be a success. He urged greater activity on the part of the State Adv :os Office, particularly in the matter of building houses which were wanted all over the country. Farmers wanted cheap fertilisers, which were becoming yearly of greater necessity. The matter was of such vital importance to farmers that he hoped the Government would without delay take some steps to provide farmers with cheaper fertilisers from Nauru Island. Discussing the administration of the Dairy Control Board, he said it was understood its expenditure exceeded the income derived from the levy made upon factories, in addition to which there was the complete failure of the board’s policy and a most disastrous season for farmers. He now suggested this board should be merged with the Meat Board. The Minister had replied t' this was a matter for the board, but as ’’ e Government had two representatives on tho board it was surely also a matter for the Government. There was no need for two boards doing practically the same thing, and doing the work which could be done quite as well by three men. So long as the board remained in existence there was a danger it might renew its insane policy of price fixation D was also understood that the board ad a largo sum invested, while at the same time many factories were having a particularly hard time. He did not think the board should have the right to go on collecting the levy while it had large sums of money hoarded up.

Sir Joseph Ward said he proposed to criticise the Budget, but did not proposo in any way to reflect upon any member oi the Government. He then proceeded to detail the steps which he took while Minister of Finance to set up sinking funds for the elimination of public loans, and then declared that by his Budget the present. Minister of Finance had swept away the whole effect of these precautions. In doing this it was claimed we were folloing the practice now obtaining in Great Britain. This he challenged, claiming that the Prime Minister of Australia had recently resolved that every Australian loan must have a sinking fund, while a quotation was made from the speech of Mr Winston Churchill to show that he was in his British Budget making provision for sinking funds. America also recently insisted upon a sinking fund being attached to the Australian loan raised last year in that country. Everywhere the system of sinking fv.nds was being adopted, and sooner or later our Government would be compelled to go back to that system. With reference to the readjustment of income tax some .e--adjustment might be necessary, but bo warned the Minister against going too far for there were many big companies and banks, the larger pronortion of whoso shareholders were “small” people depending upon dividends for their living. Ho did not find fault with the Budget but how could the Minister expect to reduce taxation when la roe sums had to be found out of the Consolidated revenue to pay off loans. This was making the present generation bear the whole burden of theso loans instead of leaving a portion to posterity, for whom we were preserving the country. He did not know who wag responsible for altering the system of sinking funds.

Mr W. Noswm thv: I am. Sir Joseph Ward : Bv the Lord Harry, T thought so.

Mr Nosworthy: Wo are following the same system as Great Britain for the redemption of tho public debt. Sir Joseph Ward: T have read Mr Churchill’s statement that he had naid £16.000.000 into the new sinking fund, and to that svstom we should have to return. Continuing. Sir Josenh Ward said he did not believe-the people of New Zealand would have accented railway administration bv commissioner’ rather than bv a Railway Board, but <ho fact was that thev were discussing the finances of *h<» country. .and C'-we was not a single member of (Be Hn'-ro who had tho least idea of what the railway finance was. The Australian railways were nnd°r commissioners. end tlm Australian Parliaments had all infoymat’ "n lie was asking f'r ”nd whydi tho Rouse should have. Coming to tl'o war loans, he said 'hist country had done n= oilm- countries had •tone, raised a portion of its meme” at 4A per co”t. free of income tax. This was tho cheapest move” over found for war purposes, and vet the Minister was taking credit for having bought Lack so much of this cheap money. It was necessary tn make this connection to raise tho amount necessary, and it could not havft been done in anv other wav. Therefore. he saw no reason whv the Minister should parade the fact lie was buying bnclt the cheapest money ever raised. Sie Tnennt criticised the funding of £27.000.000 tn tho British Government, which was raised for war purposes Ho hod mar 1 " good arrangements with tho British Government, and ho had never been able tn"frod out whv those arrangements wore changed. Whv did the Budget not toll the House the effect of 4, 'o increase- the motor tax last rear. How numb d’d British motor cars benefitby the alteration made? That was vthat they had a right to know.

Mr Downie StewarFf That information can be given when the tariff c6mes down. Continuing, Sir Joseph Ward said tfiey could consider the matter then, but they must take the broad view and endeavour to frame a tariff so as to give every assistance to British industries. He congratulated the Prime Minister upon the work he had done at the Imperial Conference, where the status of the dominions was definitely recognised as large, and in the securing of which the Prime Minister took a prominent part. Continuing his speech after the House resumed at 7.30 p.m., Sir Joseph Ward criticised the policy of subsidising nonpaying railways. If they did this with one department why not with others? If it wore right in one case it must be right in all- Why should railways be expected to earn a high rate of interest? This was the most valuable department in the Dominion for promoting the welfare of the country. Perhaps 50 per cent, of the farmers were barely paying their way, and what could help them better than cheap transport? The railways should not be expected to earn more than 31 per cent., and any surplus should be given back to the users in the shape of concessions. He did not believe in price-fixing in New Zealand butter. His view was -that we should not send our butter Home to be sold, but they should compel Tooley street buyers to come out here and compete for our produce—not in England, but in New Zealand. They must have it, and they would compete for it. After advocating the closer settlement of land as a means of promoting production, he said financially we were £1,500,000 worse off at the end of this year than we were last year, and this deficiency would probably be made up by borrowing or by the use of treasury bills, but he did not think we could get on with less money in the aggregate than we had last year. Regarding the Slate bank, he said the mistake

made was that we did not take over the Bank of New Zealand. If we ever did this or had a.State bank of a’ • kind, we must keep it clear of politics, and there should be no representative of the Government on the directorate. The business should be conducted in an 'entirely business way. . We already owned about onethird of the Bank of New Zealand, and there was now only one. way in which to establish a State bank in this country, and that was to buy that bank out. This was a big thing to do, but it was the only thing to do, because we could not have two State banks in this country at the same time. He believed the Government should establish rural banks if it did this in the right way. Th? only way in which we could best help our settlers was a general recasting of land values, and we should have a board set up to do this. He did not believe in the State interfering in transactions between mortgagor and mortgagee, and he hoped no one would act on the principle that the State would come to his rescue. What was wanted was a general rearrangement of valuations. He did not think we should spend so much money on public buildings while backblock facilities were so meagre. He believed we would have to bear our share of the cost of the Singapore Naval Base, which was essential to an Empire navy.

Mr O. J. Hawken (Minister of Agriculture) said it was incorrect to say that our sinking fund system was different t-o that of Australia. It was copied from the British system, and was generally conceded to be superior to the old system. It enabled us to pay off our debts at any suitable date, and though Sir Joseph Ward had complained that the sums paid off were too large, it was the opinion of tlie Government that the war debts should be wiped out as scon as possible. Tim question of buying back tax free debentures was a much-da’i.-itcd one. If it paid to do it, it was the rigid. thing to do. because as a matter of general policy it. was unwise to permit avyoTm to go tax free who should pay taxes. He defended the absence of the railway statement because it was not humanly possible to produce it in the time. Sir Joseph Ward’s demand for particulars of motor taxation was quite ill-timed, since that matter would come prominently before the House when the tariff was h.?ii:g revised. Railway subsidies , were an incentive to the department to make good, and the same system might very well be adopted so fa>* as- other departments were concerned. Subsidies were legitimate assistance tv the railways to cop<> with rr.r4:,r competition without unfahly lowering freights. So far as dairy control was concerned, he said the Government was always cf the opinion that the board might not be able to make much difference to the prices of butter and cheese, but he- did not believe the results of the board's attempt to do so had been nearly so disastrous as waa generally supposed. The fall in prices of New Zealand produce was due to other circumstances altogether, and he doubted if the board was responsible for any of the loss at all. Jle favoured a dual market for both wool and dairy produce, as it gave the producers two" chances. If -they did not get what they expected, they could ship their produce Home. So far as land valuations were concerned, he did not think there had been much loss on first mortgages on old settled lands. The losses had occurred on the newer lands, the qualities of which were not known. These had deteriorated because the holders did not.always understand how to work them. The Government was adopting a bold policy in connection with these lands to enable the settlers to hold on, but he was distinctly of the opinion that much of this land should go back into forest. He defended the public building programme of £BOO,OOO. Of this sum £550,000 was for schools and school houses, every one of K which was wanted. Complaint had been made that soldier settlers had been harshly treated. He denied this. He Inew a good deal about individual cases.

and he could safely say that if the State had erred at all it had erred on the side of leniency. Out of 11,000 soldiers' farms only 428 were now unoccupied. The work of revaluing these farms was now practically complete so that the writings off had come to an end, and the losses were now ascertained. The Government was doing its utmost to put the timber industry on a sound basis. A full report of what was being done would be presented to the House when the tariff revision came before it. It would be interesting to see how the Labour Party would regard the new tariff. It had been wooing the farmers of late, but he did not think the farmers would stand for high protection. It was interesting to note how the people were spending money on luxuries. In many cases motor cars were luxuries, and the chief cause of the present depression was over-importation, for which the Government was not in any way responsible. The criticism offered during the debate showed that, and that upon the individual and not upon the Government the responsibility for the depression rested.

Mr M. J. Savage (Auckland West) complained that in 15 years the public debt had been increased by £19,257,303, and the interest charges by about £4,000,000 annually, and yet there seemed to be nothing to show for it. The Advances to Settlers’ Department had no money, and the only tangible result was a crop of bankruptcies, of which there were 814 for the past year, in addition to which there were thousands of unemployed. Continuing after the supper adjournment, Mr Savage said that if ever there was a time when self-reliance was needed that time was now.

Mr H. G. Dickie (Patea) spoke in general approval of the administration and the Budget proposals of the Government. The adjournment of the debate was moved by Mr W. E. Parry (Auckland Central), and the House rose at 11.10 p.m. WELLINGTON, August 11. The House met at 2.30 p.m. KAURI GUM INDUSTRY. On behalf of the Minister of Lands (Mr A. I). M’Leodl. Mr O. J. Hawken (Minister of Agriculture) cave notice of his intention to introduce the Kauri Gum Industry Amendment Bill. SOUTH ISLAND SHIPPING FA CUTTIES.

On the motion of the Prime Minister, on behalf cf Mr A. D. M'Leod, a select committee was set up consisting of six members, with power to confer and sit together with any similar committee appointed by the Legislative Council, to inquire into the shipping facilities at present existing between the South Islam! ports and Australia, and to report as to the means of improving matters, the committee to- have power to call for persons and papers and to agree to a joint or separate report, three to be a ouorum, and the committee to consist of Messrs Howard (Christchurch South), E. P. Lee (Oaniaru). J. A. Nash (Palmerston North), T. K. Sidey (Dunedin), Sir Joseph Ward (Invercargill), J. M’C. Dickson (Port Chalmers), Mr J. Savage (Auckland West), and the mover. INDUSTRIES AND COMMERCE.

A select committee was also appointed consisting of 11 members to deal with all matters in connection with industries and commerce, with power to call for persons, papers, and records, three to be a quorum, the committee to consist of Messrs H. Atmore (Nelson). F. N. Bartram (Grey Lynn), T. Forsyth (Wellington East), W. J. Girling (Wairau), H. Holland (Christchurch North), C. E. MacMillan (Tauranga), T. K. Sidey (Dunedin South), D. G. Sullivan (Avon). F. Waite (Clutha), A. Harris (Waitemata), and the mover. DEBATE ON THE BUDGET.

Mr W. E. Parry (Auckland Central), resuming the debate on the Budget, accused the Government of departing from its traditional policy in connection with loans. Money was tight, and it was impossible to extract funds from the Government to build houses, though the House was prepared to back un the Government in that connection: yet the Government was able to lend the Broadcasting Company £15,000 on second mortgage, and that for no better reason than that some of the company’s directors were strong supporters of the Government. He had always maintained that the Budget should be a plain, straightforward balance sheet of the country’s position. It should not only tell us "what our national production was, but it should also tell us how our national income was distributed. As matters stood all branches of the public service were complaining that they were not receiving a fair share of the national income, while there was a disgruntled industrial and commercial community for the same reason. No member of the House could say whether these complaints were or were not justified, because the necessarv information was not given to them. The speaker referred to the various difficulties of the country at the present time, and stressed their seriousness. He said they were called upon by the Government to be content and wait for a revival of trade for the restoration of prosperity. He asked for some real reasoning from the Government benches in respect to the problems he had referred to, and he suggested the setting up of a committee to consider the serious nroblems the country was faced with. If Parliament then considered the recommendations of the committee the Government would be doing something of real service to the Dominion. The late Prime Minister had always said they were turning the corner, and Mr Coates was saying the same thing. Any man who attempted to deal with the situation as he saw it was called a pessimist and a Jeremiah. The present time was the time for every member to be operr and frank about the. cause of the country’s difficulties. The only answer the Prime Minister gave was that they , were turning the corner.

Mr E. Walter (Stratford) said that anyone who thought New Zealand was going to get through its present trouble without considerable difficulty was very optimistic indeed. They would have to get back to where the pioneers stood. If they spent £9,000,000 more than they received then they could not expect any other result than that with which they were faced to-day. The Budget had been called a good business Budget, and he thought they could not look for any greater compliment. The Minister of Finance had to pick his way carefully, and be did not think anyone could accuse the Minister of “rushing the fences.” He did not believe in a policy of immigration. It would be better if the immigrants paid their own passages, because they then would show more independence. When they came out under the auspices of the Government they seemed to think the Government should nurse them all the time. That was not a good spirit. It was not a British spirit which w e could encourage. He had been amongst the soldier settlers a good deal of late, and he found they were rapidlv becoming more and more satisfied. They all recognised the help which the Minister of Lands had given them. Mr D. Buddo (Kaiapoi) admitted that the outlook was not promising, and there was much unemployment, but he did not think the pessimism of some of the members was justified. The farmer had sufficient troubles to face without making him responsible for the alleged non-pro-duction. As a matter of fact, there had been a steady increase in production in the matter of wool and meat, but falling prices had brought about the present trouble. While exports had decreased imports had increased enormously, and he suggested that a committee be set up to review the whole position. The country had been led into a greater public works expenditure than was warranted, and this expenditure might have been employed in helping the primary producers. The advent" of the motor had'considerably curtailed the usefulness of the railways, and further railway construction could be deferred for a time, at least, until it was known how far petrol-driven machines would affect the transport question. What the House should have was a Public Works Committee, which could do valuable work in revising the proposed expenditure in this direction. He hoped some settlement scheme would be put into operation under which suitable land could be acquired at reasonable cost and offered to intending settlers—the small men for preference, on such terms as will enable them to farm with some prospect ot success.

Mr A. Samuel (Ohinemuti) devoted his speech to a justification of the attitude of the Minister of Internal Affairs (Mr R. F. Bollard) in granting a racing permit to the Waikato Hunt Club for Labour Day next. He contended that hunt chibs should have representation on the New Zealand Racing Conference. The Waikato Hunt Club’s date on Labour Day was the only one that the conference had attempted to interfere with. Mr Samuel concluded with the hope that the Racing Conference would bow to the decision of the Minister, and treat the Waikato Hunt Club in a spirit of fairness and justice. Mr G. W. Forbes (Leader of the Nationalist Party) regretted the absence from the Financial Statement of reference to many matters requiring to be dealt with. Farmers" finance, and assistance to secondary industries, and also the licensing question were all left just as they had been for years, and the Government’s election promises remained largely unfulfilled. The Government certainly had borrowed skilfully, and had spent more money than any other Government that New Zealand had ever had. It had also handled the land purchase question in a manner that many people appreciated. The Budget was supposed to give some indications of the Governments intention, but he thought it would disappoint anyone searching its pages for information on this point. The Minister had stressed the need for economy and a committee was endeavouring to curtail departmental expenditure. Mr Forbes said that past attempts of this kind had been fruitless. Hie taxpayer, however, said Mr Forbes, felt there was a good deal of waste in the departmental administration, and would like to see an independent committee set up to exercise a healthy curbing effect upon the expenditure, which was to such an extent that it threatened to become a serious drain upon the country’s resources. Customs taxation had produced £8,395,000 last year, which meant that a very heavy burden was imposed on the people's earnings, and this taxation ought to be reduced at the earliest possible date. Hie Budget was called an economy Budget, yet the expenditure had shown an increase of £755,000. In considering the expenditure in railway extensions it was to-day necessary to study closely the effect of motor transport, which had changed the transportation problems completely from what they were before the motor car came into use. Mr Forbes commended the special boards or parliamentary committees which in New South Wales investigated the advisability of any proposal to undertake railway or other public works. Here in New Zealand the House was asked to vote blindly on such proposals. Nearly half a million was allocated to cover losses on certain branch railways. This sort of thing might be averted in future if the prospects of the lines were closely examined. In view of the huge public debt economy was urgently needed. Many neople felt that too much money was being spent on public works in view of the country’s position. Company taxation was pressing heavily on the. industries, and a reduction was anxiously awaited by the people, who looked for something to help to lessen the i cost of living. The Minister, however,

claimed that no alteration could be made at present as it would make it difficult to balance the Budget. Mr Forbes urged that company taxation should be. revised. Referring to control boards for produce, Mr Forbes said that the farmers , had believed the boards would handle their produce to the best advantage, but he believed a mistake had been made in introducing compulsion, the effect of which on dairy produce had certainly been unfortunate. The Rural Credits scheme did not seem to him to be any improvement on the existing system of advances to settlers. The farmers would be more impressed with the promise of an intermediate credit bill if a committee were set up to go into the subject so that its merits and Hie promise of assistance to the struggling men on the land could be seen. Unless this assistance were forthcoming the productivity of the land would be affected very seriously. At the same time the banking practice should be reviewed by a committee which should be set up at once, as its investigations could only be carried out by the expenditure of considerable time. Mr Forbes criticised the action of the banks in advancing the rate of interest in spite of the fact that a profitable year had been experienced, and declared that the Government should have done something to prevent the interest charges being increased. Mr R. A. Wright (Minister of Education) said the Budget debate was halfway through, and it had been a decidedly weak discussion, the weakness being dueto the fact that there was no fault to find with it. It had no loose ends or openings to attack. Mr Forbes had said the farmers were looking for relief. Well, all sections were looking for help, but no Government in the world could give the amount of relief that was being asked for on all hands. Mr Wright said that Mr Forbes had referred in a sarcastic manner to the Government’s land purchases for soldiers, implying that it had squandered money to do so, bi.t the Government of the time had to buy land even at high prices because the people were insisting upon the provision of land for soldiers. Would members have had the Government confiscate the land? He did not think they would. The Civil Service had been quoted as being in need of reorganisation to reduce the cost. That had already been done, however, and the service was being carried on economically. The Customs revenue had been cited, but there was no suggestion put forward as to what items might be reduced. The Customs revenue at present was mostly derived from articles of luxury. The publie Works expenditure, so long as it was on works of a useful character, surely should not be condemned. The expenditure generally could not be reduced, but he would like to see borrowing lessened. The Education vote could not be cut down, as each year about 22.000 fresh children were coming forward, requiring about 30 new schools. As to taxation, it seemed heavy, but compared with other countries it was not heavy- The Minister quoted figures of income tax in New Zealand and the Australian States and Great Britain, showing that the Dominion was very much less than any of them. Touching on control boards. Mr Wright said that legislation establishing them had been introduced at the instance of the people concerned in the several industries, and a number of members of the House had approved of this legislation. The Prime Minister had stated that the Dominion was turning the corner, and exception had been taken to this statement because some people thought this should have been i done already. The fact simply was that

after the loss of £70,000,000 expenditure on the war it was a long corner to turn, but we were getting round it all right. Mr R. M’Keen (Wellington South) argued that at present the interest taxation in New Zealand was relatively higher than direct taxation, with the result that the workers were paying disproportionately to other classes. A revision of tlie tariff would intensify this position, because the policy of the Government was to derive revenue by a process of indirect taxation. A committee of the House could have made a more equitable revision of the tariff than the Royal Commission employed by the Government and more publicly. The adjournment of the debate was moved by Mr E. D. M’Lennan (Franklin), and the House rose at 11.43 p.m.

WELLINGTON, August 12. The House met at 2.30 p..ni TRADE WITH SOUTH AFRICA.

Replying to Sir John Luke (Wellington North), the Minister of Finance said that negotiations were in progress with the Government of South Africa with a view to making a trade agreement between the two countries more equitable so far as New Zealand was concerned. INDUSTRIES AND COMMERCE.

On the motion of the Prime Minister the name of Mr J. M‘Combs (Lyttelton) was added to the Industries and Commerce Committee in place of that of Mr I). G. Sullivan (Avon), who explained that he was unable to act. DEBATE ON THE BUDGET.

The debate on the Budget was resumed by Mr E. D. M’Lennan (Franklin), who thought the Budget a most satisfactory statement of the Dominion’s position. Ho did not agree with Mr R- Al‘Keen (Wellington South) that indirect taxation was pressing unfairly’ on the workers. The figures disclosed in the Budget showed that the burden of taxation was fairlydistributed. The increase in the public debt had been criticised, but much of this debt was revenue-producing and was no burden at all upon the taxpayer’s. Similarly, much of the public works expenditure would become a national asset, for no less than £5,547,660 would become reproductive. Our importations had brought about much cf our financial depression, resulting in unemployment. He congratulated private citizens and the Government on the steps taken to mitigate unemployment, which was a'tragedy in a country such as ours. Unlimited assistance, however, could not be given in the shape of relief works, as otherwise there would be a tendency to create a class of profesisorial unemployed, who would be continuously looking to the State for relief. He combated the idea that the Government had any desire to reduce the standard rate of wages by means of relief works. The real remedy for unemployment was closer settlement of the land and increased production. To achieve this end farm life must be made more attractive by giving the settler means of communication and other facilities. Some settlers in the north who had been without roads for many years now had a right to look to the Government to provide them with more cheerful conditions. He congratulated the Agricultural Department on the accuracy of its produce grading, and concluded by asking the Government to provide the farmers with an ample supply of cheap fertilisers.

Mr T. M. Wilford (Hutt) said he Proposed to discuss the defence of the Empire in relation to the Singapore naval base. He had the good fortune in 1923 of visiting the East, and the only peopla there he found opposed to Britain's pro-

posal were the rubber barons and the tin kings of Malaya. The opposition of these people was due to a cause which would be news to most. Because the British Government had decided that the base was to be constructed at trade union rates of pay, this had caused alarm amongst those people who were rich bv means of cheap Chinese labour. Those States near the base wc.nted it and had contributed -liberally towards it. There was but one opinion in the East, and that was that Singapore must be controlled by Britain. The Singapore base was an insurance. It might Ido asked, “Insurance against whom?” It was insurance, not against any particular peison or thing, but against anything that might happen. Opposition to the Singapore base was fii'st started by Colonel Repington in 1921, who said it would cost £10.000,000 to dredge the western entrance. The answer to that was that there ?tas. no western entrance, which was blocked by a causeway, built for that purpose. It' had been said the base was being laid down solelv for the benefit of the rubber barons and the tin kings. They were the only people who had passed the resolution against it. It was not true that Singapore was a pestilential are<i, <incl thcit it was necessary to have a base there because we would shortly have to vacate Hongkong. It was not breaking faith with Japan, because geographically it had no immediate relation to Japan. Further, !v 6 J’ ea( J . of tlle Japanese delegation at the Washington Conference and the Peace Conference at Geneva had said it was Britain’s business, because she had great interests in the Pacific, and was no breach of the "Washington agreement Japan had an equal right to build her Gwn naval bases, and was doing it. It had been said the base at Singapore was bot necessary. It was necessary to keep command of India. If India went out of the Empire, then good-bye to that Empire. The Singapore base was necessary to the mobility. Our ships must have some place on which they could retire in the event of disaster. In 1931 Japan would have 4,000,000 trained military forces, and was moving steadily ahead in all quarters. She was already in Singapore, owning much land and many important points, and Holland had agreed that, in the event of Japan becoming aggressive towards her colonics, Holland would, in consideration of the Singapore naval base, hand over to Britain the island of Sumatra, so that she would control both sides of the strait. Proceeding, he emphasised the. importance of the base to Australia and New Zealand. Our existence depended upon naval defence, and the price we were asked to pay for it was not great for the security offered. He quoted many high opinions to show that Singapore was strategically the chosen spot. A fleet stationed there .night not prevent Japanese raiders descending upon kvstralia, but those raiders would never get back to Japan. It. was impossible to say what secret negotiations were going on between Ivtiswia and Japan. If Japan ever captured Singapore it would be many weeks before we could receive any assistance from any British force. It had been Baid that Japan placed her cards on the table. She did nothing of the kind, as witness her presentation of her 21 points to China, six of which were secret and were never published. America found out these secret clauses and exposed them. China was prevailed upon not to agree to tli cm, hence all the trouble between Japan and America. Japan was steadily moving her way down the Pacific, and her Strength was in the complete union of her fcavy, army, and people. Our cruiser Strength was below that of Japan, especially in the rate of speed, and if we were going to have a base at Singapore we • must do it thoroughly. It must be armed With the largest guns. It was the story Wf the battles of Coronel and tht Falkland Islands over again, in both of which teases the ships with the heaviest guns triumphed. In conclusion, he wish' ' to teay we should never look in Empire or Empire defence as party

matters. Although times bad we must not starve naval defence. Men who studied these big problems were better able to advise, and we should take heir advice rather than that of pacifists who would have us unprepared for war. If Britain in 1914 had been able to put a force of 500,000 men in the field there would have been no retreat from Mons, and the Great War would have ended there and then. We should be prepared to pay our share gladly, as, apart from the question of insurance, it was a duty which none of us should shirk. Mr A. Harris (Waitemata) said that one of the outstanding features of the Budget was the tendency to economise in public expenditure, but what we wanted more than anything to dispel the depression was a bold reduetion in taxation. It would have been a master stroke at this juncture. The Government was pledged to do this, but two sessions had passed, and there was no sign of it yet. Nor did we hope for any reduction in taxation as a result of the revision of the tariff, because he did not believe that was the purpose of the revision. - He proceeded to declare that there was often confusion in the use of the terms “primary” and “secondary” industries. One was as important as the other. The despised secondary industries were as necessary to produce much of the wealth, which the evolution of time must of necessity transfer from the country to the towns.

Mr J. A. I»ee, referring to Mr Wilford's remarks on Singapore, said the member for Hutt seemed to have forgotten that prominent men in Great Britain were opposed to the Singapore base. Mr Lee said that Mr Waite (Clutha) had accused the Labour Party of trying to prevent men reaching Chanak Bair to reinforce the troops there. It was a pity that the Labour Party had not been able to do this, as it would have saved many thousands of British lives- Mr Lee congratulated the Minister on the success of the State socialistic enterprises, as shown. in the Budget, and he hoped thic '-inn of socialism would be extended in the field of insurance. New Zealand for many years had been pursuing a financial “rakes progress.” It was time constitutional government was established. The public debt by 1911 had amounted to £81,000,000. Then a “non-bo wing” Government reached the Treasury benches, and the public debt was now £IG4,vJO,OOO. Mr Lee said the point would be made that there had been a war. That 'was true, and the mistake was that its cost was met by borrowing instead of drawing on the war profits that certain people had made. The sinking fund was described by Mr Lee as merely a form of collaterial security for loans obtained from capitalists abroad. The Reform Party in the 1925 election campaign pron ised a revision of the incidence of taxation c - the relief of people with small incomes, but no attempt had been made yet to keep this promise. Mr Lee said the Minister of Defence in 1924 had criticised the amount of borrowing and the remission of income tax; yet he had since attained Ministerial office, and had not used his influence to induce the Government to carry out his election promises. Stiffer taxation should be imposed on luxuries, such as high-priced motor cars. Referring to wireless, Mr Lee conden nod the Government’s action in giving financial assistance to a privately-owned wireless corporation. There was no reason why a State bank should not produce as good results as private concerns if the staff gave equally efficient service. Mi’ D. Jones (Ellesmere) said that Mr Lee had suggested the country had gone to the bad to the extent of £18,000;000 in two years, 1925 and 1926; that, in fact, wo' had not received any value for that money. He reminded Mr Lee that of the ordinary. public debt all but £20,000,00 was revenue producing. Mr Jones said the Reform Administration was such that New Zealand’s credit abroad was the highest in the world. The Government had done a great deal to assist the farmer. Labour speakers had defined “organising finance in New Zealand” as Government control of all banking and insurance in the country, but Mr M. J. Savage, a member of the Labour Party, had said quite correctly that a State bank could give back only the amount of interest earned. New Zealand banks during the wartime gave the country the cheapest money in the world. Financial difficulties due to the slump which hurt the farmers so much were due to excessive importations by our mercantile cognmunity. The Government should get into touch with importers’ associations at Home and secure data about the amount of goods coming to New Zealand. The publicity of such a procedure would steady the imports into the Dominion. The New Zealand Meat Board had followed the plan of regulating exports with benefit to the meat-producing community. Mr Jones agreed that the I amount of loan expenditure on public works in New Zealand to-day was disquieting in view of the changed condition of the balance of trade, the value of our imports having dropped seriously. Interest and sinking burdens were becoming gravely serious, and the country should be more self-reliant and less dependent upon loans from London. Referring to telephones, Mr Jones considered that users should pay the cost of installation, which would mean a saving of about half a million yearly to the pubic funds. If this system were adopted the provision of telephones could be carried out very much more expeditiously and cheaply. Mr Jones urged that expenditure on various phases of public works could be cut down by at least one-third if done by the contract system of piecework. By this means workers would obtain better wages, the country would get better work, and there would be a chance to bring about some reductions in the cost of living. He believed the agricultural college could

be financed satisfactorily if the Ruakura and Weraroa farms were disposed of and attention concentrated on the agricultural college at Palmerston North. An agricultural instructor should be placed in each county, thus bringing about decentraisation and a great saving in travelling expenses. Research should be given a most prominent place in the work of reorganisation that was contemplated. "Referring to control boards the secret of their success or failure depended upon the efficiency of the management. The Meat Board cost about £20,000 per annum, and since it came into operation the cost of production had been reduced by £1,100,000. The compulsory powers were not necessarily for use, but as authority to enable the board to enforce its purposes. The board's activities resulted in the better handling of goods and shipping. Insurance was now one-half its former level, and the port charges in London had been reduced by a very large sum as a result of the board’s possession of power to erect its own cold stores in London if it thought fit. The values for all good lands in New Zealand were quite sound, but farmers were in need of financial assistance to enable them to bring their holdings into full profit. He believed the rural credits system would prove a great boon to the men on the land.

Mr E. A. Ransom (Pahiatua), referring to telephones, said that Mr Jones’s suggestion that the people should pay for installations was untenable, and would mean that many country people would have to do without the telephone service. The back country settlers already had to pay very heavily for telephonic communication. He agreed with the suggestion that the Weraroa and Ruakura farms should be sold and the proceeds devoted to the agricultural college, but he disagreed with the idea of putting the loss on the sales of land. A great weakness of the present Government’s land settlement policy was the fact that the lands were not good enough for land settlement purposes. Only good land, suitable for intensive farming, should be considered. Good land was still available, and the speaker cited two estates in his own electorate, by absentees, that could be cut up and made available for a number of settlers, who would have a excellent chance of succeeding. The policy of the present Government had been described as borrow, squander, and tax, and certainly it seemed to ham that there had been something very like squandering, and the logical outcome of that was more taxation.

Mr J. Mason (Napier) denied the charge that the Government had done nothing to assist farmers financially, and that the Government had been squandering and over-borrowing. Members of the Opposition should in fairness point out how they would cut down borrowing. Would they curtail the amounts provided for housing or for hydro-electricity? The Labour Party claimed thev would be able to run the railways at a profit, but the experience of Queensland in that direction was rot encouraging. He favoured the expenditure on the Singapore base, and believed it would not be long before the country would turn the corner towards prosperity. Mr J. Horn (Wakatipu) attributed the present agricultural depression to excessive mortgaging, in spite of which farmers had not sufficient capital to carry on, and without that they could not succeed. He advocated the amalgamation of various produce boards, and thought that the Dairy Board should be able to do something for the farmers by the elimination of the middlemen, who were getting too big a. cut out of our butter in London. He strongly urged the Government to give a State guarantee to rural credit bonds, which would be the best service thev could render to the farmers.

The adjournment of the debate was moved by Mr J. Bitchener (Waitaki), and the House rose at 11.45 p.m. till 7.30 p.m. on Tuesday. NOTES FROM PRESS GALLERY. CITY HOUSING. WELLINGTON, August 9. Mr Adam Hamilton (Wallace), speaking during the Budget debate in the House of Representatives to-night, struck a new note in regard to the building of houses in the cities. If they went on with house building in the cities, he said, the trouble would soon be that they would have too many houses, because there must come a time' when the population must drift back to the country, and* then they would have empty houses in the cities, with the result that city values would be depreciated to some extent. He maintained that we should call a halt, although some of their Labour friends might say there would be some people without homes. At present there were not many towns except, perhaps, Wellington and Auckland, in which the building of more houses was necessary. There were plenty of houses in the country, anyway. •st -st THE STANDARD OF LIVING. Mr Adam Hamilton (Wallace) to-night gave the House of Representatives a new text for the solution of the present hard times. “The last word in the economic problem,’’ he said, “is that the standard of living in any country must not .be higher and need not be lower than that experienced by the producers of the national wealth.” He explained that national wealth came from various things, but in New Zealand the national wealth came almost entirely from the land. Therefore, the- standard of living in New Zealand must not be higher and need not be lower than that of our primary producers. SUMMER TIME BILL. Two petitions against the daylight saving legislation were presented to Parliament to-day. One states that Mr Sidey’s Bill would be harmful to- the wives and children of farmers, and it would interfere with household and school duties and the health of countrywomen

and children. The other petition states that the principle is too dangerous to the agricultural and pasto’-al industries to justify it being experimented with at a time like the present when those industries are in the most precarious condition they have experienced for many years. 7? TV 7T NIGHT FISHING. A very largely-signed petition against the abolition of night fishing for trout in the Rotorua district was presented in the House of Representatives to-day. * * * NEW ZEALAND-MADE GOODS. In reference to a question raised in the House a few days ago regarding the use of New Zealand-made goods by Government departments, Mr K. S. Williams (chairman of the Government Stores Control Board) made the following statement :—

“As has been previously stated, it is , the policy of the Stores Control Board to ] purchase stores manufactured in New Zealand, whenever such can be obtained of suitable quality for State, requirements. ■When this condition is fulfilled a generous preference is allowed to Dominion manufacturers who are in competition with overseas manufacturers. The board has just recently completed a number of contracts to the value of approximately £20,000 per annum, the whole of which will go to New Zealand manufacturers. At the present time a much larger number of contracts are being arranged, and in every instance imported goods will have lite amount of Customs duty payable added to their cost when prices are being compared with those for local products. In addition, it is the policy of the board to keep as closely as possible in touch with New Zealand manufacturers, and from time to time representatives of the board confer with representatives of the manufacturers at the various centres. Stores are continually being analysed and tested, and if found to be unsuitable the manufacturer is advised of the reason. Appreciation of the board's policy in this respect has been expressed by several of the principal chambers of commerce and manufacturers’ associations. 9'llo conferences afford an opportunity to manufacturers and traders to explain their difficulties frankly, and the board's readiness to consider suggestions for the improvement of tender schedules and conditions of contract from the suppliers’ point of view has more than once been favourably commented upon.” WELLINGTON August 10. SINGAPORE BASE. Sir Joseph Ward, whose speech in the Budget debate to-day occupied almost an hour and three-quarters, dealt with a great many subjects. He had received with unanimous assent an extension of time, and went on for almost three-quarters of an hour beyond the allotted time. The Bouse listened attentively, for Sir Joseph is still respected by hon. members. In concluding, he said he was satisfied that we in New Zealand should provide our share of the cost of the Singapore base. Even if the Motherland wanted to pay it, it would be cowardly for Us to let her do so. Any addition to the payment on our part would be to protect our own portion of the Empire. We had a most valuable part of the Empire in New Zealand, and we could not afford to have it uninsured. * * * PROPORTIONAL REPRESENTATION. In the House of Representatives to-day Mr T. M. Wilford (Hutt) gave notice to ask the Prime Minister whether, seeing that Mr L. S. Amery (Secretary of State for the Dominions) is visiting New Zealand, he will arrange for him to deliver an address on his arrival here on “proportional representation,” seeing that the i right honourable gentleman is vice-president of the Proportional Representation Society. Mr Wilford road a long list of vice-presi-dents, among them many distinguished men who are the other vice-presidents of the society. * * * RELIGIOUS EXERCISES IN SCHOOLS.

Two further petitions protesting against the passage of the Religious Exercises in Schools Bill were presented to Parliament to-day. One presented by Mr T. M. Wilford contained 65 signatures of Wellington and Hutt Valley residents, while the other presented by Mr J. A. Young on behalf of the State Education Defence League, Auckland, contained 46 signa lures. * * * CALE VEAL. The exportation from the Dominion of young calf veal was referred to this afternoon in the House of Representatives by Mr J. A. Lee (Auckland East) who gave notice to ask the Minister of Agriculture seven questions bearing on the subject. The points on which Mr Lee seeks information are whether the trade has been developed as the result of the representations which the High Commissioner (Sir James Parr) has made to the Imperial authorities on the question, and whether Sir James’s representations in the circumstances were in the best interests of the Dominion. Mr Lee further seeks enlightenment on the points whether any of this veal comes back to New Zealand as part of the ingredients of veal and ham paste, whether the Minister himself would cat the veal, whether Australia prohibits or encourages its export, and whether the Minister thinks the minimum weight allowed with respect to veal for domestic consumption should not be applied to veal for export.

W ■3?’ STATE ADVANCES. Some information concerning the period which applicant's for State Advances will have to wait before their applications are met was sought in the House to-day by Mr V. H. Potter (Roskill), who asked the Minister of Finance Air W. Downie Stewart) whether he would issue a statement at once showing how many applications for loans had been put into the State Advances Office, and how long a period would elapse before the loans were granted. He said this information would be in the interests of applicants for loans and also of members of Parliament who had io deal with correspondence on the subject. Mr Stewart: I shall be very glad to look into the question, but it seems _to me more like a return that is being called for. -

REFORM CAUCUS. A caucus of the Reform Party sat for two and a-half hours this morning. At its conclusion the Prime Minister stated that the only matters discussed were the measures to come before Parliament and other features of the business of the session, on which there was conqdete agreement. LABOUR AND THE SOLDIERS. The solicitude which the Labour Party has recently exhibited concerning the welfare of returned soldiers was made the subject of some biting references in the Budget debate in the House of Representatives this afternoon by Mr F. Waite (C'lutha), who has a distinguished war record. “Those of us who were away are becoming sickened with the interest which the Leader of the Opposition (Mr H. E. Holland) and the member’ for Christchurch East (Mr E. J. Howard) have displayed in the returned soldiers in their Budget speeches,” said Mr Waite. “When your brothers and mine, Mr Speaker, were hanging on by the skin of their teeth to Cliunuk Bahr, what was the Labour Party doing? When a man intimated that he was going away they tried to dissuade him.”

Mr W. E. Parry. (Auckland Central) : Oil, give us something new. Mr Waite: They would have denied us reinforcements.

Mr Parry : Give us something sensible. That is wSrii-out stuff. Mr Waite said that the soldier settlem in Otago were satisfied that they had been given a fair deal by the Government. Enormous reductions had been made in their liabilities. Again, he was certain, and so wore the Returned Soldiers’ Association and the individual men, that the Pensions Board was more sympathetic now than it had ever been. Mr Waite went on at this stage to plead for more gas equipment for the territorial force. “As one who is fit for service and who will go overseas again if need be,” he said, “ I want to protest against being sent away this time equipped with just gas masks. Whatever any group of staid old gentlemen may decide around the conference table, we know that gas will be used in the next war. The other side will use it. and we shall have to do so also. Therefore, we must have men trained in the use of the gas projector: but the Leader of the Opposition would deny New Zealand soldiers what everybody else will use.”

Mr P. Fraser (Wellington Central) : He did not say anything of the sort. He merely asked the Minister of Defence for information. Mr Waite went on to discuss the economic position of the farmers of the world. He denied that the Government was in any way responsible for the situation in which the New Zealand farmers now found themselves. Reverting to defence, he said that the Labour Party was mistaken if it believed that the farmers of the Dominion were not in favour of a defence scheme. ’Die Labour Party had suggested that the money spent on defence would be better spent on education ; but what good would all the degrees and diplomas be.against an armed force. “Whoever else may do

so. the soldiers and farmers will not forget,” added Mr Waite. “They will remember that the Labour Party tried to deny us reinforcements, and that they did not care whether the men overseas lived or died. They are no more entitled to speak on behalf of the returned soldiers than they were in trying to starve and let them down in the last war.”

In the absence of the Leader of the Opposition, Mr Fraser protested against the statement that the Labour Party had sought to deny the Expeditionary Force reinforcements and that it would have starved the men.

At the direction of the Speaker, Mr Waite said he would withdraw anything that he had said which was not in conformity with the rules of the House. The speech was characterised by Mr D. G. Sullivan (Avon) as one of the most bitter and reactionary which he had heard in the House. Not only had it tended to revive old hatreds, but it was full of inaccuracies. The records of the House would show that a group of the Labour members had done everything in their power to improve the position of the returned men since the day when the first lot came back. * * * A STATE BANK. WELLINGTON, August 10. “A mistake this country made was in not taking over the Bank of New Zealand,” said Sir Joseph Ward in the House to-night when discussing the question of the establishment of a State Bank. If , that had been done, he said, N< w Zealand would have had one bank meeting all its requirements. If the Dominion ever had a State Bank he hoped that the Government would not bo directly represented on the board of directors, but that the directorate would be comprised of men who would conduct the operations of the institution on a strict financial basis. Sir Joseph eulogised the operations of the Commonwealth Bank of Australia, and he went on to say that many people in ’New Zealand had an erroneous idea as to the functions of a State bank. There were people who were imbued with the idea that a State bank would issue, paper on its own name and help the small man throughout the country. No bank, State or otherwise, could exist on such a basis. Sir Joseph told the House that when the country saved the Bank of Now Zealand it was impossible to find a body of responsible men on either side of the House would have supported the acquisition of the Bank by the State. He added that he was quite satisfied that New Zealand should have agricultural banks, but he would defer any comments on this phase of the banking situation until he learned the Government's intention on the matter.

WELLINGTON, August 11. CHAMOIS IN NEW ZEALAND. In the House of Representatives to-day jSlr 1. I). Burnett (Temuka) gave notice to ask the Minister in Charge of *the Tourist and Health Resorts Department ■whether, when it is proved to his satisfaction that the chamois, the tliar, and the red deer are destroying the alpine flora in the region of Mount Cook, the most beautiful of its kind in the world, he will issue instructions to the guide rangers at the Hermitage to destroy forthwith these animals that should never have been imported from Europe? Mr Burnett states that the importation of these animals is only another instances of the glaring folly of indiscriminate acclimatisation efforts, all tending to destroy the balance .of Nature. From personal observation in these alpine valleys it is found that the red deer is making a dead drive at some of the most exquisitely beautiful of the alpine trees and shrubs, besides destroying carefully planted exotic forest tree's.

PERTINENT There were some amusing exchanges between the Prime Minister and Mr W. E. Parry (Auckland Central) when the latter was speaking in the Budget debate in the House of Representatives to-day. Mr Parry was seeking to mak-' the point that Great Britain had ceased to justify her title of the “world’s workshop,” anil that she no longer supplied the world's needs in many articles. “In what way?” asked the Prime Minister. “Give us some instances.” Mr Parry: I’ll give you some instances. Mr Coates: Well, go on. What about electrical equipment ? Mr Parry: I'll tell you all about electrical equipment. Mr Coates: And locomotives? Mr Parry: Yes, but 1 am not going *o be put off my speech. Mr Coates: And steamers ai. 1 screws? Mr Parry did not enlighten the House on his news as to which country had eclipsed Great Britain in supplying the world's demand for the articles enumerated, but he went on tn urge that Groat Britain was now fully occupied in supply.ing goods for her own immediate consumption, and that a solution ' some of the Empire’s economic problems would be found in making the Empire one trading unit. From this point he proceeded to comment on the Imperial Conference. “We have given up expecting much from these conferences,” he said. “They have now become advertising agencies for Tory Prime Ministers-”—(Gover-.ment laughter. in which Mr Coates joined heartily.) When the laughter had subsided Mr Coates asked: And would you say *>. < of the leaders of the Irish Free State, and South Africa. Mr Parry: They were all there - ‘•ting each other on the back and seeing which was the best-dressed.— (Laughter.) That anyway was what come out in the cablegrams. Mr Coates: I have no doubt that had you been there you would ha-c looked the part. Mr Parry: Thank you. Perhaps I would: but I am glad to say that they said you looked all right.— (Renewed laughter.) Mr Parry proceeded to question the sincerity of Empire preference, and expressed the opinion that New Zealand would have to deevlop along its own lines and become more self-contained and independent.

RELIGIOUS EXERCISES BILL. Mr John Caughley (ex-Director of Education) has petitioned Parliament against the Religious Exercises in Schools Bill. Mr Caughley says that the Bill would provide for a form of religious training acceptable only to certain Protestant denominations. The whole character of the proposed exercises, he declares, is distinctly denominational as between Protestant and Roman Catholic, and as between Protestant and Jew. Again, it could scarcely be denied that hymns such as those prescribed inevitably contained, more or less explicitly, doctrines, dogmas and views of religion or of spiritual life that were distinctly denominational—i.e., Protestant. On the basis that the proposed exercises would occupy one-hun-dredth part of the school' time the petitioner estimates that the State would be providing £35,000 per annum (one-hun-dredth part of £3,500,000, the annual cost of conducting the primary schools) for a form of religious training- acceptable only to certain Protestant denominations. Before Parliament considers passing the Bill, therefore, he submits that it is surely imperative that a just answer should be prepared for the claim that . must be faced for some equivalent State aid to Roman Catholic education; and the promoters of the Bill should be prepared to show that the Government could pass the measure and be ready to give such a claim an answer. The associated denominations behind the Bill, Mr Caughley remarks, seem to be breaking the Golden Rule of the Founder of Christianity, and to be doing so in the alleged interests of moral training, for why should a measure which makes no provision that Roman Catholics can accept be g-iven sanction to? The petitioner also refers to the position of the teachers, many of whom would be unable on account of their religion to take part. Exemption would be a mockery if the exercise of it carried with it any disability whatever to any teacher, who, on grounds of conscience, had to avail himself of it. The existence of a non-legalised similar practice tn secondary schools had resulted in the excluding of all Roman Catholics from the principalship of schools. With regard to other schools it must be clear that teachers who claimed the exemption would suffer in their profession. A

board would hesitate to, or refrain from, appointing a teacher to be in charge of a certain country school if it knew that the teacher exercised the conscience clauses even if the board knew that otherwise the teacher was the best qualified applicant. Finally, Mr Caughley says that the proposed method of reading the Bible would be to place that book on a lower level in the schools than the simplest nursery rhyme.

• * * * RURAL CREDITS. WELLINGTON, A ust 14. In his speech during the Budget debate Mr David Jones (Ellesmere) referred to the prevailing tone of pessimism that seems to be abroad in New Zealand at the moment. He said that in his opinion people were too pessimistic in their view of the country's prospects. He believed that good land was sound bu; Ing to-day. Sir Joseph Ward: Never better. Mr Jones: I agree with that. There is no doubt greater difficulties in the North Island where men on bus' actions have to put the whole of their cash and their energies into improving heir land. Even these settlers, however, should not be in difficulties so long as they can remain on their sections and renew their mortgages. That is one ofthe difficulties the Government will have to deal with. Mr Jones said he believed that the legislation passed in that House last session, as far as rural credits were concerned, was going to be a success. He believed that immediately those credits were put on the market they would sell. A system that had been in operation in other parts of the world was going to succeed here. He believed the new plan would be a remarkable relief to the farmers of this country. One had to realise that while the difficulties were here they had to be met.