BUDGET DEBATE.

Pahiatua Herald, Volume XLII, Issue 12750, 14 September 1934, Page 5

BUDGET DEBATE.

FINANCE MINISTER’S REPLY. DOWNWARD TItEND ARRESTED Electric Telegraph—Press Association WELLINGTON, Last Night. The debate ou the Budget in the House of Representatives closed this afternoon when the Minister of Finance (Hon. J. G. Coates) replied. Mr Ooates thanked the House for the reception which had been accorded the Budget. It appeared that Xew Zealand had arrested the downhill rush of the last few years, and the country was pleased with the the country could give a sigh o.f relief. There wore evidences that the country was pleased with the Budget. Mr 'P. Fraser: They’re easdy pleased, aren’t they. Another Labour member: Are there any thanks from the relief workers P

The Minister thanked the Civil Service of New Zealand for the way it had faced depressed conditions and kept up the efficiency of the departments in the face of reductions in pay and in staffs, and said he thought the Government was justified in making some increase in salaries. It had been suggested that the lower-paid servants should be the first to receive increases, but the Government had felt that the increases should be granted all round. Ft had been suggested that there should be an increase in the salaries and wages of everybody outside the Service, but for the Government to make such a declaration would have been most unfair.

MR. RANSOM’S PROPHECY. Discussing the prophecy made by the Minister of Hands (Hon. E. A. Ransom) that there wouldi be a surplus of £l,<>oo,ooo at the end of the financial year Mr Coates said that long hours and hard work had been spent in obtaining correct estimates of the revenue and expenditure, and, although the revenue might be exceeded, the heads of Departments would have to exercise the strictest economy if the surplus of £BOOO was to be realised. There might be windfalls—one had occurred since the presentation of the Budget—but every effort had been made to obtain accurate estimates. OLD-AGE PENSIONS.

Tt had been suggested that the old-age pension increases should be made retrospective to April 1, but as Minister of Finance he had to see that he did not exceed his estimates. He would have liked very much to make the payments retrospective, but he was unable to say at the moment whether the country’s finances would stand up to it.

Mr Coates said old-age pensions Lad been paid in New Zealand as follows: 1898, 7s per week; 1905, 10s per week; 1917, 15s per week (by addition of 5s per week as war ft'rorius) ; 1920, 15s per week (bonus Yeing incorporated in liens ion) ; 1924. 17s 6a per week (by addition of 2s 6d per week where no pror.erty or income possessed); 1925, 17s s>d per week (by making increase of 2s 6d per week generally) ; 1932, 15s Del per week (reduction of Is 9d ) ; 1934, 16s 6d per week (being 5 per cent, increase). 'Tt will be noticed,” said Mr Coates. “that the pension is higher than it was at any time prior to 1924. It should also be noted that the cost of living has fallen considerably in recent years. Compared with 1914 the index of retail prices in 1929 was 160. The figure for May, 1934 (the latest available from the Government Statistician) is 129. This drop of 31 points (or nearly 20 per cent.) means that the present pension will buy more goods than would the 1929 pension.” UNEMPLOYMENT TAX. Mr Coates said that in his opinion tbe unemployment tax bo re more heavily on the community than any ether tax. It was hard for the lowerpaid wage-earners to have to part with Is in the £. The reduction of the tax to lOd would mean a drop in the fund of £50,000 for the half-year. The board had finished the finanrial vear with a surplus of £1,000,000.

Mr R.. Semple: Shame! Mr Coates said that the board had had commitments and had wisely preserved its funds as an alternative to being compelled to make a further and unexpected charge on the taxpayer. Mr L. Langstone: Will the Minister admit that the commitments could have been met out of current account ? Mr Coates: That is incorrect. Tliat is not the position at all. He said that the board bad had commitments amounting to £600,000, and had also budgeted for a greater number of unemployed. The board had estimated the peak number at 75.000, but tbe figure had been less than 60,000, and here there had been a gain to the board. The 2d which would he saved by the taxpayer would be put ir.to 'ireulation, and perhaps do something towards a restoration of confidence. Mr TV. Nash : Wbv not take the 2d off those receiving £250 only? Mr Coates replied that a double graduation of the tax seemed to he i nfair. THE NATIONAL DEBT. Dealing with Nr.'- Mc-Keen’s statement that. in the space of six vears, the National Debt* had grown by £33,000,000. Mr Coates said that, in 1929-30, the Public Debt was £267.000,000. In 1932-33 if was £282,000,000. That had been increased by £1,277,000 in 1933-34, bis vear of office, and that was in part due lo loan conversion operations. Apart from that, the increase in the long-term debt in the last financial year was £786.000. To get his £33.000,000 Mr McKeen had apparently used the temporary amount issued under the exchange indemnity arrangements. That was now entireTv wiped out, the floating debt at present being about £2..500.000.

ATr Coates added that the estimated deficit was licit reduced by manipulating the highways fund as suggested, but by increases in practically all items of revenue. In addition, the interest on railway capital showed an increase of £294,000 over the estimate. There was also a saving of £255,000 on tbe expenditure side. Dealing with the conversion of silver and the comments by the Auditor-General, Air Coates quoted fi om correspondence and cables ihat had passed between tbe British Government and the Imperial Mint and the New Zealand Government and said that every care was taken in the negotiations that took place. The House resolved itself into committee of sn/pply. Progress was reported and leave was given to sit i again.