THE SURPLUS

Southland Times, Issue 18926, 27 April 1923, Page 6

THE SURPLUS

MR HOLLAND’S CRITICISM REPLY TO THE PREMIER REDUCTION ON TEA AND TOBACCO ; DUTIES (Per United Press Association.) OAMARU. April 26. Speaking at Windsor on Tuesday night, the Premier replied to Mr Holland’s comments on the financial results of the year. Mr Massey said: “Mr Holland, leader of the Socialistic Labour Party, has described the balance which I have put forward on behalf of the Government as a surplus on paper only. He also says that in his opinion it was produced by several methods one of which was, of course, an unjustifiable attack on public servants’ wages. There was no attack on public servants’ wages. They have not been reduced one hundredth part of a farthing during the war. As everybody knows the cost of living went up considerably and people in the employ of the State knew that something was necessary in the way of a bonus. The Government set up two boards to go into the question and temporary increases recommended by those boards were agreed to. It was also agreed by the Government and representatives of State servants that the bonus should last only for, the war period and then it should be withdrawn. The bonus amounted to £95 and everyone in the service excepting those getting the higher salaries beyond £5OO got it. As time went on we found we had to fnd the enormous sum of £4,500,000 a year to pay bonuses.” Mr Massey then referred to the slump in the prices of produce and demands on the Exchequer to keep the railways working and works going. He continued: “We had to decide to cut down not the salaries and wages of public servants, but the bonuses. It was decided to take £45 off the bonus leaving each servant a permanent increase of £5O. That was the position. Salaries were not touched at all. Two cuts had been made and a third cur has not been made on account of the improved position of our accounts.” Dealing with Mr Holland’s statement that another method of making the surplus was holding back expenditure on necessary public works, Mr Massey said: “There are two main accounts —one the Consolidated Fund where revenue and expenditure come in, and the other Public Works. The Consolidated Fund account has nothing to do with Public Works which are paid out of borrowed money. If the Government had not spent a copper oi money of the Public Works account the position would have been exactly the same as it is to-day. The statement made by Mr Holland was due either to gross ignorance or it was an unjustifiable attempt to mislead the people of the country. (Anplause). Mr Holland was not like Mr Wilford who was getting very cautious about touching on financial matters.”

As to Mr Holland’s statement that another method of creating the surplus was to increase Customs duties, imposing burdens to those unable to bear them, Mr Massey said he did not think the increases affected people very much. He had asked Parlicment the session before last to double the duty on spirits and beer which were luxuries. He hoped it would be possible a little later to revert to the old duty on tobacco and one of the things he was going to ask Parliament to do was to knock out 3d on tea and ne thought that would make a difference of 4d in the price at which tea was now sold. Mr Holland had said enormous concessions had been made to the more wealthy land and income taxpayers. His reply was that the surplus could not be made out of the concessions. It was quite true that some reductions had been announced. One of the causes of the depression and high cost of living was heavy taxation. Where a heavy tax was placed on merchants they naturally increased prices of their goods. That was the way of things—the higher the income tax the higher the price of goods. The country would never get back tc normal until reductions were made in taxation. He characterised as ridiculous Mr Holland’s statement that notwithstanding this latest surplus and the fact that the accumulated surpluses now stand at £25,000,01)0, the Government would still plead there was no money available when asked to go ahead with urgent public works. “Fancy,” said Mr Massey, “a man having been in the House all these years and yet doesn’t know that £20,000,000 of that money went in buying soldiers’ farms.” DUNEDIN LIBERALS. WISHING MR MACPHERSON SUCCESS. DUNEDIN, April 26. At a special meeting of the Dunedin Liberal Association to-night the following resolution was carried: That the Dunedin Liberal Association wishes Mr J. A. Macpherson every success in his appeal for justice at the hands of the electors of Oamaru. It trusts that the electors will recognise the merits of his appeal, and will declare for non-Ministerial interference with the freedom of electors, and against the making, during an election campaign, of Government promises to expend public money.