IN DEFENCE

Southland Times, Issue 21853, 2 November 1932, Page 7

IN DEFENCE

ECONOMY REPORT SPEECH BY PRIME MINISTER MEMBERS EULOGIZED (From Our Parliamentary Reporter.) Wellington, November 1. A defence of the actions of the National Expenditure Commission was made by the Hon. G. W. Forbes in the course of his speech in replying to the financial debate in the House this evening. He also indicated some of the recommendations that the Government did not intend to adopt. He began by saying that the commission had had a very difficult job to perform and it had to be remembered that the men who had to deal with so big a task in so short a time could not be expected to be 100 per cent, perfect. As it was, they had been quite fearless in their work. It had been suggested that the commission had been in the nature of a “packed jury” and had been instructed to bring in a report acceptable to the Government. Mr Forbes did not think the report had been favourable, to the present or any other Government. The commission had been entrusted with the task of criticizing Government activities and making recommendations regarding a reduction in expenditure. Would any set of recommendations made by any set of men meet with the approval of every member of the House? The country was budgeting for a deficit of £1,000,000 and in the circumstances he took it that it was imperative to reduce expenditure wherever possible. Any suggestions made in that direction had to be seriously considered. He did not suggest that all the economies recommended by the commission should be carried out, but the commission fulfilled the purpose of giving ideas, outside the taxpayer, on the activities of the Government. Mr Forbes said he knew that members of the Opposition regarded anything as balancing the Budget as ridiculous and used high sounding phrases which deluded their audiences on the questions of public finances. However, that had to be done. Mr Forbes later in his speech stated that the commission had been appointed to recommend economies which the Government and heads of departments might not be able to recommend to be carried out in full. Social Services. Dealing with the various _ recommendations he mentioned the increase in amounts spent in social services since the year 1913-14. He believed that reductions in these could be made enabling the Government at the same time to give substantial benefits to the people. In 1913-14 the expenditure on health and hospitals was £308,693 and in 1931— 32 it was £1,103,959, an increase of 357 per cent. On education in 1913-14 £1,210,000 had been spent while the sum in 1931-32 was £2,977,000, _an increase of 246 per cent. On pensions in 1913-14 the expenditure was £604,000 while in 1931-32 the amount was £3,299,000. Of course in the latter amount he included war pensions. However, he was pointing out these facts to demonstrate the increased load on the country when the prices received for primary products had dropped below 1914 level. In those days the country felt it could not afford to spend more than the sums mentioned on social services, yet to-day the amount was £7,380,000, or an increase of 347 per cent, while we had just the same amount of money available in income as in 1924. Yet, members of the Labour Party claimed that the Government should spend beyond that amount. Mr W. E. Barnard: It can be done. Mr Forbes: If we did it, what position would the country be in. One would like to do all the things the hon. gentlemen are suggesting—l have supported increases in expenditure in the past—but the time has come when sensible men must look at things and ask if the country can afford it. Mr Forbes continued that members of the Opposition realized in their hearts that if the Government had not effected the economies it had the country would be in a worse position than it was now.

Commission’s Recommendations. Dealing with the Commissions report he said there were a number of recommendations which the Government had given effect to and would give effect to, but there were also a number it was not possible to give effect to. Careful investigation had been made and it had been found that while there might be savings in one direction, there might be increased expenditure in another. The Leader of the Opposition: Where did the Commission get its information? Mr Forbes: It was a Royal Commission and the Government has no more idea than the hon. gentleman himself. Mr Holland: The Prime Minister knows that the Commission got some information from the heads of departments. It said so. Mr Forbes admitted the Commission had said so, but it had also said it got information from other places. He had no knowledge of what witnesses came before the Commission. It had freedom to get information wherever it could. The Commission had made a recommendation regarding superannuation funds and the Government had brought down a bill on the subject. Then it was bringing down legislation dealing with reorganization of the Native Department. There was a recommendation that the Main Highways and Unemployment Funds should be abolished and the proceeds paid into the Consolidated Fund. The Government did not think that would be an improvement and considered very little economy could be effected. It was true that there was *■ an axiom against separate accounts, but in some cases these accounts were advisable and only in times of emergency would the Government take money from prosperous separate accounts. Hospital Districts. Regarding the recommendations for hospital board reorganization, Mr Forbes thought that aftpr an investigation some improvement could be carried out regarding ’hospital boards and districts, incidence of taxation, contributions of local bodies and differences of treatment in town and country districts. He did not know exactly what the economies would be, but he knew from long experience in the House that there had always been arguments on these points. The Government intended setting’ rap a Commission regarding local administration and the hospital districts question, among other things, would be referred to it. It was of the utmost importance to reduce the local body load on farming districts. Already Government expenditure had been subjected to the closest scrutiny and he thought the same should apply to the local bodies. He considered that by amalgamation economies certainly could be carried out. Mr W. E. Barnard (L., Napier): Will the same gentlemen be employed on the commission? i Mr Forbes: The hon. gentleman had better wait and see. They will be men with experience on local bodies. Mr P. Fraser (L., Wellington Central) asked why members of Parliament

could not be included. Mr Forbes replied that he did not think one would find members of Parliament willing to make such drastic recommendations as the Expenditure Commission. Regarding the recoin--mendation for the abolition of land boards, the Government considered that no economy could be effected by this step, and it was felt that in difficult times Crown tenants should be in the closest touch vzith land boards and the Lands Department. Concerning the recommendation that the Industries and Commerce Department should be reduced and its functions left to private enterprise, Mr Forbes said that while he agreed it was wise to leave many things to private enterprise, there were times when the Government could assist private enterprise as the Industries and Commerce Department did and provide that enterprise with information that was much appreciated. At present, when the Dominion was anxious to extend its markets, it was not the time to reduce the functions of the Industries and Commerce Department; rather should they be increased in some directions. A lead by the Government in those times was sound business. Tourist Resorts. Regarding the cutting down of the activities of the Tourist Department and handing over some resorts to private enterprise, Mr Forbes thought this would be a good idea if private enterprise would take them on, but in times like the present private enterprise was not willing to do so. Concerning the recommendations that local bodies be charged for services rendered them free by the Government, local bodies were in a very difficult financial position, and it was not considered advisable that they be called on to meet extra expenses. Dealing with the suggested amalgamation of the Cook Islands and External Affairs Departments, Mr Forbes said that already Niue Island had been taken over by the External Affairs Department with a resultant substantial saving. There was a recommendation that the Maui Pomare should be disposed of to private enterprise. The Government had in trade with Samoa a commitment it could not break, but it realized that if the trade could be left to private enterprise it would be well to do so. If an arrangement could be made in this direction the Government should be only too pleased to carry it out. The service was not operating at a loss. Mr Fraser: If the Government can’t operate the steamer, how can it run the country? Mr Forbes advised Mr Fraser to look into the disastrous Australian Government shipping ventures. The Government had been forced into the Samoa steamer trade and would be only too pleased to get out of it.