A BLANKETING EFFECT

Southland Times, Issue 22956, 31 July 1936, Page 8

A BLANKETING EFFECT

Measure Restoring Cuts NO REFERENCE TO FINANCES POSITION OF PRIVATE INDUSTRY (From Our Parliamentary Reporter.) Wellington, July 30. The fact that the Government was asking Parliament to sanction the restoration of the salary cuts without attempting to forecast the possible effects on the future finances of the country was stressed by the Rt. Hon. J. G. Coates (Nat., Kaipara) during the discussion on the Short Title of the Finance Bill in the House of Representatives to-day. Mr Coates explained that he was making his first contribution to the discussion on the Bill, as he had been absent from the House during the second reading debate. “We have a remarkable feature of the introduction of a Bill which apparently is not related to finances of the country,” Mr Coates said. “Restoration of the wages cuts is simply ordered, and it has got to be made. The last Government restored the greater portion of the cuts—nearly all of them, as far as they affected the lower paid Civil Servants—and it gave a clear indication that as soon as the revenues of the country justified it, the restoration would be completed.” The Prime Minister (the Rt. Hon. M. J. Savage): A very safe promise. Mr Coates: Yes, but is there not something in the word safety? Justification for Action. In bringing forward the Bill, Mr Coates continued, the Minister of Finance (the Hon. W. Nash) had not referred to the state of the national income or the productive income, nor had he mentioned the state of the National Accounts. The whole justification for the restorations apparently rested on the fact that they would result in the restoration of spending power, and on the : romise of the Government that as soon as it was in office it would give back the cuts. It was some time since the Government had taken office, and surely there was some case on those grounds for making the restorations retrospective to April 1. “I am not saying that the finances of the country do not justify the restorations,” Mr Coates said, “but in taking steps of this description the Minister and the Government should be prepared to give cogent reasons for their actions. There may be a good reason for dating the restorations from July 1, but it should be explained.” The second part of the Bill dealing with the restoration of the cuts to workers outside the Civil Service presented a difficult problem, Mr Coates said. Generally speaking, any form of blanketing legislation was undesirable, but that was the effect of this particular part of the Bill. It did not take into account at all the possible effects on the different industries, some of which might be forced out of existence, purely as a result of a lack of elasticity in the legislation. Penalty for Dismissal. It was laid down that an employer dismissing a man because of the necessity of increasing wages was liable to a fine of £25, said Mr Coates. In some cases where a man was entitled to £5OO a year under the new legislation it might pay the employer to dismiss him, pay the fine and then employ a man at £3OO a year. By paying £25 apparently the employer got out of his whole obligation. “It is essential to good government and to the control of trade and commerce,” said Mr Coates, “that the country should have some knowledge of the position under which these restorations are held to be justifiable. There has been no calculation as to what the legislation is likely to cost. Actually, it would be far better if the Arbitration Court was given power to decide on the facts rather than to have blanketing legislation which may cause hardship in many cases.”