THE BUDGET DEBATE.

Stratford Evening Post, Volume XXXI, Issue 37, 28 September 1911, Page 2

THE BUDGET DEBATE.

WHAT MR J. B. JUNE HAH TO SAY. 1 Speaking on the Budget debate in 1 the House on the 13 th September, as reported in ‘Hansard,” Mr Hino said : J. am sorry, Sir, that 1 do not find very much in the Budget to congratulate the Prime Minister or the Government upon. No doubt the Minister ol Internal Affairs considers the speech ho delivered last night an epoch-mak-ing one, but it went chiefly in the direction of continuing to a large extent the self-laudation of the Ministry so prevalent in the Budget. Beyond that fact in the Minister’s speech delivered last night I do not think that anything further can lie said. 1 purpose in the few minutes at my disposal to deal in the first place with what I might term the misleading statements of the Budget. The Leader of the Opposition very properly called it a “vote-catching” and ‘bribing” Budget; I go further and say it is a “misleading” Budget. And 1 wish to call the attention of the House and the country to the fact that the Budget laid before the House gives what the Minister has been pleased to term a comparison of the amount borrowed during the period before the present continuous Ministry took office and since that date. If we turn to page 9 of the, Budget we find that there arc two tables for comparison ourposes—onei. giving the amount of expenditure out of borrowed money previous to the year 1891 and another for the period since 1891. Now let us look at the schedule for the period before 1891:—.. • Interest-bearing. Borrowed for— £ Railways, • 14,580,000 ■ Public buildings 1,800,000 Telegraph and telephones 769,000 Purchase of Native lands 1,546,000 Loans to local bodies ... 325,000 ■ i NcrHnteresi-bearing. Borrowed for— £ Maori wars 2,357,000 Defence ... 1,638,000 Roads and, bridges ... 5,106,000 Harbours.and lighthouses 484,000 Immigration 2,459,000 Goldfields and coalfields development. 571,000 Costs of raising loans, discounts, and conversions into stock, etc., provincial liabilities taken over 7,195,350

That is what . tiio 'Ministry are pleased to, call the interest-bearing portion of the money borrowed previous to 1891. I want to ask the Ministry about an item' under ilie beading of “Non-interest-bearing,” “Charges and expenses of raising loans, increase by conversions, etc., together with provincial liabilities, £7,1’ f want to know what this provincial liability mentis; and I hope the Ministry wil explain to the House whether or not that' amount includes the live millions and a half approximately handed Over ; td the General (Government when the provinces wore abolished, and which was composed i largely of the amount that had been expended in the construction of the New Zealand railways. If we follow out the Budget it only shows that twenty-five millions has been spent on railways, whereas tiio Railway Statement shows that thirty-one millions have been expended on railway construction in New Zealand, leaving”V discrepancy between the Statement of the Minister of Railways and the Statement of the Minister of (Finance of £5,900,000; and we want to know whether this amount should not have been included in the interest-bearing portion of the debt, instead of being considered as non-interest-bearing. Then, turning to public buildings. It is remarkable how the Government twist and shift to suit their own purposes; and every time the argument is in favour of their own figures they place amounts in the interest-bearing schedule, but when the figures support an argument ■against the Prime Minister, they are placed in the non-interest-bearing list. For instance, on public buildings previous to 1891 £1,800,000 was expended, and this amount included the cost of Parliament. Buildings years ago, and since that date £3,440,000 has been expanded on the same purpose. It is remarkable to. find that the Government claim that that is interest-bear-ing, although they admit there is no revenue. ' The'bnly plea is that if they had not built these buildings they' would have had to- pay rent. Thing again, take the roads and bridges item placed in the non-interest-bearing schedule. Surely, if anything bears interest it is roads and bridges. Where did a largo amount of the money that lias been expended on roads and bridges come from P it was loaded on the land in the first instance, and the settlor had to pay it as a first capital cost. I think that a clear explanation of the position regarding the amounts expended on roads and bridges is the greatest condemnation that any member of Parliament could give the present Ministry. Before 1891, £5,100,000 was expended on roads and bridges in Now Zealand. That was i considerable amount when the country was young and money scorco and settlers wore struggling and there was no buoyancy in affairs, agricultural ir commercially, as at present. Since i SOI the Liberal Government have spent on roads and bridges only 21,765,000. The Hon. R. McKenzie: No. Mr H ino: What does the Minister if Public Works mean by that: Ib.v’>o moan to, say that toe St itcmenv of ‘.ho Minister of Fin.nncr is wrong f Ho had better get the Budge! ir front of,him and chuck the figures as f n?:ul them. I apnea! m all coenm gomberc in the House, no mutter what side they are on, to say w'vtlvi ilmv think the Liberal (Jove* nans’! in L;;rcat triumphal maivii, us ’..bey ere pleased to call it has dom- .in Hive to tiio back block settlors of Nun Zealand. Today we find that in the Itndget

tlioro is outlined n fresh land-settle-ment scheme and that roads arc to he provided for; hut it is remarkable that there is not. a word about roads for the present settlers. Neither is there i word about the loan of a million sterling that was raised four years '■go l ()i ‘ special expenditure on roads. •And what about the requirements of the backblocks? I tried to believe that after the tour that I had with the Finn. Air, R. McKenzie around the inland districts of the North Island tiio heart of the Minister of Public Works would he touched. In some of the districts deputations waited upon him giving deplorable instances of the hardships of the settlers. In one place a settlor had been on his section for eleven years, ami had no track to it. I want the House to note the Minister’s,, remark to that man. This, man ( had. applied for road communication for years, and the member for ,the district had for ton years bqen knocking at the Government door for the means: to give him access, yet lie had now only a threefoot track. The man was the father of eight children, and was compelled by the neglogenco of the Government to live in isolation. What possessed the Minister I don’t know, but his reply to the man was: “Do you not think it would tion?” This appears to me to be a cruel method of treatment to a man who has spent ten years of the best part of his life in improving his property, and yet what 1 have stated was the only hope; the-Minister could hold out to him. a Since this' Session opened I approached '.the Government, , and asked them'if; they would give the hum the opportunity of. exchanging his section, but up to the present time there has been no; (result, and I am afraid that unless the Minister realises Ids' responsibility that man'will be no better off. Now, I said at the outset that the Budget was remarkable for the absence of the main questions of the dm/; and it is my opinion that the main questions, from the country’s point of view,, are the .tenure of land and the cost of living. I know that Government supporters will say that the cost of living is mentioned. It is true that it is mentioned in a vague sort of way in the proposal i.) swL up a Royal Com mis ion to inquire iiu-i this question in conjunction wiln an unemployment scheme. Tin/ is net what wo expected, nor what the country requires. Wc did not cxpnt that the platform of the reform, parly would bo plagiarised. „as it is in the Budget. The, three or four progressive measures which arc contained in the Budget have all been, adopted from the reform .party’s .platform. To prove that I will quote from the words used by the lata colleague of the Ministers, who, speaking in Auckland this week, laid it down emphatically that he saw it coming. He. did not say in so many words that he left the Ministry on that account, but this is what, he did say : “The long years of dominance of the Republican Party have seen its capture ,by the .plutocrats kind privilego holders, while the • Democratic I’arty. in the,-school of adversity has developed into, the party of progress and reform—the people’s party.” - , Mr how Ids was referring to what, is happening in. America. I propose to transpose one or two words, and apply the statement to New Zealand, when it will read like this:—

“The long year of dominance of the Liberal Party have seen its capture by the plutocrats and privilegeholders, while the Opposition party in the school of adversity has developed into the party of progress and of reform—the : people's party.”

That is exactly what Mr Fowlds was afraid would happen in New Zealand. The cx-Minister’s own words were—and who could bo in a better position to judge?—his own words wore that he was afraid the positions and privileges would he captured by supporters of the present Government, and they would forget the high traditions of Liberalism,’and that the Opposition would then come to the front with a liberal and progressive policy. Ho considers- that that is what is now happening, for he goes on to say : “Mr Massey and the Opposition are advocating one or two progressive reforms, and,-’ uhder a how leader, might easily step in and leave the Liberal Party side-tracked.”'” That, I think, is sufficient in regard to the position that Mr Fowlds takes up with regard to the .policy enunciated in the Budget by his late colleagues. In comparing :tho tables just now 1 mentioned the railways, and roads and bridges. There was another which 1 inadvertently left out, and I should like to go back to it—that was, the immigration scheme. The present Government when approached by the workers of the soil have expressed sympathy with the suggestion, but when approached with the dwellers in the towns they say they have no intention of supporting such a policy. Now, the expenditure before 1891 in the way of aid given to bring suitable people to the. Dominion amounted to £2,109,UU0. I think that could very well be -classed under the bead of indim t interest-bearing, especially as in the old times these people brought out money with them. It was one of the conditions, especially among farmers, that they must have money before they could got assistance from the State, and this money when they came to the Dominion would be utilised in purchasing farms, stock, buildings, etc. I think, therefore, that the money that was expended in bringing them out ought to lie considered interest-bearing. But since the present Government have taken office a very minor amount lias been spent in assisting immigrants. Note the difference: before 1891 the amount was £2, 1b.9,000, and since then it has only been £1,002. Tin’s is the Government's mode of immigration, in helping to bring farmers to settle the waste lands of Now Zealand—if they were available for settlement, though

1 am sorry to say they are not. But I do not wish now to be side-tracked into expressing an opinion on the land question at present.

An Hon. Member; Do you want us to have free immigration?

Mr Mine: That is what it lias been; it lias been free immigration for a long time—immigration without assistance. That is what the Libel'll! Tarty has been carrying out. What I should like to see is an immigration, policy that would encourage settlers with small means to come out here so that they would not have to spend all their money on passages, out when they came would have somet' ir.g to invest in stock and so on, and so be able to make a favourable start ruder good conditons. And this phas-J ol the question the present Government have entirely Ignored c> - neglected. People coming with a small mi. on: t of money to take up lc.nl, t am sorry to say, at the present time is unknown in Now Zealand. A great deal was said last night about public debt extinction, and I am going to refer again to that. 1 voted against the i (ensure last year, and I would vote against it again under the conditions laid down, though I am in favour of a sinking fund on proper lines. I say we were simply hoaxed last year- we were misled. The fact is that although the proposal had a soft of glamour on the face of it. and was apparently intended to set the whole matter right, when you look into it you see the weakness of it.- For instance, previous to this Act, there was a sum of £992,292 set aside as sinking fund, and it had accumulated as years went by, and was set.aside for the purpose of redeeming special loans—the old war loan and the loans to local bodies. The larger portion of the amount was to redeem the loans to local bodies—£77o,ooo, I think it was, that had been set aside to redeem the loans to local bodies; and these loans would have been paid off in a very few years... Of course, they had their period of maturity. Some of the loans were for twenty-five years, some thirty-one, and some forty-two; but every Ip an borrowed at the time the Act was put on the statute book would have been paid off at maturity that is, within forty-two years from the .inception of the last loan. Such being the case, in all probability some were just on the point of maturity; and if the Government had done justice to the settlers who borrowed the money-—the men who paid the sinking funds out of their own pockets—and if the Government wanted to do justice to the money-lender, the money should have gone towardsi.redeening the loan which had been borrowed for special purposes. Instead of that, the money has gone into the hands of the Public Trustee, who is ordered by Act to pay the interest to the Sinking Fund Commissioners —to pay to them simply the interest derived yearly from that sum. This means that' the loans to the local bodies, which were originally intended to mature in twenty-five or thirty-one years, have now to run for a period of sev-enty-live years after the passing of this Act before the loan, can be paid ■)(f, although long before that period

elapses, the settlers will luvvo redeemed their loans. So that after the settlers have paid off their money they arc to ho asked to again pay off a \ proportion of the same loans in the j way I have indicated. 1 say til at is unfair. The same remark does not apply to the war loan, because it was spread over the whole Dominion—that is the sinking fund of J per cent, was spread over the whole Dcftninion. But even in that case the sinking fund so accumulated has been captured—l will not use the term “collared”—by a Government that has apparently lost all decency and consideration of honourable methods in connection with finance, f do not think it is worth while going into details as to what is being don. with the £144,885 that is paid yearly; but if it had not been for those tw. amounts which the Government un fairly took advantage of, the amouiu | that the .Dominion would have sen | aside would have been something life. £128,000 per annum, instead of tin £12,000 as shown in the Statement Plow, we have heard a Job about tin live-million loan. Ido net propose to go into tiie effect of that loan oi. the English money-market. ido no. propose to go into the various works to which that money was supposed t. bo applied; but I am going to put or record in plain figures tiie amount that that loan cost New Zealand— 7 tnat is, as far as I can learn. I wish too Minister of Finance would follow the example of the Acting-Minister o: Finance a little closer in inspect of giv ing inforniatii.il. In the absence o. the Prime Minster during the las. six months the Acting-Minister o. Finance took the Dominion into Ids confidence more than the Prime Min inter does. A few day previous to tin return of the Prime Minister the Act ing-Minister of Finance laid on tin table of/ the House a paper chowiiij, the cost of the raising of some of tin. loans up to dat6. But I would liki to know why ho withheld inform ation as to the cost of raising the £1,000,000 for Aid to Public Works, and Land Settlement Act of 1900. that information much have been L ids possession. The Hon. Mr Millai laid on ,tho table information us tc the cost of the raising of other loans—loans which, 1 believe, fairly 7 ant squarely, cost the Dominion very lit tie. But, so far as I can ascertai: from the information available, tin expenses of that one-million loan amounted in the first place to £34,900. I'hc Minister never gave us any hint that the raising of that million loan cost sucli a huge sum. I find that £14,000 was paid in the way of oxpauses for that lofin during 1909, anc in the last annual accounts there is an additional charge of £21,000 for ex ponses and charges in connection with the same loan. That amounts tc. nearly 4 per cent as charges and expenses in connection with the raising of that, loan; and I say that it h too largo a percentage altogether. li wo can take that as a guide as tc what the five-million loan is going tc cost us, what will the expenses anc charges for the raising o, that loan amount to? 1 may mention that those charges arc apart altogether from underwritinj. fees, discount fees/ and converion fees —outside of those altogether, and out

side, also, any concession given by way of interest. To make it more plain, I come to the five-million loan.

and I place on record a table relating to the offer given by the Government through the prospectus issued; and I wish to draw the attention of honourable members, and the people of tho country too, to the remarkable conditions tho Government offered to give to make the loan a success. In tho first place tho underwriters were to bo paid 1 per cent., totalling £50,000; secondly, tho loan was issued at 93i, a net loss to tho Dominion of £75,000; thirdly, to induce tho moneylender to convert tho short-dated debenture into inscribed stock, £2 pci eent. was to ho given as premium, totalling £100,000.'; and, fourthly, they were offered si:: months’ interest if

they would convert before the Ist I)e----combpr—forr—for only about five weeks’ use of tho money it cost the Dominion another £75,000; making a total of £300,000. That is what tho five million loan cost Now Zealand over and above the usual minor charges—£3oo,ooo to make sure that the fivemillion loan was going to be a success. And wo know what sort of a success it was. The underwriters lin’d to find 93 per cent, of the total a/nount; and although 1 believe for a short period 'the underwriters had great difficulty in passing tho loan off, ultimately they had hotter success, and disposed of tho balance without any monetary loss. But wo want to know, outside tin's £300,000 that tho Prime Minster offered tho moneylender, what it cost in expenses and charges. lam quite convinced that when tho true condition of things is ascertained tho amount will bo found to lie appalling. I hope it was not done on tho same basis as the million loan, which cost £3-1,900. An Hon Member: Give ns your idea.

Mr Hino: Wo cannot find out; we cannot get the figures; my idea is not worth having; wo simply do not know; wo want the true facts. I give you tho figures as far as it is possible to get them from official records. The Hon. Mr T. Mackenzie: All rubbish. (To bo continued.)