DOMINION FINANCE

Stratford Evening Post, Volume XXXIX, Issue 91, 22 August 1923, Page 5

DOMINION FINANCE

NEW LOAN OF EIGHT MILLIONS. HOUSE PASSES BILL. Per Press Association. Wellington, August 21. In tlie House tin'ss evening, Mr Maksey moved t-lie second reading of the Finance Pill. He remarked that it contained forty clauses, no two dealing with the same subject. It might, therefore, lx> regarded as the financial washing-up Bill. MV Massey then detailed the most important features of the Bill, The Finance Bill contains authority for several important extensions in borrowing powers. These are: — Public works, £4,000,000; Advances to settlers, a sum not exceeding £3,000,000 in any one year; Advances to workers, £1,500,000 in any one year

The Minister for Finance is authorised to pay from the consolidated fund for the year commencing April 1, 1924, into the main highways account such sums as may be required, but not less than £35,000. Ho is similarly to pay out of the public works fund in the same year a sum not less than £200,000. The Minister for Public Works may in addition transfer to the construction fund of the main highways account in any year after March 31, 1924, any amounts appropriated for the preceding financial year for roads, which before the date of such transfer had been declared to be main highways, if such moneys had not been expended at March 31, 1924. The provisions in the Rural Credit Associations Act of 1922, whjch constituted all the liabilities of these associations as the joint and several liability of members, are to be repealed. The powers of the GovernorGeneral to modify the conditions under which local bodies may be' empowered to borrow money are to bo extended by eliminating the ten years’ time limit on loans requited u(f pay oft antecedent liability.

Tho promise made that the existing local body and company debentures shall not bear the higher rate of taxation provided in the annual taxing Bill is redeemed by the inclusion of a clause stating that, nnleste expressly provided in thb anStmal taxing Act for any year, the income derived from these classes of debentures issued before the passing of this Act shall be levied at the rate of 2s Gd in the pound. Other financial provisions include authorisation of the payment by the Finance Minister of a sum not exceeding £375,000 in payment for 375,000 preference “B” shares in the Bank of New Zealand Another clause btates gifts made for charitable trust' purposes * shall not be included in the final balance of tho donor’s estate, notwithstanding that he may die within three years after having made a gift. This section is to be retrospective. A grant of £SOO is to be made to Miss Ida Fraser, daughter of the late Sir William Fraser, in recognition of his public services, and au annuity of £l6O per annum is also to be paid to, her. The travelling allowance of the High Commissioner is to be increased to £2 per day while travelling in tho ■ United Kingdom, or £2 10s if travelling abroad, the maximum to be £4OO in any year, instead of the former limit of £250.

STOP BORROWING. The Leader of the Opposition (Mt T. M. Wilford) said the Bill was really the “washing-up” Bill under the title of the Finance Hill and there was no warrant for what was being done. The Washing Up Bid was coming down and many clauses of tins Bill should have been reserved tor that measure. The public indebtedness of tho Dominion now amounted to £219,000,000 and this Bill gave power to borrow a further £8,000,000. He said the time had arrived when we must stop and take thought of ouif borrowing. It might be a long time before Europe was reconstructed and before our markets were fully restored. Further, we must look to serious competition in dairy produce from Russia, which may any day be aided by American capital. Our secondary industries liacFuot made the progress we might have- expected. The Premier proposed tb raise a loan in Britain while he was there and h* would bring iback more than a re- ] ceipt. Ho did not believe the Advances Department would be able to cope with the necessities of our people when the moratorium expired. Hts belief was that tho real remedy lay in rural hanks, and he asked tho Premier when in Britain, to make full inquiry into the latest- development. in this connection. Commenting on the proposal to provide £35,000 for the main highways, account, he expressed the opinion that sufficient money to carry on the main highways would not be obtained through a tyre tax. He complained of the absence of information regarding how the £4,000,000 proposed to be raised for public works was to bo spent. It was not fair to ask the House to pass huge sums en bloc in this way. A proper schedule should have been prepared and the fullest information should have been given to members. Ho x-eiterated his warning against excessive borrowing and urged the revision of our system of taxation on a strictly scientific basis. Air W. D. Lysnar (Gisborne) ridiculed New Zealand's dairy industry

being in any danger from Russia*, competition. The Hon. W. Nbsworthy said there was no country in the world in a better financial position than New Zealand, and in now country was there less unemployment. Was the Opposition prepared to say that' ail, - the big public works, including hydro-electric schemes, must stop? , THE PREMIER’S REPLY. ' l ... A The Premier, in reply, said the outstanding feature of the debate was pessimism. With regard to the unexhausted authorities to borrow referred to by Mr Wilford, he admitted the present system of dealing with these authorities was wrong, and laid this been a normal session he would have altered it. A great many items on the list of authorities wore “duds” and ought to bo cancelled. What he thought, should be done in future was that the whole of the Government’s borrowing proposals should be put in one Bill, and, not, as at present, in several Bills. Mr Wilford had referred to the tire tax. At present the accumulated tire tax amounted to £125,000. This % would be useful, as the intention was thati the tire tax should be used to pay interest on monies borrowed to make roads. He did not think (Russia would be a serious competjitor in dairy produce, but h© did expect competition from South America. Ho was afraid our people were not so particular in preparing our dairy produce as they used to be, but if we desired to Hold' the masteiy over the British market, then the greatest care must be exercised in maintaining the high standard of past years. The Labor Party objected to borowmg, but it ;, was utterly imposibl© to provide money for public works out of revenue. The Bill was then read » second time and th© House 'Went into committee on the measurer At 1 o’clock the committee was still diteussing clause 6, fixing the rates of income tax on income derived from company and local body debentures, which the Labor Party was strenuously opposing. Mr D, G. Sullivan (Avon) moved to amend the clause in the direction of making the tax on local body debentures issued both before and after the passing of the Act 2s 6d. This was lost on the voices and the danse was passed unamended. The remainder of the dauses were agreed to without alteration, and the Bill was read a tl(ird time and passed. t .