FACING THE PROBLEM

Stratford Evening Post, Volume I, Issue 87, 21 March 1931, Page 8

FACING THE PROBLEM

DOMINIONS FINANCES

OPINIONS IN PARLIAMENT

DEBATE ON FINANCE BILL

WELLINGTON, March 20.« The House of: Representatives met at L\3o p.m. Air P. Fraser (Labour, Wellington Central) Rave notice: "That prior to the finance Bill being eommittPil to the committee of the whole House, he proposed to mov that it be an instruction to the committee of the vvh i.e •louse on the finance Bill that it had power to nia.ee provision in the Bill for arf-uring that the cost of living, iiicluuin; fooii. clothing, and rem., be li.werol suiiti.rj neously with and mi propi rtio>. t(. the amount of the reduct.i.m in sauuits of the public servi'e eiap'.oj Co.- a.- specified in the Bui, and simultaneously with, and in proportion to, the amount of the reduction in wages as ordered from time to time by the Arbitration Court 1111 !er the Bill." Mr W. Nash (Labour, Hutt) called the attention of the Prime Minister to the :';;vt thai, certain niuri.yngeos, in anticipation of the legislation for the relief of mortgagors, were definitely taking action to sell under mortgages, arid he asked whether the Government would take immediate steps to protect mortgagors and ordinary creditors.

Hun. (i. VV. Forbes said the foveminent intended to inser. a prov : > ion in the Mortgagors' Relief Bill making its operation effective at the date of introduction of the Bill, so that any action taken to defeat the purpose of the Bill would be dealt with by the court. Hon. J. G. Coatcs asked whether it was intended to alter the constitution and personnel of the War Pensions Appeal Board. He added that the returned soldiers had received nothing but satisfaction from the present board. Mr Forbes said that a reorganisation of the board in the interests of economy was at pre: 1 nt under consideration by the Government. Tho Finance Bill On the motion of the Prime Minister urgency was accorded the second reading of the Finance Bill. Labour members called for a division, and the motion was adopted by 50 votes to 24, Messrs Black, Harris, Hogan, Fletcher, Rushworth and Wilkinson, in addition to the Labour members, voting against it. Continuing the debate Mr C. H. Chapman (Labour, Wellington North) suggested that the United Government had accepted the support of Reform and that the price of this was acceptance of nine-tenths of the Reform programme involving a reduction in the standard of living. Mr C. A. Wilkinson (Independent. Egmont) said ho considered that the Minister of Education had made an unwarranted attack on the businessmen when he stated that businessmen were not desired in Parliament if it were to function as it was intended to, and in the interests of the people. Mr Wilkinson declared that if there were more businessmen in Parliament such wildcat schemes as the South Island Main Trunk Railway would not be undertaken. He added that salary cuts were inevitable and he supported this proposal, though ho could not support the Arbitration Court clauses of the Bill. Although he did not agree with the principle of the Arbitration Court, he considered that the Bill involved the breaking of agreements. Mr D. G. Sullivan (Labour) asserted that the most disastrous feature of the debate had been the attitude of Mr Forbes towards the sacredness of the agreements contained in the Arbitration Court awards. If those agreements were not to be observed as such by the Prime Minister and could be light-heartedly broken, he suggested that it might reasonably follow that tho parties to the awards, employers or employees, would also consider that they were entitled to regard them in a similar light. Revision of Taxation Mr F. Waito said he feared that the deficit at the end of the financial year would amount to more than £1,250,000. One reason was that the ordinary forms of taxation did not yield well in unprosperous times.' For instance there was a tremendous slump in the imports of luxuries, from which a large portion of the Customs duty was derived and income taxation also must decrease in the next twelve months. The Government would have to revise the system of taxation along lines which would yield a reasonable amount in bad times. Continuing, Mr Waite said there was no more virgin land in the Dominion, and to increase production it would be necessary to improve land already broken in. That was a costly business. No matter wah land settlement scheme was undertaken, farms should only be developed if the work of developing them paid. The Dominion had failed to maintain its volume of exports per head of the population,, and unless it could be increased, the standard of living must go down too. A large proportion of the people of New Zealand were in non-productive industries. The balancing of the national Budget was not everything. The country might. Mill fail even though the national Budget were balanced if, by adding taxes, another millstone Were placed round the necks of the producers. Costs had to be reduced. Farmers costs largely consisted of charges for labour and the products of labour. Every increase in transport charges were felt by the farmer, who had to produce at a high rate of costs and sell at a low rate in the world markets. The Minister of Education had stated that the next move in industrial progress would be shorter hours, but Mr Waite added that the farmer at present was working 14 hours daily. The only sweated labour in this country was among the farming community. Graduated Tax Sysem. Mr M. J. Savage (Auckland West) said that persons paying income tax were given exemptions for insurance and dependents, but those below the income tax minimum were now asked to bear a reduction without any exemptions. The additional revenue required should be raised by a graduated system in accordance with ability to pay. There was no guarantee that the increased post and telegraph rates would bing in increased revenue, but they certainly would be a brake on publicity and commercial enterprise, it was intended to place the railways under a board which would alter the policy,

but why could not the policy be altered by the present management. At the present time the railways Compared more than favourably with the competing services. He suggested that if private motor services were placed on the same footing as the railways and asked to pay interest on loan money for roads, and requested to take all the freight taken by the railways instead of being able to pick out tho eyes of the freight, the motor services would, in such circumstances, not live with the railways. Mr Dickie's Suggestions.

Hon. H. G. Dickie (Reform, Patea) said lie agreed with those members who contended that additional revenue could be derived from taxation on beer and spirits. Referring to the wheat duties he said he did not advocate their total abolition. There could be some small protection, but it should be within reason. The bounties granted any industries should not be permanent, but should only be given to enable them to get over the first few years. Mr Dickie expressed the opinion that tho Dominion could do without many departments of state —for instance Town Planning and the Prime Ministers' Departments. He thought the New Zealand secretariat at Geneva might well be abolished and this country's representation linked up with that of Britain or some other Dominion. Further economy could be effected by uniting the export control boards. A great deal of money was spent on the Dairy Board and the Meat Board with very little in the way of results. Mr Dickie added that the High Comniisioner's office in London was due for an overhaul.

Mr W. E. Parry (Labour, Auckland Central) expressed the opinion that the expenditure on New Zealand's representation at Geneva was fully justified by results. Mr Parry said the Labour Party had never denied tiie necessity of balancing the Budget. It contended that the Government's proposals would accentuate the difficulty by reducing consumption, and it urged that the necessary revenue should be obtained from those people obtaining the greatest share of the national pool. He asked v. uat objection could be raised to a surtax on all incomes over £SOO a year. Speech hy Minister. Hon. S. G. Smith said he wished to deal with the portion of the Bill relating to the Industrial Conciliation and Arbitration Act. "I take my full share of responsibility in the proposals the Government have made in all respects in order to meet the position which faces New Zealand today," the Minister declared. "For 20 years of my life I was a civil servant, and I have lived the life of the lower paid civil servant, it will therefore be understood that now, as a Minister of the Crown. I would not have Kirrccf. to the proposals unless they were absolutely necessary, and I agreed to them because I believe they eventually are going to be' a greater benefit to the 'workers of this country. '' Mr Smith stated that the proposals in the Bill dealing with the Arbitration Court merely gave the court »powcr to consider the position of New Zealand to-day, and insofar as their duties and power were concerned, to make a general order fixiug a percentage by which the rates of wages under all awards might be reduced. They also gave every union the right to. apply to the court to show reason why it should be excluded from the general order. No reduction would take place in wages or salary of* any apprentice under the existing agreement, bus power was given the court, in the event of reduction being made in the rates under future agreements to review apprentices wages. The Bill did not affect existing contracts between employers and apprentices. Continuing, the Minister ■ said the Government had been vigorously accused of the repudiation of a breach of contract, and a breach of faith, but he pointed out that when legislation was passed in 1918 giving the court power Mr W. L. Martin: "Who is forcing the Government to take this action'?" to increase rates, there was no mention of repudiation or breach of faith.

Hon. S. G. Smith: "The stress of financial circumstances." Many Interjections. Mr W. E. Barnard: "Sir Otto NicII) oyer." Mr Smith Proceeded to revie wthc industrial legislation but was subjected to repeated interruption from the Labour benches. Mr Speaker thereupon warned the House that interjections of the nature commonly called heckling and contradictions were disorderly. He had allowed considerable latitude in the direction of questions. The Minister, continuing, said he had it on the highest authority in the country that the Aribtration Court award was not a contract. All that happened was that the court stepped in and fixed minimum rates of wages. There was nothing to prevent employers paying a higher rate. It was well to note that most awards had been fixed in more prosperous times. Concluding, the Minister said that if there was anybody in the House who nient was doing would inflict a hardship unnecessarily on -the workers ho would have no hesitation in walking over to his side of the House, but it, was his belief that the proposals would prove to be a benefit to New Zealand as a whole. If some better way could be shown he would have no hesitation in leaving his chief, but hi; was standing by him. He believed the Government had nothing to fear. Mr Seinple: You go to the country.

Mr Smith: I am not afraid to go to the country and not afraid to do my duty here, unpopular as it is. I stand by these proposals because I believe

honestly they are the best for New Zealand. , ~ , , ~, The Minister was applauded by his colleagues on resuming his seat. Higher Duty on Beer Mr Barnard concurred in tnc view of several other members that extra excise and customs duty on beer, wine and spirits would be a fairer way of obtaining the money required to meet the deficit. If New Zealand adopted the same duty as Britain it would produce an additional £1,626,496 a year, or, in the case of Australia, the scale would produce an extra £1,228,571. Mr Barnard added that there was a modern precedent for forcing down rents, even if they had to go to Italy .for it. Mussolini's government had recently reduced wages and salaries by varying degrees, leaving alone those under the poverty point. Mussolini had, at the same time, taken effective steps to bring down rents and the cost of living generally. Mr J. S. Fletcher (Independent, Grey Lynn) said he hoped he would be able to induce the Minister of Labour to be the second defection from the ranks of the United Party. He considered there wore better methods of getting out of the difficulties than those proposed in the Bill, and among them he suggested fixing liquor licenses on a barrelage basis instead of the flat rate. Increased duties on beer and spirits would provide additional revenue and do nobody any harm and do a lot of good. The Minister of Native Affairs had painted a gloomy picture of the state of the country's finances and had described the economy committee en deavouring to find ways of reducing expenditure. The methods described, Mr Fletcher remarked, had reminded him of a thinker trying to solde ra spout when the bottom was out of the kettle. There was scope for saving at least a million per annum in the capital costs of the Public Works Department if it were thoroughly reorganised and the inefficient factors eliminated. He urged the Government to force the oil com panics to reduce the price of petrol or alternatively to take ove r the monopoly of importing petrol in bulk. It would also be serving the country well if it impoitr-d crude oil and established its own refining plant. By tackling the od problem the Government could make available approximately £2,000,000 annually fo.r the development of the resources of the country. Excessive -Taxation

Mr A. E. Ansell said he believed that excessive taxation was ono of the greatest enemies labour had to-day. Every penny placed in that fund was taken from sources that fed industry. He did not say that a reduction was possible at the present time, but taxa ion should be as light as possible and a reduction should be the aim. Excessive taxation created a demand for money and therefore helped to keep up interest rates. Everyone agreed it was important that interest rates "should be brought down to a lower level. Mr K. S. Williams (Reform. Bay of Plenty),- replied to Mr Fletcher's remarks concerning the Public Works Department, and stated that evidence of efficiency of its work was to be found in the Hawke's Bay earthquake area at: the present time. He referred to the manner in which bridges and other structures had resisted the shock. Mr Williams said it appeared to him that the out of the present difficulty would be for the people to pay cash for necessities instead of deferring payment for them and paying cash for pleasures. Cost of Living

Mr J. A. Nash (Reform, Pahuerston North) said he was not prepared to accept the Government's proposals unless it could be shown that there was going to be a reduction in the cost of living. The Prime Minister had stated that there already had been a fall in living costs, but Mr Nash argued that it had been due to the drop in the price of primary products. It was not in the direction of low prices for farmers' produce that reduced living costs should be sought. Mr Nash complained that there was no graded system of sacrifice in the Bill. The cut should be based on ability to pay, and there should be provision for a revision within two yearn.

(Left sitting)