THE BUDGET.

Sun (Christchurch), Volume II, Issue 488, 2 September 1915, Page 12

THE BUDGET.

DEBATE RESUMED. A LABOUR VIEW. [From our own Parliamentary Reporter.] WELLINGTON, Sept. 1. The debate upon the Financial Statement was resumed in the House of Representatives to-day by Mr J. McCombs (Lyttelton), who congratulated the member for Hutt on the speech delivered on the previous evening. Referring to the National Register, he said that some of the proposals of the Government under that head were not reasonable. He could discover no basic principle in the . new taxation proposals. The Minister of Finance was collecting the required money from many different sources than ona-third was

'to come from land and.incomes. The 1 balance would be paid by the public generally through the Customs . and the State services, and it did not appear that any effective attempt was going to be made to reduce the cost of living. He was not going to oppose any of the. war legislation ' of the National Government, but he believed that national ends would • be best served at the present crisis by the operation of the national ' principles for which the Labour Party stood. The Budget contained a totally misleading statement calculated to hold up the price of flour. The statement was to the effect that there • was still a shortage of wheat, whereas the figures placed before the House showed clearly that the • supply of wheat .and.'flour was abundant. The. figures showed a sur r , plus of two months' supply. A GENERAL CRITICISM.

He criticised th<T proposed increases , in the graduated land tax, : arguing that they were altogether ineffective. The Budget did not do what it professed to do—which was to "get out after" the big man who could afford to pay. The payers of * the tax numbered 6738 and they were -going to pay the sum of £67,940 annually. During the last 6 years the V valuation of their lands had increased from £58,000,000 to £87,000,000, an increase of £29,000,000. If the taxation were laid on this commu-nity-created it would amount to about £215 per head of the land owners, whereas the Budget . proposed a tax'of only £lO per head. He went on to criticise the propos- ■ cd taxation on motor cars, which ■■■', lie contended removed the protection previously afforded to local coach-builders who turned out car * Ibqdies. The new would have * the effect of increasing unemployment at a time when every man possible, should have work. And then there was the question of the , cost of living. What had the Government done? It had proposied in the Budget to widen the powers of municipal bodies to establish city markets, refrigerating plants, etc. The Government was simply passing oit its duty to the "other fellow." The-increase in the price of groceries to the small householder was

ovgr 22 per cent, but the rich landholder had to pay in increased taxation only about 2h per cent. He on to advocate an elective executive, and proportional representation in the House. , The hon. member went on to .remark that the proposal for the National Government had emanated from the member for Eden, who had been backed up by Mr W. Downie Stewart, who had alluded to the possibility of the Labour Party coming into more prominence in consequence. TJie Budget contained false information, calculated to hold up the price of flour, it being represented that there would be insufficient wheat to carry on until next harvest. What was the proposal of the Government to reduce the cost of living? They were about to confer . powers on the municipalities to establish meat and fish markets, as 'well as bread factories. So far as Customs taxation was concerned the cost of living was to' be increased. THE VOICE OF JACOB.

Mr G. Witty (Riccarton) discerned in the Budget "the voice of Jacob and the hand of Esau." The Minister of Finance had taken the Budget, intended to be delivered by his predecessor, and carried out a levelling down process in a very fair manner. Because legislation, so far, had been allowed to go through "\Wiich should have been criticised, it must not be supposed that members were oblivious to defects in regard to the finances. Their eyes were ntff shut to the fact that expenditure had been allowed to increase enormously. . As to State advances, it was to be hoped that no shrinkage would interfere with the accommodation of the small man. He had already had a good deal to say on the subject of wheat, and he desired once more to emphasise the disadvantage resulting from blundering statistics. In relation to defence matters he was afraid that there had been room for exploitation in the past, and it would be well that the advice of some expert should be obtained on the subject of clothing and boots. He noted that, in regard to the land tax, occupiers of their own sections -were excluded, and it would be an improvement to tax occupiers instead of owners. Little or nothing

had been , done in taxing luxuries. Something ought to be done to ascerx tain exactly who had directly bene-

fited by the war. It must have been with much regret that the Minister of Finance had resorted to a halfpenny increase on all postage with the exception of newspapers. The 100 per cent, increase on circulars would interfere very considerably with business in that channel in the immediate future. He was afraid that the taxation as proposed would result in stock being driven to market, so that -there would be less traffic on the railways. THE BEER TAX. He could not understand the sense of the new beer tax. As to the duty on non-alcoholic drinks, the teetotallers would not be reached at all, though he would not advocate anything going on tea. As to the tax on cheques, he would like to see it Id up to £5 and 2d and 3d on large amounts. In regard to receipts, also, the stamping ought to be on a sliding scale. In death duties enough was not being got out of the large estates.

The kerosene and petrol duty was a great mistake, for it hit the small men very heavily. 'Why not put the tax on the motor car, or its driving capacity? Why tax only one form of sport—racing? Why not tax, the picture shows and theatres? For the sake of the youth of the country it would be wise to put a substantial duty on cigarettes. An Hon. Member: What do you smoke?

Mr Witty: I have not time to smoke. , Another thing I would (Jo is that I would put a tax on bachelors, who are not going to the front. Those who have been rejected, as being unfit for service,'l Would of course exempt. FRIENDLY, BUT CRITICAL.

Mr C. A. Wilkinson (Egmont) said that, personally, he was Mendly to the Government, and wherever he could support it he would do. At the same time he reserved to himself the right to criticise the measures brought forward, and Ministers should understand that members were entitled to that privilege. He would suggest, in connection with future Budgets, that the reading of them should be discontinued. It took up too much time. It would dq better for the Minister of Finance simply to give a summary of the provisions contained in them. In thp Budget they found they had to face a falling revenue. They had heavy obligations and they were faced with a deficiency for the first time for many years. The position was a serious one. When the figures were looked into a total deficiency of £1,761,000 was shown for this year, and, towards that, the only, additional revenue expected was £200,000. On the Treasury's own figures a deficiency of over three-* quarters of a million had to be faced.

So far as the estimates were concerned, surely, when a great war was on, and when there was the necessity for economy, they might expect the Budget to contain some bold proposals in regard to retrenchment. Instead of that they found increased expenditure proposed in the statement. Sir Joseph Ward had alluded to the necessity for vigorous treatment and inflexible courage, whereas the Budget was one of "timidity, and lacking in courage.' It was a Budget of pinpricks, instead of containing, as it' should, bold and statesmanlike proposals. : An Hon. Member: Tell us one of yours. '• A FEW SUGGESTIONS. Mr Wilkinson said he would give a few as he went along. The Budget was not a statesmanlike document, and had fallen short of expectation®, even if it was the combined product of the best brains on both sides. Curtailment of expenditure was inevitable in the near future, and the Hoijse would have to face it whether it liked it or not. Unprecedented taxation was going through the House, without hardly any , protest. No one knew the extent of the crisis now being faced by the Dominion, and the country was looking to the House to give it a lead in the way of retrenchment and economy. In 1887, when a financial crisis occurred, the salaries of the Governor, Ministers, and members of Parliament were all cut down, and this was an example which might be followed now. AU Public Servants in repeipt of over £SOO a year should be prepared to have their salaries reduced by at least 10 per cent., and members of Parliament should also have their honorariums reduced. (Ironical hear, hears.) There were many other directions in which the Government could save money, and, altogether, these economies could be made to reach £1,000,000. He objected strongly to asking farmers to provide incometax returns. These would be very difficult to make, and many of the incomes returned would not be taxable, as very few small farmers were making a profit which could be taken. CUSTOMS AND HOTEL FEES. With regard to a Customs taxation, he was of opinion that the proposed new duty on spirits was not big enough, while that on beer should be twice as much. There should also be some change in the system of licensing hotels. At present the biggest hotel in the Dominion paid practically the same fee as the smallest. There should be some graduated scale. The tax of 4d per gallon on kerosene was excessive and oppressive, and would bear very heavily on many people in the country who had no other source of light-

ing. He thought that the Government would be wise to remove the proposed duty from all mineral oils. He did not see why a share of taxation should not be placed on sugar. The sugar company was making large profits, and its arrangements with merchants constituted a monopoly of a dangerous kind. Then a comparatively small additional tax on cigarettes and cigars would produce an extra £50,000, and he regretted that the Government had not made a larger levy on racing clubs' stakes. The attempt to double the telephone receipts, at the expense of the country people, would defeat itself, since the farmers would use the telephones less. STATE NOTES AND MONOPOLIES. He strongly advocated a State note issue, as in America and Australia. The smallest note in the Dominion was for £l, but, in Canada, State notes went down as far as 1/-. It would pay the country handsomely if the Government went in for a note issue.

The time had arrived when the State should step in and prevent private monopolies. As time went on these would grow, ever and ever stronger, and now was the time to cope with them. The State should have control of the great moneymaking monopolies. - LOOKING BACKWARDS. Mr J. Anstey (Waitaki) complimented the Minister of Finance on his efforts to place the burden pn those best able to bear it. The previous speaker had advocated economy by way of the reduction of salaries in the Public Service, and had instanced what took, place in the time of Sir Harry Atkinson, but what Mr Wilkinson forgot to say, however, was that when these reductions were made they, were more than counterbalanced by the reduction ih the country's production. What the Government should do was to follow the example of Mr Ballance, and try to increase the production of the Dominion. He regretted that the Budget did not give adequate recognition to the efforts of the public in the matter of contributions to patriotic funds. He also objected to the manner in which the Government was credited, in the Budget, with dealing with the wheat supply last year. The Government should have imported wheat when it was at a fair price, and not have waited untrt the price was exorbitant. Under these J circumstances, the Government was deserving of no credit. The Prime Minister: What about your proposal to export? Mr Anstey : The millers could not possibly operate in the market present, because of uncertainty as to what w,as going" to take place. If there vstas a shortage of wheat the Government should say sp, and then the people would know where they were. If there was a surplus, there was no need for the present high prices. There were several alterations in the Budget which would be ; of advantage to the Dominion. The proposed increased taxes on petrol and kerosene were not fair, and he thought it would be better if revenue were found by way of land tax and mortgage tax. TAXATION OF LAND. \ The farmer was not the mean man he was usually made out to be. He himself was a farmer, and paid both the land tax and the mortgage tax, but he was prepared to see them both increased, rather than that some other of the new proposals should be adopted. He thought that the whole system of land taxation should be revised. The late Minister of Finance had boasted that the graduated land tax had broughj: in an increase of £40,000. This was really a confession of failure. The object of this tax was not to raise revenue, but to break up the large estates. He would like to know why it was that the proposed tax should be laid'on country land only. Sir Joseph Ward: I shall lay a statement on the table of the House to-morrow which will show you why. Mr Anstey said that the graduated land tax had not fulfilled its purpose in breaking up the large estates, as there were, to-day, 590 more estates paying this tax than there were a year ago. The Minister was not likely to realise the sum of £250,000 a year, which it was estimated to raise, from the income tax on farmers. Many small farmers were in such a position that they could hardly make both ends meet; in fact, they scarcely made fair wages./ Mr Wilkinson: Especially in a bad year. FARMERS NOT BOOKKEEPERS. Mr Anstey asked how many farmers there were who kept books. It would be almost impossible to get a computation of the income of farmers. There was also the question of farm implements. In many cases the farmer's motor car could be regarded as a farm implement, just as much as his dray or his plough, but would it be so considered? With regard to the increase in the charge on telegrams, he was afraid that such a tax was liable to defeat its own purpose, as those who were used to sending telegrams would cease to do so. The experience of penny postage showed that revenue increased when the charge was decreased. He feared that the additional charge in telegrams would mean a falling-off in the number of telegrams. Sir Joseph Ward: That has been provided for in the estimate. Mr Anstey went on to-contend that there should have been a tax

on tickets for theatres, picture shows, and other entertainments. He was also sorry that there had been no increase in the rates for Press telegrams. He was strongly opposed to a tax on motor cars. The day had long gone past when the motor car could be regarded as the rich .man's luxury. If there must be a tax it should be on tyres. Then the man who used the road most would pay the most tax. He also opposed the tax on petrol and kerosene; this was purely a class tax, and he advised the Minister to.aban-

i altogether. He was sorry that the Minister had found it necessary ! to increase the tax on cheques, which were a very handy form of currency. WHAT MIGHT BE DONE. There was still a large field of ' profit which had not yet been touchj ed. Ther.e were, for instance, the big shipping companies, and also the banks, which were making profits far greater than .could be justified. There were also the land speculators, and the great monopolies, such as that which had cornered the sugar trade. He could see nothing in the Budget to touch these people at all. He was sorry to discover no indication in the Budget or the Estimates that the Government proposed to exercise economy in the Public Services. Expenditure had been going up by leaps and bounds in "recent years, but it did not appear that the Government was going to make an appreciable .reduction at any point, in spite of the exigencies created by the war. The increase of the public, expenditure over the preceding year had been £205,000 in 1910, £352,000 in 1911, £997,000 in 1912, £741,000 in 1913, £743,000 in 19,14, £553,000 in 1915. The figures suggested that there was ample room for economy. In conclusion, Mr Anstey said he hoped that the Minister of Finance would agree to amend the taxation proposals in the direction of putting a larger share of the burden on wealthy persons and institutions and on delicacies and luxuries. A SAVER OF LIVES. Dr H. T. J. Thacker (Christchurch East) said that New Zealand did not expect her boys to come back from Gallipoli wearing Turkish clothes, and the Liberal Party did not expect its leader to come back with any Tory or Reform notions. Tf?e National Government was simply a temporary linking of two distinct parties for war purposes, and it had been made quite clear already that the presence of the Leader of the Opposition in the Ministry had been a source of great strength. After referring to the work of the British Fleet, of which New Zealand's gift battle cruiser formed a part, Dr Thacker said that he took credit for the reorganisation at Trentham Camp. He believed that he had saved many lives by the representations he had made regarding the unhealthy condition of that camp in the early part of the session. He took exception to the statement of the Trentham Camp Commission that the camp Jtiad not been the cause of the outbreak of cerebro spinal meningitis. A suggestion had been made that the infection had been brought to the camp by carriers, but the most dangerous carriers were flies. He was glad to notice, however, that the Minister of Defence' was now adopting a more reasonable attitude in connection with the camp. Proper facilities for washing were still needed in Trentham. He felt that slights had been cast upon the medical profession, particularly in connection with the medical officers io the camp staff, but he had no doubt that a remedy for that trouble would be found by the new head of the medical service—General Henderson. GERMANY'S INDEMNITY TO N.Z. Dr Thacker proceeded to suggest that New Zealand's share of the war indemnity to be paid by Germany should be used to establish hospitals for defectivies, and to remove the conditions that produced defectives. There was an uncomfortable feeling throughout the Dominion that the presents sent to soldiers did not reach them, and he would commend this matter to the attention of the new Minister of Munitions. With regard to education, it ought to be recognised as one of the pillars of a nation, and he would appeal to the Minister of that department to make the education of New Zealand more technical. Let the children adapt themselcves to the environment which they chose for themselves. The teachers should not be called upon to give instruction in too many subjects. There was much advice he had to give to the new Minister of Education, but he did not wish to overload him, as he was not being paid for his services, which was not a correct thing.—(Hear, hear). The salaries of Ministers should be pooled and fairly divided. In conclusion he wished to say' that when the day was fixed for the debate on the findings of the Trentham Commission, he would go more fully into details regarding the camp. The debate was adjourned on the motion of Mr J. H. Escott (Pahiatua).