APPEAL IN HOUSE

Taranaki Daily News, 13 March 1935, Page 5

APPEAL IN HOUSE

MR FORBES ASKED TO ACT RESIGNATION SUGGESTED “MR. COATES IN CHARGE” LABOUR ATTACKS POLICY By Telegraph—Press Association.' Wellington, Last Night. On the third reading of the Mortgage Corporation Bill Mr. Savage said the Labour members opposed the Bill from the beginning because they were firmly convinced it had been introduced by a wholly discredited Government in the dying hours of its existence for the purpose of destroying the State Advances Department, which had played such a fine part over many years In keeping the rates of interest somewhere near an economic level. Labour was further of the opinion that there was no service that could be rendered by the proposed Mortgage Corporation that could not be rendered by the State Advances Department with better results to the whole of the people, including the borrowers. They argued that so long as the present borrowing system of finance continued the State could complete any borrowing transaction more economically than any subordinate part of the State, which in this case was a corporation. It also stated that as a result of more economic borrowing the State would be in the best position to carry, on economic lending. In doing their best to improve the Bill when they failed to defeat it, Mr. Savage added, Labour members with the assistance of the Independents voted against several clauses and moved amendments to others, but these were defeated. Opposition members took the view that no substantial assistance could be* given the farmers and others under the present system, and until such time as the State took full control of the money system, including powers of issue, the problems of the Dominion would never be solved. Labour members expressed the opinion that the main problem facing the people of New Zealand, in common with the rest of the world, was a shortage of purchasing power. LABOUR’S ATTITUDE. Mr. Savage proceeded to review the attitude the Opposition had adopted to various clauses and the reasons for doing so. Coming to the rate of exchange, he said there was no substantial reason for any variation in the rate of exchange between New Zealand and the outside world. Under present conditions of trade a high rate of exchange might play an important part in conserving overseas credits and might be used as a temporary means of subsidising New Zealand exporters, but a high rate of exchange must also limit British imports into New Zealand.

Taking New Zealand exports (excluding specie) for the two years ended December, 1934; as amounting to £88,349,000, £22,000,000 would be a fair estimate of the amount paid to date on account of the increased rate of exchange, and the Minister should not forget that that amount had to come from incomes which had already been reduced, either directly or indirectly by Acts of Parliament. The Minister of Defence had said that to guarantee dairy and wool farmers an additional sixpence a pound would take between sixteen and seventeen million pounds, and if cheese was to be included it would require about three times the total note circulation of all the trading banks. Just what the note circulation had to do with the r'-'oblem the Minister did not say, and ho conveniently forgot to mention that by the same rule of measurement the average yearly destruction of incomes by Acts of Parliament between January 1, 1930, and June 30, 1934, amounted to nearly five times the total note circulation.

With an air of mystery the Minister where the money was to come from and spoke about inflation, but he overlooked the fact that by wage reductions he had played his part in destroying in the aggregate over a hundred million pounds in purchasing power since January, 1930. If that hundred million had been allowed to remain part of the source of all taxation—the people’s incomes—it would have gone further than the full distance in meeting the farmers’ difficulties. INCREASED COSTS. - Without attempting to quote exact figures it would certainly not be an exaggeration to say, continued Mr. Savage, that on account of the high rate of exchange, Customs charges, sales tax, the present prices of tea, fencing wire, boots, etc., were at least 50 per cent, higher than they would have been if Labour’s policy was operating. Had the Minister forgotten that from the inauguration of the sales tax in February, 1933, until December, 1934, the total revenue received from that source was £3,508,404? From Customs and excise for the years 1933 and 1934 the total received was £16,609,843, which with £22,ooo,ooo'added for exchange made the grand total of £42,118,247. The alternative to raising the rate of exchange was guaranteed prices, definite trade agreements and the allocation of overseas credits for the purpose of those agreements. Control of exchange by a national banking system would enable the Government to make available to traders at par all the overseas credits required to give effect to the Dominion’s part in any trade agreement with Britain or any other country. - By what rule of thumb, asked Mr. Savage, did the Minister arrive at the conclusion that most other sections of the community should have guaranteed ii. comes but that the farmer must have his income fixed by the rapidly changing external conditions? Should not all sections who were giving useful service have some guarantee of minimum conditions? The farmer, he added, was entitled to the difference between the amount that he received in the markets overseas and the amount that it took to maintain the standard of living in sympathetic relationship with the aggregate of the Dominion’s production from all sources. Must the farmer, he asked, be content to car;y the economic loss which resulted from producing for export, which was the only means available to the whole of the people to meet their overseas obligations? Mr. Savage predicted that the Government would discover that it had found its way into a blind alley. The Act would have to be amended at every session of Parliament for years to come. MR. VEITCH’S APPEAL. Mr. W. A. Veitch (Ind., Wanganui) said there was grave anxiety throughout the country as to the effects of the present measures and other measures that were to follow. He suggested the Prime Minister should have stopped the Minister of Finance from proceeding with that unwise legislation. The Prime Minister should have resigned and advised the Governor-General to reappoint him. As a matter of fact. Mr. Forbes should have resigned when Mr. W. Downie Stewart resigned, but it was still within his power to make a stand, exercise the powers of his office and act in the interests of the people. Undoubtedly the Minister of

Finance had taken complete charge of the actions of the Government A Minister who was not the Prime Minister had taken complete control of the policy Of the Government. Mr. Veitch appealed to the Prime Minister to take the action which he alone had the power to take. Mr. W. J. Jordan (Lab., Manakau) referred to the exemption of the corporation from the payment of rates, and said the British Government had paid rates on public buildings, even on the Houses of Parliament. The debate was adjourned and the-. House rose at midnight.