POLICY OF DEMOCRATS

Taranaki Daily News, 17 October 1935, Page 12

POLICY OF DEMOCRATS

FRESH CAPITAL URGED PROPOSALS FOR DEVELOPMENT. STATE DEPARTMENTS TAXATION. The proposals of the Democrat Party should it attain power at the general election in November were described by the Stratford candidate, of the party, Mr. C. R. Finnerty, in his first election address at Ngaere last night. Mr. L. K. Tarrant was voted to the chair., Mr. Finnerty said the farmer had lost his one-time freedom and must now bow before the supreme authority conferred upon the Supreme Council of Agriculture, which body controlled every branch of his business. The “brain trust” of academic gentlemen behind the present Government continued to dictate the policy to be followed, and that policy by its ever-in-creasing disregard of the individual and the sanctity of contracts had proved tht Socialist tendencies of the present Government with no difference in principle between it and the Labour Party, which however, openly declared itself a Socialist Party with Socialistic views. For too long in the past fear of Labour had made them content to follow in the wake of the Government, but the time had come when the Nationalist Party had proved that there was no dissimilarity between the one and the other. The first thing to be done was to lighten the crushing load of taxation that industry might function again, said Mr. Finnerty. If that were done trade would improve and 'more men and women would find work. They must assist the present industries and develop new industries that could become self-support-ing. The principle of providing capital works out of revenue was a wrong one. People have got into, a state of fear, doubt and indecision caused by the present impossible conditions, and to create confidence and develop industry new capital must be provided. The Democrat Party did not propose to go in for extravagant borrowing, but it proposed to borrow sufficient money carefully to develop industry, give hope to the people and get them out of the conditions into which they had drifted. The country required a Government that would go in for a bold policy of development. This the Democrats proposed doing through a national council, supervising national, local body and private development. They included private enterprise and stated definitely that the policy would be to encourage private enterprise with financial assistance if necessary and thereby assist in a forward movement. The country could not become prosperous unless the citizens could use their capital in legitimate enterprise. The test of every proposal would be its ability to establish a permanent and self-supporting and economic work or business. Having won the approval of the proposed council, financial provision would be made through a national development fund. It did not necessarily follow that funds would be found for the undertaking, but if required assistance would be given either by a guarantee of principal or of interest. In all cases the Government would be guided by the circumstances of each particular case. Works must be sound and within a reasonably time, self-supporting. Private groups would be encouraged and would receive equal consideration with local authorities. By this means there could be no doubt that a considerable amount of employment would be found for the people. There was almost unlimited scope for development. Some of the public works which had been stopped could with profit be restarted, and many local bodies had sound schemes in view. HOUSING TO BE ENCOURAGED. There were schemes of housing, afforestation, irrigation, assistance to mining, encouragement of new primary and secondary industries, schemes for group settlement on the land and schemes for bringing back to production land now fast deteriorating. Schemes for housing should be encouraged where economic, as encouragement carried with it many other industries and caused activity amongst other trades. It was certainly not proposed that the State should embark on a large scale housing scheme, but assistance would be given to private enterprise in building to overcome, the very acute shortage of' houses for the people. Given the opportunity there was no doubt that there were people and business concerns that just wanted encouragement to come forward. It was proposed to finance those schemes by taking authority to borrow, and it was possible that from £5,000,000 to £8,000,000 might be required in the first year to get the schemes well started, and that up to £20,000,000 might be borrowed over a period of four years. I'ne amount borrowed would depend upon the number and extent of the schemes approved and the particular method decided on in financing. It was estimated that £8,000,000 would directly employ 16,000 and supply all materials, as well as giving employment for a further 16,000 persons required for the supply of materials and transport. That sum, therefore, would create work for 32,000 directly and possibly many more. The money distributed to those men by way of wages would stimulate the whole country and promote a general revival. As no work would be encouraged unless it could prove its ability to become self-supporting, in a very short time it was evident that responsibility for all obligations would disappear. He had no doubt that they could, under those proposals, put at least 40,000 back into employment at normal rates of pay during the first year, and therefore be in a position to make better provision for any balance of unemployed men. Aftei thorough examination and close investigation of every aspect of the question, they considered they y/ould be able to reduce the taxation by 2d in the pound from 8d to 6d and abolish the annual levy of £l. Included in Jhe' 6d in the pound levy would be an amount to form the basis of a national health insurance scheme. The plan would in a very short time cure the unemployment evil and greatly reduce the tax upon the public It would give hope to thousands of people who were now in a hopeless condition, struggling along with no future prospects and in many cases without even the bare necessities of life.. The interest and provision of a sinking fund would cost the country approximately £1,000,000 or only about one-fifth of the amount at present levied on the people to pay for and carry along a scheme that had proved itself unable to solve the problem. LOWER TAXATION’S RESULT. A reduction in taxation would cause an uplift in private enterprise and provide employment for many workers. In addition it was evident that unfair competition by State departments must cease. If the Government must resort to unfair interference by its various departments, it was not to be expected that private concerns could bear their share of the country’s burden. Taxation must be levied fairly on private and State enterprise alike, that the efficiency of State organisations might be thoroughly tested. That, coupled with the removal of many restrictions, would restore confidence which was necessary

as one of the primary steps towards recovery. The difficulties caused by the depression made it necessary for mortgagors and mortgagees to meet one another in negotiation. By mutual reason and forbearance many difficulties were smoothed out or overcome. There was no doubt that in many directions the adjustment commissions acting under the Mortgagors Relief Act had done useful work but the Rural Mortgagors Final Adjustment Act, however, had many objectionable provisions.

The stay order provisions were distasteful to mortgagee and mortgagor alike —to the farmer because he was placed under the budgetary system set up under the Act which placed him in a humiliating position under control of the severest nature and to the mortgagee because they allowed a probable confiscation of capital. Under those provisions the unfortunate small investor would be penalised in just the same way as the large investor. There was no doubt that the legislation, involving a deliberate breach of contract and confiscation of property had done a great deal to shake confidence and destroy farmers’ credit.

The Democrat Party would repeal those provisions in the Act which involved the confiscation of property and the humiliation of the farmer placed under “stay order” budget. The Mortgage Corporation of last session appeared to have been quite unnecessary. For many years the State Advances Department did' very useful work and together with private institutions was capable of doing all the business necessary. It was a matter for great regret that a department doing the useful work of the State Advances should have been sacrificed as it was. The sacrifice of that institution left the Government open to suspicion that an endeavour was being made to cover up large losses and that the duty of the new corporation was: to act as receiver for the State Advances Office. The Government transferred to ' the Mortgage Corporation £50,000,000 worth of State Advances and Land Department securities. These were to be refinanced at 4 1-8 per cent. According to the Budget figures there was a definite loss on the transaction of £600,000 per annum. That amount had to be made up by the general taxpayer. ' • It was a definite plank in the policy of the Democrat Party that it should do the utmost to ensure that secondary industries which could be developed upon sound economic principles should have the fullest possible support. The party believed that through its national development council it would be able to assist in the expansion of secondary industries, encourage the establishment, of new industries and further to give to all worth-while industries the protection necessary for their well-being. It was regarded as of the utmost necessity that industry be developed to the fullest if employment was to be found for the people. OTTAWA AGREEMENTS. The party intended to carry out to the full the intentions of the Ottawa agreements both in the letter and in the spirit, and would give preference to British and Empire products. It would lower tariffs wherever possible. The Democrat Party was definitely pledged to carry out to the letter the contract made by the Government with the civil services—to restore the fund and to see that no civil servant was deprived of his rights under superannuation and see that the long-promised re-grading of the civil service was carried out without further delay. The tourist trade was capable of immense development. By systematic development by the State and by encouraging private enterprise, it should be possible to develop tourist trade to such an extent that the trade would become one' of the greatest sources of wealth. Recognising, the immense return to be obtained from that source, the Democrat Party intended to use every effort to encourage and develop the trade. Unfortunately, for some time past part of the legitimate funds obtained by taxation and intended to be spent on the main highways had been diverted to other purposes. That was a wrong procedure, and if returned to Parliament he would strongly resist that sort of thing. The question of transport generally was a big one, and required careful investigation. It certainly appeared that private enterprise was being unduly restricted at present. Defence was again becoming a serious and vital question. The Democrat Party would strongly support the League of Nations, but would also carry out all arrangements made for the New Zealand division of the “ Royal Navy. In land defence it would do all possible to strengthen the volunteer service, and would find sufficient funds to keep the air force properly equipped and up to date. In New Zealand to-day there was no national health insurance and the Democrat Party had formulated a definite scheme, had closely investigated similar schemes and had adopted only the best of such as were now in existence. It had designed its scheme to co-operate with friendly societies and private insurance companies so that their legitimate activities would not be interfered with. The - scheme eliminated the evils of the panel doctor system and all other restrictions on the medical profession. All persons participating in the scheme would have complete freedom in their choice of doctors or specialists. No direct and burdensome tax was placed on the employer in respect of each employee. The present Government apparently favoured the system based on contributions by both the employer and employee. The Democrats did not think that system equitable and believed it would be most irritating to the individual. REDUCED WAGES TAX. To finance the scheme a contributory tax on the same principle as the unemployment tax but without the levies imposed thereunder would be used, he continued. The proposal is to alter the basis of the unemployment tax to include a contributory tax for the purpose of the scheme. The total tax would be reduced from 8d in £1 to 6d in £1 but the annual levy of £1 would be abolished altogether. The principal features, of the scheme were: Free medical specialist and hospital benefits, maternity benefits, sick leave pay allowance and some special treatment services. All contributors to the scheme and every one of the dependents would be entitled to the full benefits provided his income did not exceed £267 per year. National tuberculosis etjtitrol scheme and cancer control scheme were attached to the national health insurance. The health of children and malnutrition remedies would also be taken in hand. A superannuation pensions scheme would provide for payments on a similar basis but with an increase of 25 per cent, on the amounts of payments such as the present old age, widows’, miners’, blind and other pensions. As the property exemption allowance was too low the party proposed to increase the allowance. It was proposed to increase the scale of payments by approximately 25 per cent., also providing an allowance similar to the allowance made to incapacitated ex-servicemen as in the War Veterans’ Bill. They would include also a widening in the terms for allowance to wives and dependents of .returned soldiers. . L • v For returned soldiers the party S scheme provided for an increase of 25 per cent.

in pensions and also of the payment to them, of ordinary superannuative pensions at the age of 55 instead of 65. At the present time a returned soldier had to be in a position to prove that a breakdown was due entirely to war services. That condition was the cause of much injustice and many returned soldiers failed to receive assistance who were justly entitled to it. The Democrat Party intended to place the onus on the State to prove that a breakdown was not caused by war services. Much delay had taken place in carrying out promises made to the returned men but the party proposed to see that all obligations to returned soldiers were met at an early date. Contributory taxation together with contributions from the State would be adequate for those purposes. It was proposed to provide for a unified control of the education system in each education district and to revert immediately to the age of five years as the school commencement age. There seemed at present to be a growing tendency to omit from teaching the more practical subjects but the policy of the Democrat Party would be to pay more attention to subjects that would assist the student in after life in pursuit of a livelihood. One of the most distressing features of conditions in the country to-day was the number of young people whose present and future were being ruined for want of opportunities but the party was confident that when its policy was initiated it would be able to find profitable employment for young people. “Most people must have been struck during recent years by the enormous waste of time and public money caused by the present proced’re of Parliament,” Mr, Finnerty said. The Democrats proposed to attempt to amend the procedure and to reduce the number of members in the House if possible. They believed that there was room for much improvement in the method of appointment to the Legislative Council and a much wiser choice of members could be made. They proposed to bring into operation the principle of elective representation in the Legislative Council with a number of direct appointments. The public accounts of the country had been the subject of severe commenl by the Auditor-General in his reports tc Parliament and some of his comments were interesting and direct if not very disturbing. In his report presented tc Parliament in 1933 he said: “A definite tendency has been noticeable recently tc depart from established control of Parliament over the public expenditure There" is a tendency to give statutory powers to members of the Government and others so as to give them the power to appropriate public monies which is constitutionally the prerogative of Parliament.” “MINISTER SOLE JUDGE.” In connection with section 6 of the Finance Act 1932 he said: “The effect is to enable tire Minister to appropriate the monies of one statutory fund, for the purposes of another statutory fund, and apparently the Minister, instead of Parliament, is constituted the sole judge as to the propriety of the transaction and the Audit Office has no power to object, even though it might be of the opinion that the transaction is improper from an accountancy point of view.” In another part of his report the Audi-tor-General said: “It would appear, therefore, that Parliament has divested itself of the power to control the expenditure in cases such as those above mentioned, and the Auditor-General has been divested of the responsibility placed on him as an officer of Parliament of satisfying himself that the limitations hitherto placed by Parliament on such transactions were being observed.” The Minister of Finance was apparently impatient of Parliamentary control, said Mr. Finnerty. By the exercise of the powers given to the Minister and the curbing of the Auditor-General the Government had been enabled to conceal many things, among them the effects of the exchange policy. If put in charge of the country’s affairs the Democrat Party was pledged to carry out the business in a proper and constitutional manner.

The first and most imperative step to be taken by the Government of the country to-day was to reduce the enormous amount of taxation. In 1928, a year before the depression started, when there was comparative prosperity and before the drastic wage cut had been made and Government. expenditure was maintained at peak level, taxation amounted to £16,500,090. The Minister of Finance’s latest Budget showed that taxation had now reached a total of over £20,000,000, and that without the unemployment tax. It meant that in a short term taxation increased by over £8,000,000 —a sum that would be sufficient to keep all the unemployed in work at standard rates of pay. Mr. Finnerty told Mr. W. H. H. Young that the amount of over £500,000 extra that had to be provided on the loan repaid at London was incurred because the New Zealand pound was not equivalent to the English pound.