NO CONFIDENCE MOTION.

Timaru Herald, Volume CXXV, Issue 18350, 22 August 1929, Page 12

NO CONFIDENCE MOTION.

New Turn In Budget Debate. MR COATES PROPOSES AMENDMENT TO TAXING PROPOSALS. By Tnlegrapb—±**o*3 Aaiociatiotv. WELLINGTON. August 21. After general business had been dealt with this afternoon, by the House of Representatives, the debate on the Financial Statement was continued. Too Much From America. Mr E. F. Healy (Wairau) said he was heartily in accord with the views expressed in favour of raising the tariff barriers against heavy importations of goods from the United States. He regretted that many items, for instance, motor-bodies, trotting sulkies and harness, etc., that could be. and were, produced in this country, were imported to such an extent from outside. He considered that the heavy importation of American films was another problem. which should be given earnest consideration. Mr Healy said he had on previous occasions referred to the Union Steam Ship Company in connection with the opposition to the South Island Main Trunk Railway. Since then he had been informed by an officer of that company that it was not in any way opposed to this project. as it would have an increased Wellington-Picton service in the event of the railway being completed. Referring to land settlement, Mr Healy said he was in favour of the inclusion of a hardship clause in legislation regarding increased taxes. There would be cases, admittedly very few,, in which taxation changes would have serious consequences. He voiced his support for the Government’s proposals. He considered most of the cases in which reduction of mortgage exemption would cause hardship would concern people who had purchased land too dearly during the boom, and had been in a precarious position

since the slump some time ago. They had had big mortgages, and the only 9 incentive that had helped them to struggle on had been the fact that a large amount of their own money was bound up in the properties. They had had credit from stock firms, which had enabled them to carry on, but they had made no progress, and were really in the same position now as they had been seven years ago. Mr Healy referred to the South Island railway extensiod from a land-settlement point of view. He said there were millions of acres in Marlborough that were already developed, and carried no noxious weeds. All that they required was more people for closer settlement, and a railway would be an important step towards achieving this end. Mr Healy complimented the Minister of Lands on the Westella purchase. He said that settlers there were of the light class, and at the satisfactory prices which had been paid for the land, they could not fail to do well. He criticised certain land purchases in connection with the Returned Soldiers’ settlement scheme, and expressed opinion that the whole question of ioldiers’ pensions should be reviewed.

A Disclaimer. Mr W. J. Poison, rising to a point of order, said statements had been made that he had claimed to be expressing the view of the Farmers’ Union. He denied having made any such claim. Political “Sham Fight.” Mr E. J. Howard (Christchurch) continuing the debate, said he had been interested in Mr Healy’s critic- l ism of certain purchases of land for returned soldiers, and he would like to see the whole matter investigated by a Commission, to determine who had sold land under the circumstances outlined, and whether they had been justified in making such terms. He reiterated the view expressed by previous Labour speakers, that the present debate was a “sham political fight.” The House adjourned at 5.30 p.m. The House resumed at 7.30. Mr Howard, continuing, said that in the past few years members of the present Government had voted consistently with Reform on all fundamental issues. It had been the efforts of the Labour members that had drawn public notice to various aspects of Reform legislation, and had brought about the defeat of that Administration. He could net see any difference between the Reform and United Parties. Referring to railways, Mr Howard said the maintenance of roads had cost three million pounds, and of this the taxpayers had had to pay two millions. Motor-cars had contributed less than one-third of this cost. There would be considerable complaint if taxpayers were asked to pay two million towards • the annual cost of the railways. There was a good deal of American propaganda work in the country at present, urging that railways were out of date, and advising us to buy American motor-cars to replace them. He recommended the use of Diesel electric engines to make branch railway lines paying propositions. His one regret was that this would decrease the consumption of New Zealand coal, but he advocated lively research into the possibilities of coal tar. AMENDMENT MOVED. The Hon. J. G. Coates said there had been many references to the balloon loop, but not one of the critics had properly investigated the reasons for it. It had been decided by a Commission that the construction of this line would be to the economic advantage of the railways, and that it should be taken up to Kirikopene. It opened out all the valleys in the vicinity, but there had not yet been time for the benefits anticipated to materialise. There had been references to the cost of this work, but the cost had surprised even those who had formed the most extravagant estimates. The whole country had had to be broken, and it had started to move directly it had been broken. The same fate might attend almost any railway undertaking. If the Government really thought there was anything faulty in the recommendations of the engineers who had reported on this work, why was it depending on their report on the South Island extension? It had been shown, Mr Coates added, that the balloon loop at Kirikopene would cut down operation costs and save shunting and terminal work. Mr Coates then referred to the subject of disabled ex-service-mcn. He said he agreed that it was time the country undertook fresh investigation into the position of the men who were now breaking up as a result of war services. He relied on sympathetic treatment from all quarters. He thought Si:* Jo~eph Ward had overstressed the deficit at the end of last financial year, and had been endeavouring to use it to cover up his failure to carry out his election promises. The Reform Party had promised its assistance ;o the Government, but instead of appreciation, it had been confronted with charges of maladministration. Sir Joseph Ward had promised to reduce taxation, but the Budget held out no hope in that direction. On the contrary. it indicated increased taxation. Mr Coates asked was Sir Joseph Ward justified in including in last year’s expenditure £156.000 spent on renewals of loans? These loans had been renewed before it had actuallv been necessary.

The Prime Minister had taken advantage, and had rightly done so, of the state of the money market, but was he justified in charging up this cost in last year’s accounts? Mr Coates said a raid was to be made on the funds of the Public Trust Department, and grants to the Highways Board, but if the Prime Minister had been on a raiding expedition, why had he not taken a portion or the whole of the £523,000 which stood to the credit of the Post and Telegraph Department last year, which had been carried to the depreciation account. When this Department’s revenue had been separated ! from the Consolidated Fund, it had never been anticipated that we would ! pay in depreciation over a million i pounds in two years. Sir Joseph Ward: “Why did you pay the first £500,000 to that account?” Mr Coates: “Because there was up to that time no need for it to meet a defleit.” Mr Coates continued that it had been deemed wise to set the first amount aside for depreciation account, but there was no need for Sir Joseph Ward to add a similar amount next year, in fact when the Finance Minister was faced with a deficit he should have taken at least a portion of this sum. He could have taken the whole amount and completely adjusted the position, but failing that there was no reason why he should not have taken £300,000. Mr Coates added that Sir Joseph Ward had made too much of the deficit, and had not accepted the opportunity at his disposal of adjusting it. Instead he proposed to increase taxation to raise more money. The first quarter’s revenue was a further indication that there would be no need of increased taxation to balance next year’s Budget. Even had it been necessary to raise more money, he did not agree that Sir Joseph Ward had selected the right method. He also advocated caution in regard to construction of the Midland railway. He said the country had had a bad shake recently, and a very careful review of the position should be made before a huge sum of money was spent on a railway in this locality. So keenly did he feel that the Government’s proposals were unjust, that he would move:—

“In the opinion of this House, the taxation proposals are not acceptable without further revision and amendment, on the grounds that: (1) Increase in the primage duty will increase the cost of living, and if further customs revenue is absolutely required, the duty should be imposed on certain selected luxuries of foreign origin. “(2) That the proposed increase in land tax amounts in some cases to a confiscatory single tax, absorbing the whole annual income of the property without regard to whether such property is capable of subdivision or not; moreover, the reduction in mortgage exemption will impose grave hardship on many farmers. - \

“(3) That if any change is to be made in taxation on that class of farmers contemplated by the Budget, it should be based on the principle of capacity to pay, viz., income tax, with adequate provisions for preventing aggregation. “(4) Experience has shown that proper classification of lands suitable for subdivision is essential before penal taxation is imposed. “(5) That the proposals as to highway revenue are a breach of faith with . tfce motorists of New Zealand, who agreed to the imposition of special taxation on condition that no part of this taxation was to be available for general purposes of the Consolidated Fund.” Mr Coates denied a suggestion that the attitude of the Reform Party was directed towards obtaining the support of the Labour Party. The purpose of the motion was to record disapproval of the Government’s taxation proposals. The amendment was seconded by Mr A. E. Ansell (Chalmers). Accepted As No-Confidence Motion. Sir Joseph Ward stated that he could accept the amendment in onlv one way, and that was as a motion of want of confidence in the Government. That was the attitude he would take up till the amendment was disposed of. “It now only remains for me to move the adjournment of the House” Sir Joseph Ward added. Mr Coates asked why this was necessary. Sir Joseph Ward said the Government was not going to sit by while the financial debate continued with a want-of-confidence vote pending. Mr c. A. Wilkinson moved the adjournment of the debate, and the House adjourned at 9.45.