THE BUDGET.

Timaru Herald, Volume CXXV, Issue 18356, 29 August 1929, Page 8

THE BUDGET.

DEBATE IN HOUSE CONTINUED. Bj Telegraph-—Pr«*K Association. WELLINGTON, August 28. The debate on the Financial Statement was resumed by Mr C. H. Chapman (Wellington), shortly before the House of Representatives took the afternoon adjournment. Unequal Distribution of Wealth. Mr cnapinan sanl that the ex-.viinis- | ter of Finance (w W. 1J Stewart) nad realised the tenucncy towards excess. *c borrowing, but he had not substituted any alternative policy, ne hau not investigated the possibilities 01 a State Bang or any sinuiar means of niectuis the situation. Continuing his speech when the House resumed at 7.SU, Mr Chapman said the reason for the present iaulty distribution of wealth, and lor the tact that we had at the same time record production and record unemployment, was that we were following the out-of-date British system. If this country emulated the policy of the present Labour Government in Britain, there would be a vast improvement in economic conditions. There was no need to fear that Britain would lose in prestige as a resuit of the accession of the Labour Party to the Treasury benches, evidence having already been provided that the ideals of the Briton were being faithfully upheld by Mr Ramsay MacDonald and Mr Philip Snowden. Mr Chapman quoted figures demonstrating the seriousness of the unemployment position, and added that well over a million sterling was being spent annually on relief works. The question arose whether that money was being spent wisely, or whether It could not have been expended on productive work, instead of on merely relief measures. He thought the greatest contributing factor in the creation of unemployment was that nothing had been done to provide other work for those people who had been displaced as a result of the advance of science and invention in cities and farm lands. One reason for the drift to the city was the use of machinery on farms. The policy “back to the land" would improve the position temporarily, but it would not be a permanent remedy. Complete reorganisation of industry would be necessary before the problem could be solved. The Budget contained no proposals to meet the sftuation that had not been tried unsuccessfully before. Until a more satisfactory system of applying capital to the material of the country had been evolved, there could be little permanent progress. Mr Chapman asked the Government whether it stood for continuation of the present policy of granting substantial increases to highly-paic officials in the Public Service, while th< salaries of those men on lower scale: remained stationary. He further contended that the wealth of New Zealanc Justified additional taxation to provldi increases in pensions. He described th< primage duty as a most distastefu method of obtaining revenue, and suggested as an alternative arranging thi Customs regulations in such a waj that, in addition to obtaining revenue encouragement would be afforded fo] our secondary Industries. He believet protection to the motor-body building Industry would provide employment In

this country for a thousand men. At the present time it was the policy of the motor industry to import one chassis to every four completed cars brought into the country. He would not suggest that business should be disorganised by insisting on building all bodies in New Zealand, but the ratio of chassis to completed cars imported, should be increased. In addition to encouraging the motor-body building industry, impetus would be given to leather, glass, timber and other subsidiary industries. A Reform Stalwart. Mr H. G. Dickie (Patea) said Mr Chapman had referred to the fact that while wealth had increased, the workers had not benefited as a consequence. He would like to add that farmers also had not benefited. Bankruptcy statistics showed that the largest number of bankruptcies in any one trade, occupation, or profession had fallen to the lot of farmers. He admitted that labourers were next. Mr Dickie described ttye Budget as “one of broken promises—a Budget of borrowing and additional taxation.” He considered that more than a fair share of additional primage duty would fall on the farmer, who would have to pay it on his fertiliser, corn sacks, wool packs, fencing wire, implements, and in fact everything he required except his live stock. He considered the South Island railway extension would be a losing venture. It had been stated that it would save time on the journey between Wellington and Christchurch. At present we had one of the finest ferry services in the world, and in fact a man in Christchurch who wished to transact business in Wellington, was two days better off than a man in Taranaki, who had to spend one day in reaching Wellington and another day in returning, whereas a Christchurch lyan lost no time because he travelled by night. In the event of the main trunk line being completed, passengers by that route would have to spend eight hours in the train, and would then have to embark on the ferry crossing from Picton to Wellington. Apart from those people who would travel once over the new route for the sake of curiosity, he did not think there would be many passengers travelling between Wellington and Christchurch in this way. He had opposed completion of the work on the Palmerston North deviation, but he was equally opposed to reckless expenditure on this South Island venture. Referring to land settlement, he said the present Government had been in office eight months. It had placed twenty men on the land, and of these, two w r alked off. Furthermore, these were men who had been carefully selected. He was afraid the manner in which the Government was endeavouring to grapple with this problem would cost the country a lot of money. He was prepared to see the country lose some money on land settlement, but he wanted to see a scheme conducted on a sound basis. Mr Dickie expressed the opinion that had the United Party been in office it would have lost even more money on the returned soldiers settlement scheme. The difficulties that had confronted the Reform administration had been enormous, and two Ministers of Lands had suffered in health as much as some of the soldiersettlers. With so few practical farmers in the party, the present Government would have been even more awkwardly placed. It was inevitable that money should have been lost on soldier settlement, and money would be lost on the present land settlement plan, though it should not occur to the same extent. It had been stated the taxation proposals would not affect the small farmer. These proposals, he claimed, would deal a severe blow to land values, and the direct consequence of that fall in values would be that small farmers would lose all the equity in their land. He hoped that when the taxation proposals were brought down, the present rate of mortgage exemption would be allowed to remain. He considered the farmer had been bearing his fair share of the country's burden, when every aspect, including local rates, etc., was taken into consideration.

A United Champion. Mr J. T. Hogan (Rangitikei) said i

was incorrect to state that the primage duty had to be paid on wool-packs. It had been removed by Order-in-Council. Mr Dickie might have stated that, while me Reform Party has assisted wealthy farmers by removing the duty on woolpacks, it had not taken the duty off corn sacks, which poorer people had to purchase. Members hud criticised proposals to increase taxation, but w r as not that a reasoni.ole course to adopt, when members from all sides of the House were asking for increases in pensions and additional expenditure in other directions? It was necessary to find four millions a year for education, and in that respect the present Government v/as faced with a problem, because at present the country was not getting reasonable value for the money which it was spending in this quarter. The present educational system was not sufficiently educative. He considered the work of Ihe State Advances Department since the present Government had come into office was sufficient reason to justify its being given an opportunity to put its Budget proposals into operation. He urged the Prime Minister and the Minister of Railways to investigate the position of the railway workshops. He suggested that the policy of centralisation should be discontinued, and some of the smaller workshops should be reopened to give better scope for employment of boys trained in Technical Colleges throughout the country. He also advocated improvement in passenger trains on lines other than main routes, and expressed the opinion that the time had come for a revision of fares, which in some cases were too high. Mr Hogan said he welcomed the Prime Minis' ’r*s proposals to break up large estates and enable people to get back on the land. He had seen houses vacated and schools closed in parts of the country as a result of land aggregation, and if the Budget proposals resulted in these houses being again occupied and schools reopened, they would be of great benefit to the country. Mr Hogan suggested that land should be classified under three headings: (1) Land suitable and required for subdivision; (2) land now being used for sheep-farming and suitable for dairying; and (3) back-country land requiring capital and courage. There was not the same reason to penalise a man who held a large area of land which had required an enormous amount of capital, and which the small man would not have been willing to tackle, as there was to tax a man who was holding valuable dairying land. The former had rendered great service to his country. He considered it would be unwise to reduce the amount of mortgage exemption at present. It would only add to the number of people who had come off the land in recent years. It may be advisable to reduce the exemption later, but if such a step were contemplated, reasonable notice should be given. It had been suggested that it was the interest bill and not taxation that was troublesome to farmers, but even if that were so he did not think the House would desire to do anything that would increase the number of people leaving the land. If tt were absolutely necessary to reduce the mortgage exemption at present, he hoped the Prime Minister would not seek to lower it to less than two-thirds of the capital value of the land.

Mr A. J. Murdoch moved the adjournment of the debate, and the House rose at 10.17 p.m.