THE WAGES CUT.

Timaru Herald, Volume CXXXIV, Issue 18830, 19 March 1931, Page 8

THE WAGES CUT.

Discussion On Bill Resumed. MR COATES SUPPORTS GOVERNMENT. By Telegraph—Press Association WELLINGTON, March 18. The debate on the second reading of the Finance Bill was resumed by the Hon. J. G. Coates, who said the real question to be faced at the moment was how the country was to pay its way. Should the position be met entirely by increased taxation, or were the Government’s proposals the wisest? He thought the Prime Minister's statement last night had brought the country face to face with the real problem. Could the taxpayers continue to bear the heavily-increasing burden? Any method of increasing taxation did not tend to decrease the cost of living. It merely passed the burden on. The main trouble appeared to be the failure in so many cases to balance private budgets. In the Dominion there were many people today who would be prepared to initiate enterprises of various kinds if it were not for the question costs. Private budgets and the Government Budget were closely related, and It was essential for both that some course should be followed, which would reduce costs to the community as a whole. He felt confident that civil servants would be quite prepared to take their share of the burden, so long as it was applied fairly. Continuing, Mr Coates said we would have to place our primary producers in a position of being able to market their goods at world prices. New Zealand depended upon the volume of its exports. As a result of a shortage of money coming into the country, the business man, the worker, and everybody else was affected. It was essential that primary producers should be enabled to maintain their assets and keep up production, otherwise the country would be in an even worse position in respect to payment of salaries to civil servants and everything else. It was necessary that steps should be taken before the end of the present session to re-establish producers on a sound footing. They must be able to obtain credit, and he welcomed the Bill the Prime Minister had introduced for relief of mortgagors. Mr Coates said he was forced to the conclusion that the time had arrived when it was no longer possible to meet the fall in revenue by way of taxation, and the responsibility rested with the Government to find some other way. Referring to the proposal to reduce salaries, Mr Coates said a Commission should be appointed to review cases of hardship, particularly in respect to bread-and-butter men with families. They should have a right to put their case before a Commission, which should recommend to the Government a method of overcoming the difficulty in individual instances. It would be a bad thing for the country if it was allowed to continue to drift. He added that civil servants would be in a worse position than ever unless action was taken to reduce costs. He had seen the private budgets of civil servants, and realised their difficulties in the face of reduced eariv* ings. The Government should make a straight-out statement to the country that it expected rents to be decreased. He had already expressed his opinions regarding interest rates, and wished to emphasise that a decrease was unlikely so long as the Government was in the market offering 5i per cent. Mr Holland's Criticism.

The Leader of the Labour Party (Mr H. E. Holland) said he did not think he would be iri error if he described the speech of Mr Coates as the most disappointing contribution to the Government’s proposals. He had found it difficult to follow the Leader of the Opposition’s remarks, but he gathered that the Reform Party intended to support the ten per cent, reduction in salaries proposed by the Government. Mr Coates had indicated that there was little local consumption of primary products of the country, but he had not gone very deeply into the question. Mr Holland stated that the major portion of the butter and cheese produced in the Dominion was exported, but only a small percentage of 'beer: Little more than half the mutton was exported. The bulk of the lamb was for export; less than half the pork went out of the country; and of all other commodities very small percentages were exported. When the whole thing was boiled down, it showed the enormous quantity of primary products consumed in the Dominion. When the Leader of the Opposition had given the House to understand that the Reform Party would support the Government, he had insisted that there should be a hardship clause in the Bill. Mr Holland asked whether that was a joke. Members would remember the hardship clause inserted in the Taxing Bill of 1922 after a strong fight made for it, and would also remember that it never had been used. Continuing, Mr Holland said that Labour had kept the Reform Party off the Treasury benches for two years, but by some process Reform had succeeded in getting the Government to agree to their proposals. The Labour Party now wanted to get, both Parties 'off the Treasury benches. The Prime Minister had gone to the Old Country pledged to no wage reduction, and his Acting-Prime Minister had told the House that as long as the United Government was in office there would be no wage reductions, but as soon as Mr Forbes returned he started to talk of reducing wages. Mr Holland inquired who were the authorities Mr Forbes had consulted in London.

Mr Forbes: “Absolute necessity.” Mr Holland said the Prime Minister himself had previously stated that there was no need for wage reduction.

The House adjourned at 5.30 p.m. The House resumed at 7.30 p.m. Mr Holland, continuing, asserted that a reduction in civil servants salaries to the extent proposed was far from being in accordance with the principle of equality of sacrifice. The Prime Minister had referred to reduction of the cost of living, but was contemplating no legislative action to ensure a fall. The anouncement that the Industries and Commerce Department had been instructed to watch the position closely would not satisfy the majority of people. Replying to the Prime Minister’s statement that Arbitration Court awards did not constitute a contract, because a worker could put on his coat and walk off if he did not like the job, Mr Holland said awards were made by the Court to embody contracts made by employers and employees. The employer on one hand reserved the right to dismiss a man if he was unsuitable; the employee on the other hand had the right to leave if the job was unsuitable. Both actions were subject to notice, and constituted part of the contract. The Government’s attitude would have the effect of indicating to workers that contracts embodied in Arbitration Court awards had no value in the eyes of the Government. Mr Holland expressed the opinion that if the salary of one man in the public

service was to be attacked, the salary of all should be attacked. It was not equitable that Judges receiving up to two or even three thousand a year should be exempted. He drew attention to the fact that the Bill did not propose to increase wages if at any time during the period they were reduced there was any substantial alteration in the cost of living. Minister Speaks. Sir A. T. Ngata said a great deal had been made by Labour speakers of assertions that the Government had gone back on its promises. That was scarcely the position. It was simply a case of the representatives of the people facing the facts of the present situation. That was the unfortunate attitude that the Government had to take up at the present juncture. Instancing directions in which the Government’s attempts at economy had been strenuously opposed by various members. Sir Apirana Ngata said members all advocated economy, but never economy in any of the public services in which they themselves were interested. The Labour Party must concede that the task of effecting economies was an unpleasant one, and could rest assured that it would not be undertaken unless it was absolutely necessary. It had been asserted that the Government had been influenced by newspaper articles, but that was not the case. He for one seldom read leading articles in the newspapers. A Labour member: “But you did not make the decision.”

Sir A. T. Ngata: “But I participated in making it.” It had been the policy for Maori members not to butt into purely pakeha subjects, but the present problem had gone beyond that. Continuing, Sir A. T. Ngata said the George Forbes who had returned from the Imperial Conference was a different man from the George Forbes who had left New Zealand. He had seen what was the position at various British markets at which New Zealand products sold, and had seen the effects of the dole. One of first declarations on his return to this country had been “No work, no pay.” Though perhaps at the time he had not realised all its phases, Sir A. T. Ngata added. Mr Forbes had seen conditions at other end of the world, and had had definite conclusions forced upon him. as to what course would have to be taken in this /country. It was useless to imagine that a little country like New Zealand could govern world conditions. It would be a case of the tail trying to wag the dog. Sir A. T. Ngata said that as a member of the Cabinet Economy Committee, he could inform the House that it had been found that there was very little room in which to turn. There was very little scope for reductions. The largest item confronting the Committee was salaries, and it was in this direction that the Government was forced to seek economy. It was unfortunate that civil servants had to be called upon to face a reduction of ten per cent., but this was part of the sacrifices that were forced upon th# community by circumstances. It was a comparatively small hardship in relation to those facing many farmers and many unemployed. Sir A. T. Ngata was applauded by all sides of the House at the conclusion of his speech.

Opposition to Measure. Mr A. Harris (Waitemata) declared that the country was suffering from the pessimism of Cabinet ministers. He believed the present position was largely a result of the policy of the Government. The falling off of Customs revenue was largely the result of the Government’s fiscal policy. Fur-ther-more, the Prime Minister should talk more optimism, and less pessimism. He had failed to inspire confidence in the country. Mr Harris strongly opposed the proposal for a flat rate reduction of salaries. He said the Government should be able to find many ways of making up for the shortage in saving that would be involved by a sliding scale. For instance, the amount could be produced from additional taxation on beer and spirits. Above all, he urged the Government not to touch the man earning £2OO a year. He was on the bread and butter line already, and should not be forced below it.

Mr J. McCombs (Lyttelton) said Mr Coates had called upon the Government to balance the effect of the cuts by insuring a fall in the cost of living, in the way of rent and interest charges, but the Leader of the Opposition had not ~dopted the course he now advocated when he himself was in office. Mr McCombs said he agreed with Sir A. T. Ngata as to the plight of farmers and the need for balancing the Budget, but he could not agree with the method the Government had chosen to adjust the situation. He quoted statistics which he said showed that in all countries in the world it had been shown that increased wages had not increased prices, while reduced wages had not resulted in a fall in the cost of living.

Ex-Minister of Finance. Mr W. Downie Stewart (Dunedin) said it certainly was a tragic and difficult position for those who had to face a reduction of costs. The Labour Party when condemning the proposal to reduce wages, should remember that their colleagues in the various States of Australia had had to adopt similar measures to balance the Budgets. Whatever the defects of the proposal, it certainly involved less risk than would be likely to follow failure to improve the trade balance. Further depreciation of our currency would be far the most serious thing that could happen to the workers, but it would be almost certain if the trade balance became unsatisfactory. The workers more than any other section of the community would suffer from a depreciation of currency. Increased taxation would not help trade, and unless the Labour Party could suggest a better means of meeting the position it should seriously reconsider its attitude. Referring to Sir F. D. Bell’s statement, Mr Stewart said he had never regarded civil servants as defenceless. He had always considered them a powerful section of the community. The statement that one-ninth of the workers were being asked to bear one-third of the burden was a fallacy. The two figures bore no relation to each other. Civil servants were the only workers whose salaries were paid by the Government, which could gain nothing by reductions of wages of other workers. Mr Stewart said he would welcome any method the Government could suggest for lessening the difficulties of workers on the lower paid scales. Mr W. Nash (Hutt) expressed the opinion that the Government would have to find a more satisfactory method of distribution if it was to solve the greatest difficulty of the day. The trouble was created by overproduction, coupled with imperfect distribution. It was through pessimistic statements such as the Prime Minister’s speech that people had become reluctant to spend their savings, and thereby ease the economic situation.

Mr C. G. Black (Motueka), expressed opposition to the proposal to reduce civil servants’ salaries. He was satisfied that so long as Public Service Commissioner control existed. Parliament might as well not exist. Mr Black urged that revenue should be obtained by means of a ten per cent tax on all advertisements, in preference to reducing salaries. The debate was adjourned, and the House rose at midnight.

PUBLIC SERVANTS’ COUNTERPROPOSAL. WAGES TAX SUGGESTED. By Telegraph—Press Annotation WELLINGTON, March 18. Counter-proposals in the form of a wage tax were submitted at a mass meeting held at the Town Hall tonight, called by the State Service organisations to protest against the proposed salary and wage reductions. The attendance was about 2000. Mr M. F. Luckie, Deputy-Mayor, presided. The organisat ens concerned were the New Zealand Educational Institute. the Amalgamated Society of Railway Servants, the Public Service Association, and the Post and Telegraph Association. The respective speakers were Miss Magill, Messrs L. Mcllvride, F. W. M-llar, and J. H. McKenzie. The counter proposals of the combined service organisations outlined by Mr Millar were:— (a) A wage tax of sixpence in the £ on all salaries and wages paid throughout New Zealand, this to be in the form of a stamp duty. Note.— 4 ‘Salary” to indicate that port I .on of the income of a professional or business man which is drawn for living expenses of himself or family. (b) A special tax on unearned income, to provide for similar taxation burden. (c) Income tax to be payable on all incomes of £l5O or over, with an exemption in the case of a married man of £l5O for a wife, together with the existing exemptions. A resolution was carried unanimously denouncing the proposed reductions, and pointing out that the “cut” of 1922 had never been restored, although in the intervening period Budget surpluses up to £6,000,000 had been shown. It was also stated that the Prime Minister had, since holding office, said the salaries of public servants were too low, and that the Leader of the Opposition had said the same. The Government’s proposals would have the effect of depriving publ’c servants of the whole increase granted in 1920, when the cost of living was at the same level as to-day.