FINANCE BILL.

Timaru Herald, Volume CXXXIV, Issue 18831, 20 March 1931, Page 8

FINANCE BILL.

Debate In House Continued. AMENDMENTS MOVED. By Telasraph—Press Association WELLINGTON, March 19. In the House of Representatives this afternoon, the second reading of the Finance Bill was resumed by Rev. C. Carr (Timaru), who declared that to reduce wages would create an obstacle to the free circulation of money, thereby hindering recovery from econofnic difficulties. He could not agree' that wages reduction would result in a fall in the cost of living. The Prime Minister anticipated that because wages amounted approximately to one-third of the cost of production, th efore there would be a saving in cost only to that extent. It followed that ten per cent, reduction of wages would at most provide scope for a 34 per cent, fall in the cost of living, and it was unlikely that the saving would be passed on to the community. Mr Carr expressed the opinion that there would be economic recovery much sooner than some people anticipated, and lower wages would continue to obtain long after the reduction was required. Mr W. J. Poison (Stratford) said figures showed that the depression would not lift as soon as the previous speaker believed. Cuts had been necessary in Australia, and New Zealand was demanding similar action in order to restore the economic position. New Zealand consumed only flfteeen per cent, of her butter and cheese, forty per cent, of meat, and only three per cent, of wool It was clear that prices must be governed by export parity, and recovery depended entirely on getting production costs down in order to increase exports. Farms were beginning to go out of production already in the Dominion, and more would go out unless costs were cut down. Another serious aspect was the drop in the percentage of fertilisers used at present, compared with normal years. He considered that the Government should arrange for farmers to be financed. The farmer had already suffered, and so had the business-man. Civil servants were in a better position in New Zealand than in Australia. The civil servant was in a sheltered position, and had superannuation when he retired. It was clear in those circumstances that he was not being asked to bear an undue sacrifice. Living costs had already fallen about ten per cent., and would fall further after wage reductions. According to the Economic Denartment of Canterbury University wages made up sixty per cent, of production costs in New Zealand. The proposals of the Government did not go far enough. There should be a review of the taxation system in order that the standard of living could be maintained. Until a survey was made from this angle there was bound to be dissatisfaction.

Mr C. H. Clinkard (Rotorua) said that in his opinion national expenditure had become greater than the taxpayer could bear, and the only way to lighten the burden was to reduce the cost or reduce the number employed. The latter measure would not be justice, but could not be avoided if the present scale of wages was kept up. The Government was being asked to live up to production. The trouble was that the people of the Dominion had been living far beyond production. Too much had been spent on motorcars, and he suggested that their importation should be prohibited for two years. Increased salaries did not increase local production. In the majority of cases the increase was spent on imported articles, and so made the credit of the country worse. Mr H. T. Armstrong (Christchurch) said Labour was anxious to improve the conditions of farmers, on whose prosperity the conditions of the workers largely depended. A reduction of wages would decrease the farmers’ market in New Zealand. What was required to assist the primary producers was reduction of interest costs. He declared that the struggle for existence in many civil servants’ homes was already harder than it had a right to be in a country like this. He instanced the case of a civil servant with a family of six, who received a wage which, when the ten per cent, cut was taken into account, and the contribution to the superannuation fund deducted, would amount to only £3/3/-. Mi* Armstrong contended that it was an outrage to expect a man to raise a family under such conditions. Mr W. D. Lysnar (Gisborne) said that if the Government had gone properly about the business there would have been no need for salary cuts. Returns from primary producers had increased by millions before the slump, but the. trouble was that producers did not get the increase. It had been swallowed up by trusts and combines. Mr Lysnar criticised the actions of the Meat Board, adding that if the House had passed his ‘ Meat Bill last session producers would have been receiving better prices to-day. He was still living in hopes that the Government would have enough wisdom to deal with the problem of trusts and combines. It was paltry for him to have discussed the Bill before the House, when it would not have been necessary at all if the steps he had mentioned had been taken. A Member: “Do you support the Bill?”

Mr Lysnar: “Of course, I have got no alternative as things stand at present.” The Hon. W. A. Veitch said he wanted a few minutes to reply to criticism of the Railway Department. The railways had been losing for some years, and a great many economies had to be made before the ten per cent, cut had been contemplated. His greatest regret was that he had to dispense with the services of a lot of men in the Department. When ne had taken over the portfolio of Minister of Railways, he had been asked to effect economies. A saving of £390,000 had been aimed at, but the actual saving for this year could be estimated at as much as £450,000. Unfortunately, however, as a result of the business depression, the railway revenue had fallen off to an extent not very much greater, but nevertheless greater than the saving in expenditure. It had to be recognised that the loss on the railways would have been greater had economies not been effected, and furthermore their benefit would be felt when business conditions returned to normal. Referring to increased rents for railway dwellings, the Minister said the General Manager had been given power to investigate cases, and where it could be shown that the increases were unfair or inequitable, to make necessary reductions, which of course would operate from the date the rents were originally raised. Dealing with the proposed reduction of civil servants’ salaries, Mr Veitch said there was no question as to whether civil servants deserved what they are at present receiving. He knew they were a fine body of men, but the money was not available to pay existing rates. The Government hoped the time was not far distant

when it would be able to return to them what was being taken from them to-day, tor no other reason than the hard taut that the money was not available, and that it was impossible under the circumstances to treat them any better. The House adjourned at 5.30. The House resumed at 7.30 p.m.

Continuing, Mr Veitch said th® Leader of the Labour Party had drawn attention to previous speeches in which he (Mr Veitch) had said that road to prosperity was not to be fcind along the lines of low wages. That principle had been enunciated by Liberal statesmen for many years, Mr Veitch stated, and he himself still believed in it, but neither he nor anyone else was able to pay high wages without the money to do so. The Labour Party, if it were in power, would have to do the same thing as the Government was now doing, so would the Reform Party. Mr R. Semple (Wellington) said the Government was tinkering with the problem facing the country to-day. Instead of reducing wages, it should set out on a policy of developing the mineral and other resources of the country, with a view to making it selfsupporting. Mr H. M. Rushworth (Bay of Islands) said his opinion was that the Bill before the House did not go anywhere near solving the problem of the day. It might or might not provide a palliative at the moment, but something more radical would have to be done to meet the situation fully. The Wheat Duties. Mr Rushworth intimated his desire to move an amendment to the motion before the House: — “That notwithstanding anything to the contrary contained in this Bill, the provisions of the Bill shall not be put into effect until one calendar month after the import duties on flour and wheat have been removed or reduced by at least 25 per cent.” The Speaker said he would not accept the amendment in the form proposed. The Hon. H. Atmore said it was an astonishing thing that, although all countries of the world had an assured market and an assured supply, depressions such as were being experienced at present came along in regular periods. The fact had to be recognised that whatever finance manipulators were doing in the direction of creating world-wide depression .to their own advantage, there were other causes, one being the displacement of men by machinery. He was not one of those who took a pessimistic view of the situation, and he did not think it was beyond the wit of man to find a remedy for depression. He believed that faulty distribution and under-consumption were behind the present troubles of the world, and he believed that the next move would have to be a shortening of hours. He knew there would be arguments | against such a proposal. The same arguments that had been used when ; hours were reduced previously. If man was to be master of the machine and rise to a higher destiny, the shortening of hours would be essential. Mr Atmore said he could understand the salary cut being unpopular, but under present circumstances it could not be avoided. The alternative to a ten per cent, reduction appeared to be ten per cent, dismissals, and he knew which would be preferred. If costs were reduced, he believed a way out of the difficulties created by manipulation of the gold standard would be expedited, and he was satisfied that the Prime Minister's proposals were right ones. Mr H. H. S. Kyle (Riccarton) said he hoped the Arbitration Court would take advantage of the provisions of the Bill to review some pin-pricking conditions in awards. He believed that trouble to-day was not so much a matter of wages as the number and nature of conditions insisted upon. Mr W. J. Jordan (Manakau) moved an amendment: —

“That this House declines to give a second reading to the Bill, which fails to meet the Dominion's financial obligations by means pf a graded system of taxation in accordance with citizens' ability to pay.”

Mr Jordan advocated raising revenue from petrol companies in preference to reducing civil servants' salaries. He said the cost of landing spirit in New Zealand amounted roughly to sixpence per gallon. The duty was sixpence, and petrol was delivered to the re- | tailers at main centres at 1/9, leaving a profit of ninepence for the comI panies. The retailer sold spirit at ' main centres at 2/- gallon, and if a profit of threepence per gallon was sufficient for the man who had to keep a station open day and night to sell in ! three or four-gallon quantities, surely a similar profit should be enough for the companies who delivered the spirit in large quantities. On a basis allowing this profit to the importers, it would be possible for the Government jto increase the duty by sixpence a j gallon and obtain the additional rei venue of £1,800,000. Even if the Government sought to give motorists the benefit of reduced prices, and charged only an additional fourpence in duty, It would still be possible to raise £1,200,000. This would be subject to certain reductions in the way of sales of spirit not used on the road, but even then it would provide the amount it was proposed to save by a reduction of wages in the Civil Service. The amendment was seconded by

Mr H. G. R. Mason (Eden), who said the Minister of Education had given the House a good deal of eloquence, j but apparently his action was confined ;to concurrence in the Government’s i proposals. The country required I action rather than eloquence. Mr | Mason added that it should be possible j for New Zealand to provide against a recurrence of waves of depression. | Mr A. W. Hall (Hauraki) urged the I removal of salary conditions from political control. Mr C. H. Chapman (Wellington) ! declared that the United Government ‘ had treated the workers as badly as I any previous Government had treated them. The House rose at midnight.