THE FINANCE BILL

Timaru Herald, Volume CXXXIV, Issue 18832, 21 March 1931, Page 8

THE FINANCE BILL

Urgency Accorded Second Reading. LATE SITTING IN HOUSE. By Telegraph—Press Association WELLINGTON, March 20. In the House of Representatives this afternoon, on the motion of the Prime Minister, urgency was accorded the second reading' of the Finance Bill. Continuing the debate, Mr C. H. Chapman (Wellington) suggested that the United Government had accepted the support of Reform, and- that the price of this was acceptance of ninetenths of the Reform programme, involving a reduction of the standard of living. Mr C. A. Wilkinson (Egmont) sa.d he considered the Minister of Education had made an unwarranted attack on business men when he stated that business men were not desired in Parliament if it were to function as it v/as intended to, and in the interests of the people. Mr Wilkinson declared that if there were more business men in a Parliament, such wild-cat schemes as the South Island Main Trunk railway would not be undertaken. He added that salary cuts were inevitable, and he supported tills proposal, though he could not support the Arbitration Court clauses of the Bill. Although he did not agree with the principle of the Arbitration Court, he considered the Bill involved breaking agreements. Mr D. G. Sullivan (Avon) asserted that the most disastrous feature of the debate had been the attitude of Mr Forbes towards the sacredness of agreements contained in Arbitration Court award. If those agreements were not to be observed as such by the Prime Minister, and could be light-heartedly broken, he suggested that it might reasonably follow that parties to awards —employers or employees—-would also consider that they were entitled to regard them in a similar light. Mr F. Waite (Clutha) said he feared the deficit at the end of the financial year would amount to more than 11 millions. One reason was that ordinary forms of taxation did not yield well in unprosperous times. For instance, there was a tremendous slump in imports of luxuries, from which a large portion Customs duty was derived. Income taxation also must decrease in the next twelve months. The Government would have to revise the system of taxation along lines which would yield a reasonable amount in bad times. Continuing, Mr Waite said there was no more virgin land in the Dominion, and to increase production it would be necessary to improve the land already broken in. That was a costly business, no matter what land settlement scheme was undertaken. Farms would only be developed if the work of developing them paid. The Dominion had failed to maintain the volume of exports per head of population, and unless it could be increased the standard of living must go down. Too large a proportion of the people of New Zealand were in non-productive Industries. Balancing the national Budget was not everything. The country might still fail, even though the national Budget was balanced, if by adding taxes another millstone was placed round the necks of producers. Costs had to be reduced. Farmers’ costs largely consisted of charges for labour and products of labour. Every increase in transport charges was felt by the farmer, who had to produce at a high rate of costs, and sell at a low rate in world markets. The Minister of Education had stated that the next move in industrial progress would be to shorten hours, but Mr Waite added that the farmer at present was working fourteen hours daily. The only sweated labour in this country was among the farming community. Mr M. J. Savage (Auckland) said that persons paying income tax were given exemptions for insurance and dependents, but those below the income tax minimum were now asked to bear a reduction without any exemptions. The additional revenue required could be raised by a graduated system in accordance to ability to pay. There was no guarantee that the increased post and telegraph rates would bring in increased revenue, but they certainly would be a brake on publicity and commercial enterprise. It was intended to place the railways under a Board which would alter the policy, but why could not the policy be altered by the present management? At the present time the railways compared more than favourably with competing services. He suggested that if private motor services were placed on the same footing as the railways, and asked to pay interest on loan money for roads, and requested to take all freight taken by the railways, instead of being able to pick out the eyes of freight, the motor services would be in such circumstances that they could not live with the railW M* H. G. Dickie (Patea) said he agreed with those members who contended that additional revenue could be derived from taxation on beer and spirits. Referring to the wheat duties, he said he did not advocate their total abolition. There could be some small protection, but it should be within reason. Bounties granted to any industries should not be permanent, but should only be given to enable them to get over the first few years. Mr Dickie expressed the opinion that the Dominion could do without many departments of State. For. instance, the Town Planning and Prime Minister’s Departments. He thought the New Zealand Secretariat at Geneva might well be abolished, and this country’s representation linked up with that of Britain, or some other Dominion. Further economy could be effected by uniting the Export Control Boards. A great deal of money was spent on the Dairy Board and the Meat Board, with very little in the way of results. Mr Dickie added that the High Commissioner’s office in London was due for overhaul. Mr W. E. Parry (Auckland) expressed the opinion that the expenditure on New Zealand’s representation at Geneva was fully justified by results. The House adjourned at 5.30 p.ra. Evening Session. The House resumed at 7.30, Mr Parry, continuing, said the Labour Party had never denied the necessity for balancing the Budget. It contended that the Government’s proposals would accentuate the difficulty by reducing consumption, and it urged that the necessary revenue should be obtained from those people obtaining the greatest shares of the national pool. He asked what objection could be raised to a surtax on all incomes over £SOO a year.. The Hon. S. G. Smith (Minister of Labour), said he wished to deal with the portions of the Bill relating to the Industrial Conciliation ancl Arbitration Act. “I take my full share of responsibility in the proposals the Government have made in all respects, in order to meet the position which faces New Zealand to-day.” The Minister declared: “F’or twenty years of my life I was a Civil Servant and I have lived the life of the lower-paid Civil Servant. It will therefore be understood that now, as a Minister of the Crown I would not agreed to the proposals unless they were absolutely necessary, and I agreed to them because I believe .that they arc eventually going to be 1

of great benefit to the workers of this ] country.” Mr Smith stated that the proposals in the Bill dealing with the Arbitration Court merely gave the Court power to consider the position in New Zealand to-day and so far as their duties and powers are concerned to make a general order fixing a percentage by which rates of wages under all awards might be reduced. They also gave every Union the right to apply to the Court to show reason why it should be excluded from a general order. No reduction would take place in the wages or salary of any apprentice under existing agreement, but power was given ti the Court, in the event of a reduction being made in the rates under future agreements, to review apprentices’ wages. The Bill did not affect existing contracts between employers and apprentices. Continuing the Minister said the Government had been vigorously accused of repudiation, breach of contract, and breach of faith, but he pointed out that when the legislation was passed in 1918 giving the Court power to increase rates, there was no mention of repudiation or breach of faith. . „

Mr W. L. Martin: “Who is forcing the Government to take this action?” Mr Smith: “Stress of financial circumstances.”

Mr W. E. Barnard: “Sir Otto Niemeyer.”

Mi* Smith proceeded to review industrial legislation, and was subjected to repeated interruption from the Labour benches

The Speaker thereupon warned the House that interjections of the nature commonly called “heckling” and contradictions were disorderly. He had allowed considerable latitude in the direction of questions. The Minister, continuing, said he had it on the highest authority in the country that an Arbitration Court award was not a contract. All that happened was that the Court stepped in and fixed minimum rates of wages. There was nothing to prevent employers paying a higher rate. It was as well to note that most awards had been fixed in more prosperous times. Concluding, the Minister said that if there was anybody in the House who could show him that what the Government was doing would inflict hardship unnecessarily on workers, he would have no hesitation in walking over to his side of the House, but it was his belief that the proposals would prove to be a benefit to New Zealand as a whole. If some better way could be shown, he would have no hesitation in leaving his chief, but he was standing by him. He believed the Government had nothing to fear. Mr R. Semple: “You go to the country.” Mr Smith: “I am not afraid to go to the country, and not afraid to do my duty here, unpopular as it is. I stand by these proposals because I believe honestly they are the best for New Zealand.”

The Minister was applauded by his colleagues on resuming his seat. Mr W. E. Barnard (Napier), concurred in the view of several other members that extra excise and Customs duty on beer, wine and spirits would be a fairer way of obtaining the money required to meet the deficit. If New Zealand adopted the same duty as Britain it would produce an additional £1,626,496 a year. The Australian scale would produce an extra £1.228,571. Mr Barnard added that there was a modern precedent for forcing down rents, even if they had to go to Italy for it. Mussolini’s Government had recently reduced wages and salaries by varying degrees, leaving alone those under the povertypoint. Mussolini had at the same time taken effective steps to bring down rents and the cost of living generally. Mr J. S. Fletcher (Grey Lynn), said he hoped he would be able to induce the Minister of Labour to be the second defection from the ranks of the United Party. He considered, that there were better methods of getting out of the difficulties than those proposed in the Bill, and among them he suggested fixing liquor licenses on a barrelage basis, instead of a flat rate. Increased duties on beer and spirits would provide additional revenue and do nobody any harm —and do a lot of good. The Minister of Native Affairs had painted a gloomy picture of the state of the country’s finances, and had described the Economy Committee as endeavouring to find ways of reducing expenditure. The methods described, Mr Fletcher remarked, had reminded him of a tinker trying to solder the spout when the bottom was out of the kettle. There was scope for saving at least a million per annum in capital costs of the Public Works Department if it was thoroughly reorganised, and the inefficient factors eliminated. He urged the Government to force oil companies to reduce the price of petrol, or alternatively to take over the monopoly of importing petrol in bulk. It would also be serving the country well if it imported crude oil, and established its own refining plant. By tackling the oil problem the Government could make available approximately two millions annually for development of the resources of the country.

Mr A. E. Ansell (Chalmers) said he believed excessive taxation was one of the greatest enemies Labour had today. Every penny placed in that fund was taken from the sources that fed industry. He did not say a reduction was possible at the present time, but taxation should be as light as possible, and reduction should be the aim. Excessive taxation created a demand for money, and therefore helped to keep up interest rates. Everyone agreed that it was important that interest rates should be brought down to a lower level.

Mr K. S. Williams (Bay of Plenty), replied to Mr Fletcher’s remarks concerning the Public Works Department, and stated that evidence of the efficiency of its work was to be found in the Hawke’s Bay ’quake area at the present time. He referred to the manner in which bridges and other structures had resisted the shock. Mr William’s said it appeared to him that the way out of the present difficulty would be for people to pay cash for necessities instead of deferring payment for them, and paying cash for pleasures.

Mr J. A Nash (Palmerston North), said he was not prepared to accept the Government’s proposals unless he could be shown that there was going to be a reduction in the cost of living. The Prime Minister had stated that there already had been a fall in living costs, but Mr Nash argued that that had been due to the drop in the price of primary products. It was not in the direction of low prices for farmers’ produce that reduced living costs were sought. Mr Nash complained that there was no graded system of sacrifice in the Bill. This should be based on ability to pay, and there should be provision for revision within two years. The debate was continued by Messrs J. O'Brien and R. Semple. Another Amendment. Mr J. McCombs gave notice of intention to move an amendment when the amendment was before the House, was disposed of, “That the House recommends to the Government that members of Parliament be assembled as a round-table conference, to formulate proposals by means of resolution agreed upon, the resolutions to be subsequently embodied in the Bill; the resolutions to be confined to (1) Taxation proposals based on equality of sacrifice, and ability to pay; and (2) ways and iheans of rendering immediate assistance to the farmers, and ultimately relieve the farmers of the risks of foreign trade.” Messrs Nash and Armstrong continued the debate. (Left sitting <at 2