EARTHQUAKE BILL.

Timaru Herald, Volume CXXXIV, Issue 18847, 9 April 1931, Page 12

EARTHQUAKE BILL.

Measure before the House. NUMEROUS CLAUSES CRITICISED. By Telegraph—Press Association WELLINGTON, April 8. When the House of Representatives resumed at 2.30 this afternoon, Mr W. E. Barnard (Napier) asked the Prime Minister if he would inform the House what steps had been taken to ascertain the total loss sustained in the Hawke’s Bay earthquake. The Prime Minister (Rt. Hon. G. W. Forbes) said that steps were being taken to ascertain approximately the losses suffered by private people, local bodies and the Government, but the figures were not yet available. Generosity of Public. The Prime Minister, in moving the second reading of the Hawke’s Bay Earthquake Bill, paid warm tribute to the generous manner in which the public had responded to the appeal to assist the devastated area. The first call on the funds subscribed by the public had been to meet cases of personal loss and distress. He wished to thank local bodies and also those who had opened their homes to refugees for the assistance rendered in this direction. However, the loss involved in the disaster was far in excess of any amount it could reasonably be expected would be raised by. public subscription, and it was to enable the re-establishment and settlement of businesses in the area that legislation was now being brought forward.

Referring to the Adjustment Court, Mr Forbes said that in view of the range of questions with which it would have to deal, it had been thought wise for its powers to be as wide as possible. Question of Rehabilitation.

The Prime Minister then went on to deal with the question of rehabilitation by means of payments from the Reserve Fund Account. Mr Forbes said in response to an interjection, that the sums of £1,500,000 had been regarded as a suitable amount to meet the immediate position. There would be another session of Parliament before long, and in the meantime, as a result of investigations made, it would be possible to know what further payments, if any, would be necessary. In view of the present state of the loan market, it had not been deemed wise to make any move in this direction, especially as such a course would indicate that New Zealand had been sailing fairly close to the wind in the matter of expenditure. He was sure the impression created abroad as a result of the decision to utilise the Reserve Fund to meet the situation of national emergency would be a favourable one. It would be necessary to reimburse the Reserve Fund as soon as possible, and provision was being made for this. Continuing, Mr Forbes said that it was proposed to set up a Rehabilitation Committee, consisting of five persons, to consider the question as to what payments were necessary in various cases. It had been suggested that payments should be made without investigation, but the Government was setting out to assist those who were really in need of assistance. Unfortunately the country was not in a position to place everybody on such a footing as they would have enjoyed if the earthquake had not occurred. It had been said that one committee would not be able to deal with the situation, but he explained that the Committee itself would be empowered to set up committees to gather information in various districts. Loans to Local Bodies. Dealing with the question of loans to local bodies, Mr Forbes said the view had been expressed that when at the end of five years they would be called upon to meet interest payments, they would find themselves in difficulties. He hoped the present depression would not continue that long, and that local bodies would then be in a better position to meet payments, but if they were not able to do so, there was nothing to prevent the question being re-considered at the end of that period. The Prime Minister stated that there seemed to be a concensus of opinion that there should be some form of taxation to provide the money required in connection with earthquake losses. He thought it only wise to make provision for further disasters, and the Government’s proposals included the reimbursement of the Reserve Fund, and increasing it so that it would be in a position to meet any further emergency. This was to be achieved by means of an insurance tax, and a tax on insurable property. There had been suggestions that taxes should be larger to enable requirements to be met more generously, but he did not think it would be wise to place an undue burden on the people at the present time. Mr Forbes briefly outlined the remaining provisions of the Bill. He said that postponement of local body elections in Napier and Hastings was advisable at a time when everything was dislocated, and so many people were away from their homes. Select Committee Suggested. The Rt. Hon. J. G. Coates said that everyone regretted the serious consequences of the earthquake, and he felt sure that all Parties would be prepared to co-operate in dealing with the situation. It was considered by many people that the proposals relating to the Adjustment Court wouid not be expeditious enough. There would be a great many cases for the Court to consider, and it might be better to leave the work to the Supreme Court. Was there any necessity for the compulsory settlement of disputes? he asked. If parties would not agree on a settlement, would it not be better to leave them alone altogether, and let them agree later? The amount suggested for rehabilitation was, in his opinion, totally inadequate. How was assistance to be apportioned? he asked. It had been suggested that all who had suffered loss should be assisted, but if a man was in a position to re-estab-lish himself without assistance he should be left to do so. A great many could be helped with loans, and not by gifts. He agreed that the Reserve Fund should be repaid, but business was in a bad way at the present time, and it might be better to meet the position from day to day, rather than place a heavy burden on property owners of the Dominion at the present time. The Dominion’s experiences of special funds in the past had not been happy ones. Governments had built up funds, and later Governments had used them for ends other than that for which they had been built up. Mr Coates said that the disaster in Hawke’s Bay concerned the whole country, and not only those who had insurable property. If it was possible and convenient to borrow money, it would be the better policy to follow. It might not be the sounder policy, but

would be easier under existing circumstances. A great number of business houses were not nearly fully insured, and 1/6 on the uninsured balance would make a very heavy burden in &any cases. As the matter was an

important one, he suggested that the Prime Minister should set up a Select Committee to take evidence on the Bill. He considered that the Bill was of sufficient moment to justify that and the end should be approached with the utmost caution. Amendment Moved. Mr Barnard joined the Prime Minister in expressing gratitude for the large-hearted response to the appeal for funds for distressed residents in the earthquake area. The funds, although very liberal, had proved inadequate, and in his opinion the £1,500,000 now offered was also totally Inadequate. He did not agree that the Bill should go before a Select Committee, because the need for relief was very urgent. The Bill had been before Members and the public for nearly two weeks, and any objections to the measure should have been aired. Mr Barnard said he desired to move as an amendment to the motion before the House: “That it be a recommendation to the Government to take into immediate consideration: (1) The urgent necessity for obtaining and publishing an estimate of the total loss sustained in the earthquake area. (2) The taking of authority this session to borrow the sum of £4,000,000 for the purpose of completing rehabilitation in the earthquake area. (3) The question of re-opening negotiations with the Council of the Fire Underwriters’ Association, with a view to obtaining the co-operation of fire insurance companies in the work of ascertaining losses, and making financial assistance available, and thereby facilitating the help which is so urgently required. (4> The immediate completion by the Public Works Department of the work of demolishing the ruins, and removing the debris in Napier, the cost of such work to be a charge upon moneys to be provided under Part 11. of the Bill. (5) Acceptance of the general rule that homes and household goods which had been destroyed or damaged shall be restored by way of a free grant to the full extent of the loss sustained. (6) The question of assisting local authorities in the earthquake area by way of a grant, as well as by loans. (7) The question of making recommendations to the Hawke’s Bay Rivers Board and the Napier Harbour Board and/or directing or controlling the activities of either body, with a view to securing the fullest possible coordination in the task of restoring the earthquake area, and Napier and Hastings in particular. Supporting his amendment, Mr Barnard suggested that the Government should take power to borrow up to £4,000,000 over and above the amount covered in the Bill. It was feared in Napier and in Hastings that £1,500,000 would be all the assistance that would be received, and it would have a strong psychological effect if the Government took the power suggested. He appealed to the Government to clear away all the ruins still in Napier, and said that he hoped the personal belongings of the sufferers would be restored one hundred per cent. He agreed with Mr Coates that consideration should be taken of the financial position of sufferers, but where the losers were workers, with mortgages on their homes, he thought the losses should be fully restored. He believed that there were 2000 homes in Napier that could be restored at an average cost of £IOO each, and if £200,000 was given as a free grant, it would go a long way towards restoring Napier. Napier was faced with many big problems, and not the least of these were the river and harbour. Three Adjustment Courts. Continuing, Mr Barnard asked that the losses caused by the loss of employment should be restored in part, and suggested that three Adjustment Courts should be set up to deal more expeditiously with the work. The £250,000 suggested for a loan to local bodies would probably not cover a quarter of the loss suffered by the local bodies concerned, and the possibilities of bodies being in a position to collect extra rates in future were not very bright. He suggested that £250,000 should be given as a straightout grant. He also suggested that a special Commission should be set up to deal with the question of late payments of income tax, or its remission altogether in the case of earthquake sufferers. Provisions Disappointing.

Mr A. E. Jull said that he was pleased the House had the Earthquake Bill before it, even though the provisions were disappointing. He was further disappointed with the speeches of Mr Forbes and Mr Coates. He felt somewhat alarmed at the emphasis which was being placed upon the loan aspect in preference to the principle of straight-out assistance. What was required in the devastated area was capital and credit as well. The towns would be prejudiced for a generation in competition with other places if businesses were heavily burdened with loans.

Referring to the Adjustment Court, Mr Jull complained that there was a possibility that the opinion of the Chief Justice could be overidden by the opinions of the two laymen members of the Court. He would prefer to see the questions left to the wellknown judgment of the Chief Justice alone than to envisage the possibility of his being outvoted by the other members. Mr Jull said that he understood the Prime Minister had given an undertaking to go into the question of earthquake losses in relation to the payment of income tax, and it was to be hoped that there would be a satisfactory outcome. Mr Jull drew attention to the losses involved in the farming industry and industry generally. He pointed out duty had been paid on large stocks which had subsequently been destroyed, and he asked whether it would not be fair to remit these duties. It would not be much use bringing people back to the area if firms were not placed in a position to employ them. He contended that the Bill did not deal adequately with the question of rehabilitation. The Prime Minister had referred to assistance where assistance was required. Did that mean that a man who had formerly owned a business was to be recognised as being in need of assistance, and to be offered a job, as for instance, as a clerk? T/iat, Mr Jull declared was not rehabilitation’ Continuing, he said that he thought a tax on insurable property might well be dropped. It would involve the creation of a great deal of machinery, and would only apply to a comparatively small amount of property. Court Criticised, Mr H. M. Campbell said that there was every indication that the damage in the earthquake area would exceed four millions. He thought the Government should begin by making grants to sufferers, and should then supplement these by loans at a low rate of interest. Criticising the Adjustment Court, Mr Campbell expressed the opinion that there were far too many cases for one Court to deal with within a reasonable period. He agreed that at least three Courts would be required, otherwise the hearing of cases would extend over a period of years. He also agreed with the suggestion that the Minister of Finance should be given power to raise a loan for the area, adding that even if the power was not us#d, it would be available should conditions change, and suitable opportunity present itself for the raising of a V J* 3e thought

that every possible assistance should be given victims, and he favoured the proposal to relieve them in the direction of income tax. He did not like the proposals regarding an insurance, and Insurable property tax. He agreed that it was necessary to raise money for the purposes outlined, but those purposes would be charges on the Consolidated Fund, which should be enabled to meet them out of revenue raised by other means. The House adjourned at 5.30. Universal Scheme. The House resumed at 7.30. Mi’ M. J. Savage said that he considered that there should first be an accurate estimate of the damage and the clearing of wreckage before rebuilding commenced, and when those preliminaries were accomplished, rebuilding should be made a definite objective. It was important to the Dominion as a whole that the area should be restored. The Government should, even if the raising of the money had to be spread over a number of years, set out on a complete programme, so that some guarantee would be afforded people whom it was desired to induce to return to their homes. Parliament should lose no time in laying the foundation of a universal scheme, which would place the country in a state of preparedness for any future happening of the kind. It was essential that the work of restoring the area to prosperity should be undertaken without delay. Variation Probable. The Hon. E. A. Ransom said that he had no doubt that variations to the Bill would be made in Committee, and he hoped they would bring the measure nearer to the objective of all parties concerned. He did not agree with those who argued that all losses should be made good, but he considered that the assitance given should be sufficient to enable the district to rehabilitate itself. Hawke’s Bay was a district with gTeat possibilities, and provided it enjoyed some good seasons, It would, with a reasonable measure of help, be able to re-establish itself on a sound footing. He was sure the people of Hawke’s Bay did not desire to be regarded as bankrupt and helpless to share responsibilities. Referring to the insurance tax, Mr Ransom said that he thought the public would regard this as the fairest means of meeting the situation, and preparing for a future emergency. If any Member was able to suggest a more suitable method, he should do so. He thought it desirable, if possible, that one Court should deal with all adjustment cases, so that uniformity could be expected. Another factor in favour of one Court was that it would involve the least possible administration cost, and leave more money for relief.

Mr Ransom said that he agreed that the question of a levy on insurable value was a difficult one, and he agreed that there would be a good deal of cost in collection. However, he did not think that large institutions which were sufficiently rich to carry their own insurance risks should be allowed to escape their share of the responsibilities. Should Use Bank Shares.

The Hon W. Downie Stewart said that the Prime Minister and Mr Ransom had dealt with the features of the Bill which anyone reading it could find what the House wanted to hear. There were other things relating to the Bill, such as what representation had been made to Cabinet and how far it was intended to go in building up the Reserve Fund again. He agreed that the Reserve Fund should be used if it was not possible to raise a loan, and said that the reason why a loan could not be raised was because the Government had raised over £9,500,000 on the local market during the short time it had been in office. A large part of that had been for redemption purposes, and had the advantage of localising that amount. The Government would have been wise to have avoided exhausting the local market. While the Government was looking into the question of urgency of replacing the Fund', he suggested that the Prime Minister should consider the possible use of the Bank of New Zealand shares which the Government held to the value of £2,000,000. It might be wise to consider using those shares to replace the fund for a time, and so enable the Government to consider fully the best means of replacing the fund. In effect the insurance tax was a property tax. The Minister of Lands had said that it was a tax on the people of New Zealand to meet a national disaster, but it was not a tax on the people of New Zealand. It was a tax on a class that had invested its savings in property. The Committee of the House should be told by the Prime Minister why the insurance tax had been decided on, and if alternative proposals had been explored. Mr F. Langstone said that the Government should first find out the extent of the losses, and then state how much of the losses it was prepared to finance. He added that he would like to see a clause in the Bill prohibiting insurance companies from raising their tariff. Mr C. A. Wilkinson said that he did not favour the insurance tax and the insurable property tax. The Government, by minting its own silver and copper coins, could collect the whole of the £15,000,000 without any cost to the taxpayers. Clumsy and Inequitable. Mr A. E. Ansell described the method of taxation proposed a clumsy and inequitable. Mr H. T. Armstrong said that it seemed that there was no power of appeal against the decisions of the Adjustment Court as in the case of decisions of other courts. Mr D. Jones supported the plea that the Bill should be sent to a Select Committee. There was nothing to measure the liability of the State in the Bill, he said, and it was the duty of Parliament to control the purse strings of the country. As far as the Bill was concerned, control was left to a Court. The House should lay down the laws and the Court carry them out. Continuing, he criticised the method of levying the tax, and said that it would put many farmers in an unjust position. He suggested that the Government should stop railway construction, and divert money being spent there on reconstruction work in Hawke’s Bay. Even if it took a Select Committee a month to make a good Bill of the measure, it would be worth the loss of time, he added. Mr Barnard: “What will the people of Hawke’s Bay do in the meantime?” Mr Jones: “We have money, and we can authorise its expenditure.” Mr H. M. Rushworth referred to the fact that a large area of land near Napier had been lifted, and reclaimed, and asked if it was possible for that country to become inundated again. He believed that that was possible, and if so it would be useless to rebuild Napier and Hastings on the present sites. It might be better to build elsewhere. Mr Barnard: “That is unnecessary.” Mr Rushworth: “Has the hon. gentleman any assurance of that?” The debate was continued by several other Members, who criticised phases of the Bill.

The debate was continued on similar lines until the House rose at mid-night until 2.30 to-morrow.