IMPREST SUPPLY BILL

Timaru Herald, Volume CXXXIV, Issue 18914, 27 June 1931, Page 13

IMPREST SUPPLY BILL

DOMINION’S WAR DEBT DISCUSSED. GESTURE TO BRITAIN SUGGESTED. By Ttfempn—Pr*M Association WELLINGTON, June 26. In the House of Representatives this afternoon, urgency was accorded the passage of an Imprest Supply BUI. Speaking on the motion to commit the Bill, Mr W. D. Stewart (Dunedin) said he wished to refer to Britain's offer to the Dominions in connection with debt payments. The offer meant that Britain was prepared to sacrifice approximately eleven millions, in order to give the Dominions the benefit of the movement originated by President Hoover. When one considered the tremendous burden under which Britain was labouring, and the efforts which she was making to restore peace and prosperity, it would be apparent that this ofTer must have aroused the keenest admiration of all who were watching the position. While New Zealand's difficulties were great, those of Britain were so overwhelming, that it was surprising that she was able to make this offer. Britain was bearing a debt which some European statesmen considered she could not carry. She was determined to repay her debts at twenty shillings in the pound, while France was quite prepared to repay hers with French money, at approximately twopence. The amount New Zealand was indebted to Britain when the debt was funded in 1922, was £27.532,164, and it was on that.amount, which had now been reduced by us to approximately twenty-four millions, that this concession was proposed to be made. Mr Stewav\ jemarked that it had been shown • fiat of the debt funded in 1932, £1,991,919 was for items other than war expenditure. For instance, it included approximately a million, which was the balance owing on the warship New Zealand. The Prime Minister had stated, Mr Stewart continued, that he had set out to balance the Budget. The position appeared to be that, in making his plans, Mr Forbes could have had no knowledge of this possible windfall in the form of an offer from Britain. It was true also that he would have been counting upon receiving German reparations payments. New Zealand’s payments to Britain in connection with war debts amounted to half-yearly sums of £825.000. It had been pointed out that the first half-yearly instalment had already been paid. Britain’s proposal was to grant a moratorium from Ist July to 13th June next year. If the Prime Minister did not receive from Germany New Zealand’s share of reparations for the year, he would go short of £270,000 after Ist July. The point he wished the Prime Minister to consider was whether he would be prepared to ask Britain to postpone New Zealand’s payments only to the extent which Germany was not paying us, but so far as the remaining half-mil-lion was concerned, New Zealand should make payment as usual. He emphasised the extent of Britain’s difficulties, compared with those confronting New Zealand, and added that, in addition to this aspect, it must be realised that New Zealand’s credit in London would be enhanced if the course he had suggested were adopted. It had become apparent that our credit had suffered as a result of our association with Australia. “Just as America has made a gesture to Europe, and Britain has made a gesture to the Dominions, it is possible for us to distinguish ourselves by saying that we don’t wish to Impose greater difficulties on Britain at the present time,” Mr Stewart stated. This would undoubtedly improve our credit, and anything that had such an effect would be of immense advantage. It all depended whether the Prime Minister could see his way to inform the British Government that while he was grateful for the offer, he had no wish to take advantage of it beyond the extent to which the Dominion would suffer as a result of not receiving German reparation payments. He considered such a course would clearly dissociate New Zealand from the neighbouring Commonwealth, and he thought the people of the Dominion would realise that the effort was worth making. Mr Stewart remarked that he was pleased to see that the Prime Minister did not propose to put through any proposals embodied in the Neimeyer report this session. Ample time should be allowed for the consideration of matters of this nature, more particularly in view of the present very wide discussion of currency reform. Mr W. E. Parry referred to unemployment and the conditions prevailing in the country. Hr did not think men on relief work should have to pay the levy. He was not in favour of a flat rate levy, and considered it should be altered to a graduated levy, with exemption for all on low wages. Unemployed men were being given work on sports grounds, when more productive works could be undertaken. Too much money was being spent on sport in New Zealand. Surely the Government could get to work on drainage and other developmental schemes.

The Leader of the Labour Party (Mr H. E. Holland) complained that the Government had, without authority of Parliament, Imposed very severe “cuts” on civil servants. He referred to the remote allowances for schools, and said they had been cut off altogether. The Department of Health had given authority to dental committees to make a charge for treatment of children in school dental clinics, no child to be excluded from treatment through in-

ability to pay. The Department had later sent confidential letters to school committees asking them to pay £3O per annum towards the cost of material used by dental nurses. This communication also suggested that a charge of five shillings per child treated should be made annually, and that a dental officer should be 1 given a list of children who had not been paid for, and who would consequently not be eligible for treatment. The new policy could not be justified. Mr Holland said there had never been a suggestion during last session that free dental treatment would be withdrawn, and the late Prime Minister had promised to give free treatment to all school children in New Zealand.

Mr M. J. Savage (Auckland) referred to the subsidies to Hospital Boards, and said that in the past the House had a say in the estimates of expenditure, but this year the Minister had fixed expenditure as far as Hospital Boards were concerned. The unemployment situation was desperate, and the Government appeared to be helpless to cope with it. Extra expense had to be borne by Hospital Boards, but the Minister wanted the Boards to curtail expenditure. The House adjourned at 5.30 p.m. The debate continued when the House resumed at 7.30.

Mr Savage said he could not agree with the opinion expressed by Mr Stewart that it was wise to postpone dealing with the question of currency. He considered no improvement was possible if Parliament simply waited for something to turn up.

Mr A. M. Samuel (Thames), said that while he admired the sentiment expressed by Mr Stewart in respect to the war debt payment, he could not agree with the action suggested. It was all very fine to make a gesture of independence and self-reliance, so long as we could back it up with finance, but he did not think our non-accept-ance of Britain's offer would help our credit one little bit. “To my mind, the present economic position has been brought about by a combination of circumstances, among which improvements as a result of scientific research are important factors, but in my estimation the greatest factor of all is the question of repayment debts incurred during the war.” Mr Samuel said this factor had been the means of imposing very heavy burdens on taxpayers and industries, and was keeping out of employment men in Britain as well as in the Dominions. The repayment of debts to America was having a strangling effect on debtor nations, and at the same time was strangling American industries. As a result of diminution in the purchasing power of debtor nations, the gold which had been shipped to the United States was not being re-utilised. It was about as valuable as when it had been in the mines. The offer of the United States was only a preliminary move in the direction of modification and ultimate cancellation of war debts. America realised that there could not be a return to stable conditions until the purchasing power of the nations became the same as it had been before the war. Her offer /had not been an impulsive one. It had been under consideration for some time, and had been made in the hope that it would be accepted. Mr Samuel added that if the stabilisation of silver could be brought about, the troubles of Europe, as well as our own, would be at an end. The purchasing power of India and China had been reduced by over fifty per cent: While he had been at Home he had had several discussions with members of the British Ministry on the question of repayment of war debts. He had realised that if New Zealand were offered postponement, it would be of immense value to the Dominion. He thought everybody realised that taxation had grown vastly, and the sooner it was reduced the sooner the country would get back to better times. Postponement of debt payments would enable this to be done. When he had read of the British Government’s concession in the direction of postponing the payment of the principal of Australian war debts, he had written as an individual to Mr Thomas, mentioning that he had been wondering if the same generous treatment would be extended to New Zealand. Mr Thomas had replied stating that the whole question of debt payments was under consideration. “Now that the offer has been made,” Mr Samuel continued, “I trust the Government will accept it in the spirit in which it is made. This country can well do with postponement of that payment.” Mr J. S. Fletcher (Grey Lynn): "Is it a fair thing to ask the British taxpayers to bear New Zealand’s burden?” Mr Samuel: “I won’t say that it is a fair thing, to ask them to bear New Zealand’s burden, but I will say it is a fair thing for Britain to help one of her children who has always helped her.” He added, that if the Government turned the offer down, it would be doing a stark injustice to the taxpayers of this country. He could assure the House that New Zealand’s credit was still high in the Old Country. Two main factors which were liable to damage our credit were pessimistic utterances which were continually being made in New Zealand, and exaggerated reports which had been circulated in Britain concerning the Hav/ke’s Bay earthquake. Mr J. O’Brien (Westland) said New 'Zealand as a country had made wonderful progress during the last ten

years. No other country had increased production and wealth so rapidly, but because of a temporary slump the country had been plunged into poverty. He knew that it was necessary to balance the Budget, but up to date the money had been, taken from defenceless civil servants and the poorer people. There were no proposals to take money from those who had it. Mr D. Jones dealt with the importation of barley into the Dominion, and said that if Australia was allowed to flood the Dominion with weeds it would place New Zealand in a very serious position. The aim of the Department of Agriculture was to eradicate smut from the Dominion, and the authorities agreed that its eradication could be made an established fact if a serious effort was made. Large areas in Canterbury were being planted with smutfree barley, and the importance of this would be realised when it was known that smut could destroy a third of a barley crop. The debate was continued beyond midnight. Mr H. E. Holland appealed to the Minister of Health to reply to remarks of members relating to dental clinics, and to Hospital Boards’ finance. Mr Holland proceeded to protest against the Government’s coal importing policy. He said Mr Veitch’s statement that New Zealand mines could not produce all the coal required by the railways was wholly inaccurate. At the moment this statement was made, most of the mines in New Zealand were working short time. Hon. A. J. Stallworthy said it must be understood that those services which could be provided in prosperous years could not be continued to the same extent in times of depression. The economy axe had fallen on dental clinic services as well as others, but they were still being carried on at remarkably cheap rates. Co-operation was being sought with a view to extending the services to all parts of the Dominion. Replying to references to Hospital Boards’ finance, he said that if members who had been condemning the policy were themselves in the position of having to formulate a policy, their criticisms would be tempered with more fairness. It was purely a question of the economic situation. Hon. W. A. Veitch, replying to Mr Holland, said the Railway Department had recently allowed its normal supplies of New Zealand coal to go towards meeting the extraordinary demand for coal suitable for the manufacture of gas, it being necessary to make up the shortage by importations from Australia. The House was left sitting at 2 a.m.