THE FINANCE BILL

Timaru Herald, Volume CXXXVI, Issue 19154, 9 April 1932, Page 10

THE FINANCE BILL

FIRST READING CARRIED LABOUR MEMBERS HOSTILE ,oy Telegraph—Press Association WELLINGTON, April 8. The House of Representatives adjourned this afternoon at 2.45 “till the ringing of the bells,” it being announced that the new Finance Bill would be introduced, probably at 4.30. Expenditure Adjustment Bill. The National Expenditure Adjustment Bill was introduced by Gover-nor-General’s message when the House •resumed at 5.30 p.m. The Leader of the Opposition (Mr H. E. Holland) said it was apparent from the long title that the Bill was the most dangerous and reactionary piece of legislation that had ever been placed before Parliament since New Zealand had had representative Government. The Labour Party would offer the strongest resistance to the measure that the forms of the House would permit. It was desired in the meantime to study the provision of the measure. The Bill seemed to contain proposals of which details had been given to newspaper editors before they were placed before the House. He desired to comment on the action of the Press Association and the newspapers which he alleged had suppressed the fact that there had been a conference ever since it had been mentioned in the House.

Mr Forbes said there had been a meeting between editors and members of the Government. It was not uncommon for a Government to discuss matters with editors of newspapers. There had been no attempt to come ».o an arrangement with the editors, who would no doubt have resented any attempt to interfere with the conduct of the newspapers. Mr Forbes said he desired to pay tribute to the untiring work of the Minister of Finance, who during the last month had been carrying on discussions with various organisations in regard to the most farreaching legislation that had ever been placed before the country. Discussion of the aspects of legislation was simply one of the phases of its preparation. No one had been placed in a better position than members of the House in regard to the actual contents of the Bill. Mr Forbes expressed the opinion that a study of the Bill would reveal that even-handed justice was being done to everybody. He felt confident that members of the Opposition would realise that the measure was designed to meet present emergency conditions, and would give it a large degree of support.

Mr J. McCombs said the measure seemed to be one of general repudiation. It would only deepen the depression. The Government seemed able to think only in terms of depression.

Mr W. E. Parry said the Bill would reveal the utter incompetence of the present Government to deal with the situation. The Government was destroying trade and industry; it was ruining the sources from which it could derive revenue. Reduction of pensions would be a cruel step in an endeavour to balance the Budget. The proposal to increase the life of Parliament was to be condemned. He asked whether the Government was going to call a halt, or whether it would wait for the people to rise up in thousands and demand the resignation of t the Government.

Mr Coates said it would seem from the remarks of Mr McCombs and Mr Parry that they were not yet cognisant of the very grave and serious crisis through which the country was passing. The only thing that would see the country through was a determination to meet its obligations. “If we attempt to avoid facing our task, then we are gone as a nation,” Mr Coates declared. He said the proposals in the Bill covered a three years plan, under which the Government was setting out to restore the country’s equilibrium. Mr E. J. Howard asked whether any conspiracy had been entered into with the banking institutions in regard to the Government’s policy. Mr R. Semple declared that the Government was bankrupt in statesmanship. The Governor-General’s message was adopted by 43 votes to 25, and the Bill was read a first time by 43 to 24. The House rose at 6.20 p.m. till 2.30 on Tuesday. PROVISIONS OF BILL. Salary Cuts. Salary cuts covered by the National Expenditure Adjustment Bill are made retrospective to April Ist. so far as Ministers of the Crown and members of Parliament are concerned. They are:— Ministers of the Crown, 15 per cent. Speaker of the House of Representatives, 12i per cent. Speaker of the Legislative Council, and Chairman of Committees of both Houses, 10 per cent. Other members of Parliament 10 per cent. The salaries of other members of the Civil Service, including the Public Service Commissioner, the Controller and Auditor-General, and members of the Government Railways Board are reduced on the following basis:— Where the salary on March 31st was less than £225, the reduction shall be 5 per cent. Where the salary on March 31st was more than £225, and not more than £720, the reduction is to be 10 per cent. Where the salary at March 31st exceeded £720, the reduction is to be 121 per cent. Education Economies. Where money is granted by the Consolidated Fund to education boards, governing bodies of secondary schools, University College, or other institution, and used for payment of salaries, it shall be subject to reductions according to grading as outlined in the Bill. Where these grants are only partly payable in salaries, the Minister of Finance may determine how much shall be subject to the cut. Local Body Subsidies. All subsidies payable by the State to local authorities under the Municipal Corporations Act 1920, or to Hospital Boards under the Hospitals and Charitable Institutions Act 1926, or to Fire Boards under the Fire Brigades Act 1926, d' to the Rotorua Borough Council under special legislation of 1922, are reduced by 10 per cent, as from April Ist. Superannuation. Contributors to Superannuation Funds may, by giving notice before September 30th of this year, elect to contribute on a basis, as if their salaries were not reduced. This will entitle them to. the benefits on a higher scale. Any person who has been contributing on a higher rate since the salary cut of last year may continue to pay in on that basis, or he may contribute on

a basis of his salary as at April Ist of this year. Superannuation will be calculated accordingly. Any accumulation of contributions representing the difference in salaries will be held by the Superannuation Board, and paid out in addition to the retiring allowance at the proper time. Increment Cancelled. Salary increments according to the classification of the Public Service which would usually operate from April Ist, are cancelled by the Bill. The salary reductions are to remain in force until altered by legislation. Power is vested in the GovernorGeneral to make regulations that are necessary, particularly in relation to the adjustment of anomalies, or for the relief of hardship. The Bill may, by Crder-in-Council, be applied to uil persons employed in the Cook Island and Niue service, and the Samoan Public Service, the date of the salary reductions to be specified in an Order-in-Council. Questions of dispute over salary reductions are to be settled by the Minister of Finance. Reduced Pensions. Reductions in pensions and allowances payable out of the Consolidated Fund constitute an important feature of the Bill. They become effective as from April Ist. The amount of the old age pension will be reduced from an annual value of £45/10/- to £4O 19/-, diminished by one £1 for every complete £1 of income- in excess of £39. The former basis was £52. In the case of married couples, both in receipt of old age pensions, they shall be entitled to pensions which shall not make their total incomes exceed £l2l. Previously the limit was £143. In case of widows’ pensions, the allowance for each child is reduced from 10 - weekly to 9 and the maximum payable is reduced from £4 to £3/12/-. A pension shall not be granted of such amount that the total incomes, of a widow and her children, together with the pension, will exceed ‘ £l/14/- a week; formerly it was £2 (together with 9 - a week for each child), or exceed £4 17 - a week (formerly £5/10/-), whichever rate was the less.

The amount on which miners’ pensions are based is reduced from 25 - a week to 22/6. In the case of married men. the allowance for each child is reduced from 10/ -to 9/-, and the allowance for children of widowers is similarly reduced. The maximum benefits are reduced from £4/5/- to £3 16/6. It is also proposed to limit the payment to widows of miners to a period of two years after the husband’s death. At present such pensions are paid for the period of Widowhood. The amount of pension is also to be reduced from 17/6 to 15 9 per week.

Pensions granted more than 18 months before the passing of the Bill are to continue, but at the reduced rate, until six months after the passing of the Bill. South African veterans in receipt of a special pension of £l3 per year Are still entitled to that allowance. :n addition to the old age pension, but their aggregate receipts from all sources must not exceed £79/19/-, compared with £97/10/- at the present. The rate of every pension (other than the economic pension) payable under the War Pensions Act to any dependents other than a widow, child or widowed mother of a soldier, or to the guardians of a soldier's children, shall be reduced by an amount equal to 17& per cent, of the rate at which such pensions were payable on March 31st. The maximum value of the economic pension payable to a totally or partly disabled soldier is reduced from 30/- a week to 21/-. The economic pension paid to a widow with one child is reduced from 10/- to 8/-. In the case of a widow with two or more children, an additional allowance of 2 6 for each child in excess of one has been payable, but the amount will now be reduced to 2/-. A further amount of 15/- a week may at present be granted by the War Pensions Board to a widow with or without children, but that will be reduced to 12/-. The maximum for a wholly dependent widowed mother is reduced from 20 - to 16/-, provided that the income from all sources does not exceed £2/6/(formerly £2/10/-). Partly dependent widowed mothers are reduced on the same weekly basis, and the limit of income from all sources is reduced from 35/- to 31/-. The maximum payable as family allowances was fixed by the Act of 1926 at £4, but that was reduced last year to £3/12/-. The Bill proposes a further reduction to £3/5

Several general amendments to pensions legislation are also proposed. In computing the income on which pensions are based, sick allowances, moneys subscribed by public subscription, and compensation up to £IOO, are to be taken into consideration. A restriction is also placed on the right to receive two or more pensions. No person in receipt of a pension under the Pensions Act 1926. other than the old age pension, shall henceforward be granted or continue to receive a pension under the War Pension Act 1925, provided that any person in receipt of a war pension and any other pension may elect to receive the larger. Interest Rates. The purpose or Part 3 of the Bill is to effect reductions in rates of interest payable by mortgagors, and in rents commensurate with the reductions in salaries, wages and pensions made in other sections of the Bill. It is specifically set out that the provisions of the section shall bind the Crown. The Governor-General is given power by Order-in-Council to exclude any specified class of mortgages. Subject to the provisions of the Bill, the rates of interest payable under mortgages of property in the Dominion. and rents payable in respect of land or any interest in land payable under contracts in force at the passing of the Bill, shall be reduced by a standard rate of 20 per cent., and ratels as so reduced shall not be increased except by leave of a competent Court before April Ist, 1935.

The reduced rates of interest and rent are to come into force as from April Ist, 1932. If in the case of a customary hire purchase agreement, or in any other case where the rate of interest is not specified, the parties may either come to an agreement between themselves concerning what shall be deemed interest and what principal, or they may apply for a ruling from a magistrate. The net rate of interest payable under any mortgage of chattels shall not be reduced below 6£ per cent., and the net rate of interest under any other mortgage shall not be reduced below 5 per cent. Where a mortgage comprises both chattels and land or other property, an apportionment of the moneys secured shall, if necessary, be made by agreement between the parties concerned, or by a Magistrate, on application being made by either party.

The rent payable in respect of any premises shall not in any case be reduced so that the net annual rent is less than 5 per cent, of the capital value in the case of land used mainly or substantially for farming purposes, or less than 7 per cent, of capital value* in any other case. In the event of a dispute, the capital value shall be fixed by the Supreme Court where the gross rent exceeds £2lO per year, and otherwise by a Magistrate. Right of appeal to a Court is given to a mortgagee or landlord or anyone receiving interest or rent. The appeal may be made on the grounds that the rate of

interest or rent is fair, taking into consideration the nature of the security or premises that adequate concessions have already been granted to the mortgagor or tenant, and that a reduction of interest or rent would cause undue hardship. The Court may make such order as it thinks just and equitable, taking into consideration the economic position of* New Zealand. as well as the conditions of the parties. The appeal must be taken to the Supreme Court where the total amount payable in interest or rent exceeds £2lO.

The powers of the Court under the Mortgagors Relief Acts are not affected by the new Bill.

As indicated in the Financial Statement. provision is contained for the unposition of stamp duty of ten per cent, on receipts of interest from Government and local body securities, and from debentures issued by companies or other corporations. The following classes of securities are exempted:—Treasury Bills, Post Office investment certificates, debentures and other securities invested out of any Superannuation Fund or National Provident Fund securities held by the Treasury, or any securities that might be exempted by Order-in-Council. The duty of twopence prescribed for receipts of amounts over £2 shall not be payable on any coupons, warrants, or receipts on which duty is paid under the Bill.

Local authorities and companies will receive the net duty on interest from their securities, after deduction of five per cent, for administrative expenses. This part of the Bill will apply between April 20th. 1932, and March 31st, 1935.

The maximum rates of interest on deposits payable by Savings Banks, building and investment societies, and trading companies, are to be regulated according to special provision in the Bill. It is prescribed that the maximum rates of interest may be fixed by Order-in-CounCil up to the end of March, 1935.