RETRENCHMENT DEBATE.

Star (Christchurch), Issue 16641, 25 January 1922, Page 10

RETRENCHMENT DEBATE.

MR MASSEY’S MODI FIRATIONS. HEW SCHEME ANNOUNCED. (Special to the “ Star.”) WELLINGTON, January 24. The Government -was prepared to go on with the Retrenchment Bill in the House to-night, though the Prime Minister indicated immediately that he proposed only to take the first clause in committee. This allows of a general discussion on the measure. He announced how far the Government is prepared to meet the objections of Public Servants. After again emphasising the financial position in which the country now found itself, he repeated that the cost of government must be reduced if the country wished to avoid serious trouble. He could tell them plainly that he could not find money in existing conditions to meet the expenses. There was not an intelligent man or woman in the country who had not understood when the cost of living bonuses were given that reductions would be made when the cost of living fell. Certain amendments had been made in the Bill since its introduction, and these he would explain to the House. When he had made his second reading speech he had created the impression, rightly—for it was so intended at the time—that the first cut would, be taken during the first quarter of this year and the second not earlier than April. That was that the second cut would operate in the quarter commencing April 1, and the third cut in the quarter commencing July 1. He was changing that. The first cut would be taken, as intended, during the present quarter, for the obvious reason that he did not think he could make his accounts balance without the money which he was going to save during this quarter. He did not propose to take anothed cut until the quarter beginning July 1, and then not propose to take another cut until the first quarter of next calendar year, commencing January 1, 1923. Therefore. instead of having three cuts practically in six months, or, at the outside, nine months, there would be three cuts in fifteen months. Mr Wilford: When does that mean that the first cut will operate? Mr Massey: Now. January, February, March. MARRIED MEN AND CADETS. Continuing, the Prime Minister said ; t had been pointed out that there might be some hardship to married men with large families, and a clause would be introduced to provide for regulations, so these men might state their cases and the reduction be altered according to their circumstances. He then referred to the fact that some members of the service did not receive the full first bonus of £45, because they had previously been receiving £lO, £ls and £3O over scale salaries. There were some, he believed, who had not got the full amount, although they had not been receiving over scale salaries, but the cases he proposed definitely to deal with in the Bill were these of cadets who only received a certain amount of increment. It would not be fair to take the whole amount away, and therefore he proposed to take only £ls in all, made up of £lO at one time and £5 at another. Whatever was done would have to be subject to adjustment afterwards, for in such a•. complicated matter it was extremely difficult to avoid anomalies. In subsequent reference to modifications, Mr Massey said he expected to save £BOO,OOO by the first cut. £700,000 on the second cut and £650,000 on the third cut. It was impossible to be accurate, because it was impossible to say how these things would work out. He had at first expected to get a total of two millions, but he believed the three cuts would actually produce £1,885.840Mr Mitchell : In some cases where it is- proposed to take £IOO there is an increment of £IOO due. Maesey replied that fyhis was quite likely, because the increahe was statutory, but as the result of the cut the officer would lose £IOO he would otherwise receive. “It is a very unpleasant thing to make these proposals/* concluded Mr Massey, “ but I have to do it. I could net hold up my head if I did not do what I thought was right, and I am doing it and an* prepared to take the consequences. ’ ’

COST OF LIVING. OUT BALANCED BY REDUCTIONS When the Prime Minister faced th«* House in Committee to-night with the object of securing the passage of the short title of the Retrenchment Bill he was surrounded with official statistics. The supply was so large, and was unloaded with such rapidity, that puzzled members sometimes gave up the task of following. The Premier declared his belief that the decrease in the cost of living more than equalled the wholesum proposed to be taken, from the Public Service during this year. TVs illustrate how this process was going on Mr Massey took the prices of various foods in Christchurch. He enumerated outs of meat and the usual items of grocery orders, but members wsre not all satisfied, Mr M’Combs demanding that all groups of figures should be produoed. Mr Massey retorted : “I have reason to believe there is practically no difference between the food groups and all groups.” Mr M*Combs: Produce the figures. T<ro are a past-master at suppression. Mr Massey : When we commenced in April, 1920 there was only one point of difference between the two groups. Mr Keilett: You don’t quote bread. Mr Massey r The reduction comes next month. We cannot get reduction until the new harvest. Mr Mitchell: What about the big things, such as rent, fire and light? Mr Massey: Kerosene and candles. {Loild laughter.) “That is light, surely,” declared the Prime Minister in an astonished tone ; but he was reminded that these articles were mainly backblocks commodities, end that publio servants used electricity. The Prime Minister replied that ho had looked into the question of clothing, and was satisfied there had been a very important drop in prices. “ I have seen members lately going about with new suits,” he remarked. “Very few,” interjected Mr Forbes, sadly. Mr Massey: I haven’t had a new suit for eighteen months, but surely members in this House have been able during the past few weeks to provide themselves with decent suits for £6 and, in some cases. £6. A chorus: WhereP Mr Massey: In the g£sg»(Laughter.) Mr M’Nicol: I can show y«® ft gait bought for £4 10s. Mr Poland: It’s a boy’s size. <£Zd9Rld laughter.) Mr Massey declined to lautfl with tfie House, as he was waiting to Tead more statistics. He gave members details furnished by a wholesale firm of importers, the general effect of which was to show that drapery lines bought from England had dropped 40 to 60 per

cent compared with the highest prices. Becoming somewhat mixed in the maze of figures, he assured the House that gabardines had dropped from eighteenpence to 5s lOd a yard, but the first figure turned out to be eighteen shillings. DEFINITE FACTS DEMANDED. “ I want to know the basis of this Bill,” demanded Mr Wilford, “ and I ask for proof that the cost pf living is 52 per cent against 62 per cent, as it was in 1920.” It was quite impossible, he added, to accept the Government Statistician’s bald statement, which was admittedly based only on food groups without regard to clothing, lent, light and fuel. He also wanted to know where was the Economy Commission’s report. The Prime Minister’s reply to the last demand was that the report did not deal wholly with salaries, but proposed many important savings which would—be carried out, because in addition to what was being done in the Retrenchment Bill the Government would require another million. THE ALTERNATIVES HINTS OF DISMISSALS. After the Prime Minister had listened to many declarations of war on retrenchment from the Labour benches, he told Parliament what would be the alternative not 02113’ to the Public Service, but also (by way of hint) to the Government itself if these proposals were not adopted. He had previously mentioned that more than 3000 Publio Servants had been dismissed as the result of retrenchment, and he was asked ay Mr Brown (Napier) whether rejection of the Bill would not cause further dismissals. “My answer Yes,” replied Mr Massey. It is the only alternative. I will not do it—l say that plainly—blit there is no other way. There is another course of action in the event of 1 his Bill not. being carried, but that is not a matter for discussion at present. If Parliament does not give effect t-o these proposals it will mean that thousands of men now in public employ will go out into the streetLabour Members: Will you ask for a dissolution? Tli© Prime Minister provided no further enlightenment

THE DISCUSSION. (Per Press Association.) WELLINGTON, January 24. In committee on the Publio Expenditure Adjustment Bill the Prime Minister explained the amendments proposed. He recapitulated figures dealing with the financial position of the country. He said he proposed only to take the short title and postpone further discussion until the amendments could be circulated and studied. The increases in the cost of Government now were 4£ millions per annum. He referred to the Railway Department, the gross increase in expenditure on which last vear amounted to £1,531,534. Of this £865,000, or 56.19 per cent, represented increased cost of wages, salaries and conditions. The balance was due to added cost of materials. He repeated what he said in moving the second reading, that the cost of government was too great for the country to bear and must be reduced. He said it had been decided to amend the nroposals covering reductions of the second bonus of £SO. Instead of making the first cut as from January 1, the second on April 1, and the third on July 1, it was now proposed to make the first cut during the current quarter, the second to be delayed till the July quarter, and the third not to be made till January next year. In the case of married men with families, concessions would bo made so that they would not be hit so hard by the reductions. In the case of young public servants only £25 would be taken off the bonus, and this would be spread over two cuts. He pointed out that only the second cost of living bonus was affected, not statutory salary or increments. The total personnel of th# Public Service was thirty-six thousand, of whom 8707 were married n\en, and 17,281 men, women and cadets were getting under £3CO per annum. Inquiries had shown that there was practically no difference in the cost of living as shown by the food groups against all groups on April 1, 1920. The relative figures were 62 and 63 per cent above 1921. He quoted the prices of various items of food, and added that he was informed that there had been a considerable drop in the cost of lighting materials and clothing. Draperv in the past year dropped 60 to 80 per cent. The proposals, if given effect to, would effect a saving of approximately £BOO,OOO on the first cut £700,000 on the second and £650,000 on the third. It was an unpleasant duty to bring down these proposals, but it had to be done, and he was doing it and was prepared to take the consequences. The time had arrived when all must make sacrifices.

Mr Wilford, leader of the Opposition, said that the treatment of people in and out of the Public Service was unfair. A man outside getting less than £3OO a year escaped income tax. A man in the Government service was called on to contribute some of his salary to the State. Mr Wilford contended that the data on which the cost of living was calculated were unreliable. He challenged the Prime Minister’s statement that the increase in the cost of living had dropped from 62 to 52 per cent over that of 1914. He quoted cases of higher-salaried men in the Public Service who would lose little or nothing as compared with the lowerpaid. The latter should have an opportunity of getting each case reviewed. He suggested that the plan of Civil Service salary reduction, followed ii England should be followed. Mr Holland, leader of the Labour Party, said he would repeat that the Labour Party was against any wages reduction at all, but if it was necessary to raise money all should be taxed. Labour regarded the proposed reductions in Public Servants’ pay as paving a way to a general reduction of wages throughout the country. The Government, in granting a rebate of land tax, had given away an amount of money equal to that which would be eared by the proposed Public Service salary reductions. The cost of clothing had ad-' vanced by three to four hundred per cent on pre-war prices. He controverted the statement that there had been any considerable decrease in the prices of clothing. The bonuses paid to the lower paid ranks of the Civil Service were barely sufficient to meet the added cost of living. Mr Veitch considered that the Public Service as a whole rendered faithful service, but in making reductions the cut on the lower paid ranks should be less, and more should be taken from those receiving high salaries. Mr M’Combs questioned the accuracy of the Premier's figure® on the subject of the cost of living, and contended that the 62 percentage ©f increase in salaries and wages was not nearly so great as the increase in the cost of living, amounting to 77 per cent. Mr Btatham said that the incidence of the proposed reductions was unfair. He proposed to move an amendment to Clause 4 when the time came, that no reduction should be made on any salary

under £509, so that members of Parliament would come into the scheme. After that reduction would be at the rate of ten per cent. Dr Thacker asked if the country was given a true statement of the financial nosition, contending that this had not been done, and that the present difficulties were due to the way money was squandered during the war period. Mr Masse;/, in further reply, said he had just received figures of the amounts expected to be saved by the proposed cuts, as follows: —First cut £809,609, second £645,690, third £430,460, total £1,885,840. Referring to the rebate of land tax Mr Massey said that if this had not been granted he w'ould have had difficulty in collecting the tax. Mr Mitchell contended that a married man with a family was going to% be reduced from 8s per head per week to 5s 4d per head. The money that was going to be saved was as nothing compared with the hurt done to that man’s family and to the race by this deduction . /

The Hon J. A. Hanan put in a pleaL for reduced cost of government in the l Dominion. If this were not done we should have a financial panic. Ho did not wish to lower the standard of living, but he did think the higher salaries could be reduced. Mr Jennings thought the solution of the problem was not reduction of salaries, but stoppage of waste. Mr Sidey asked if the country was in such desperate financial straits, why a rebate was given on land and income tax. The Public Service was the last | to receive the cost of living bonus, but was the first to be asked to give it up. Many public servants lived in boardinghouses, especially in Wellington, and they received no benefit from the reduced cost of living, because the board-ing-house tariff had not been reduced in keeping with the fall in 'the cost of living. Mr Lysnar said that everyone felt that reduction of salaries was a painful operation, but the House had a duty to do to the Dominion as a whole, and it was their duty to do it. There would be no reduction in the cost of living until wages were down. If ; people had not the spending power prices must come down. Replying to Mr Brown, Mr Massey said that if these proposals were not agreed to the only alternative was that thousands of public servants would be dismissed from the service. Mr Keilett said the man who was going to be hit hardest by these reductions was the man getting daily wages, and he asked the Premier to say how he justified that. Mr Howard said the only scientific way to get the money required was by increased taxation, and those who had big incomes should be made to pay. Mr Savage endorsed this view. The nresent method was merely a raid upon waees generally. Mr Fraser said the Premier’s promised relief to married men was merely charitable aid* They had to provo hardship to someone who was to probe into their private domestic affairs and have power to discriminate between this man and that man. If the Premier would define the position in a schedule it might be a different matter. Dr Newman objected to the retro spective aspect of the Bill. All retrospective legislation was bad, and he suggested that the Bill should not operate until next March. Mr Mackenzie said he was glad the Premier was providing some sort of loophole for the married man with a familv by giving him the right of appeal, but he feared the concession was of a rather shadowy nature. Mr S. G. Smith (Taranaki) twitted the Premier with inconsistency in at. one time declaring that the price ot our products was going up, and in the next breath declaring that the cost of living was coming down. He thought the treatment of teachers was most unfair under this scheme. He thought teachers’ reductions should be put in a schedule and not leffc so indefinite. Mr Sullivan said the Premier had stated the country as a whole was not able to bear the burden of taxation at present pressing upon it, but under the Bill he was asking a fifth of the population to bear a burden which he said was too great for all. The debate was closed at aim., when a division was taken on the first clause, which was agreed to by 61 to 7. Progress then was reported and the House rose at 12.22 a.m. Those voting against the clause were Messrs Holland, Fraser, Savage, M’Combs, Sullivan, Pairy and Bartram. NEW CLAUSES. KAILWAYMEN’S AGREEMENT FOLLOWED. (Special to the “ Star.”) WELLINGTON, January 24. Amendments drafted in accordance ; with the Prime Minister’s announce- 1 ment of Retrenchment Bill modifications show that it is proposed to authorise the Finance Minister, if he is satisfied that the terms of any agreement or arrangement entered into between the General Manager of Railways, on behalf of the Minister of Railways, and any society or association of employees of the second division of the Government Railways Department would effect a reduction of expenditure in respect of the salaries or wages of those employees not less than the reduction that would be effected by this Act he may, by order in writing, exclude members of such society or association from the operation of the Act. It also is provided in another new clause that the original clause cover ing reductions in salaries under £BOO. and wages of persons working on hourly or daily rate shall be substituted by the following provisions for reduction— (l) In case of persons not paid at an hourly or daily rate the rate of reduction shall be £lO per annum, increased by £5 per annum in cases where such rate of remuneration exceeded £l9O per annum, and by a further £6 per annum where such rate exceeded £320 per annum, and by a further £6 per annum where such rate exceeded £SOO per annum. (2) In case of persons paid at hourly or daily rate the rate of reduction shall be 8d a day or its equivalent, increased by 4d a day cu; its equivalent in cases where such rate of remuneration exceeded £l9O per annum, and by a further 4d per day or its equivalent where such rate exceeded £330 per annum.

PUBLIC SERVANTS 5 PROTESTS MEETINGS OF PROTEST. (Pep. Press Association.) AUCKLAND, January 24. A meeting, attended by a thousand members of the Public Service, passed a resolution asking Auckland M.P.,’s to oppose the reduction of salaries. NAPIER, January 24. A public meeting of Civil Servants of all Departments to-night passed a resolution resenting the proposed salary reductions, and urging the executives of the Public Service Association in various parts of the Dominion to arrange for the stoppage of work immediately the reduction is nut into opera-

tion, and to convene a conference for the purpose of letting the Government understand that public opinion is satisfied that there is no necessity for reduction of workers’ wages while other legitimate sources are open for taxation. OAMARU, January 24. At a large mass meeting of Oamaroi Public Servants, held to-night it was unanimously decided to endorse the resolution passed at the meeting of Public Servants held in Wellington. A resolution also was unanimously carried expressing appreciation of the efforts of the New Zealand Labour Party in their endeavour to prevent a reduction in the salaries of Public Servants.