PRIME MINISTER.

Star (Christchurch), Issue 16749, 2 June 1922, Page 9

PRIME MINISTER.

INVERCARGILL SPEECH. TAXATION REBATE. (Per Press Association) INVERCARGILL, June 1. The Prime Minister -delivered a political speech in the Municipal Theatre to-night. The Mayor, Mr J. I • Lillicrap, presided, and the building was crowded. . Mr Massey, who was very well received, said that the responsibilities of the country had boon enormously increased by its part in the war. The public debt practical!y had doubled during the war period, but they were able to meet their obligations, though they had had a serious time. The cost of living had risen enormously and necessitated additional payments to public servants totalling 4$ millions. The cost of tho requirements of tho chief I>epartments increased from 100 to 300 per cent. Nothing would benefit; the country so much as reduction of taxation, which was an enormous burden, but concurrently with the rise of expenditure the national income had decreased tremendously. Their duty was to endeavour to make burdens easier. They had to reduce the cost of government, cost of living and cost of production, and then followed a reduction of taxation. They must ir crease the output of tho country. The problem had been tackled and up to the presen t not unsuccessfully. The Expenditure Adjustment Act passed last session, with a little opposition that was merely camouflage, reduced all the higher salaried from that of the Premier down. They aimed at getting back about half the public service bonuses, but he did not know if they could do so. Retrenchment was a most unpleasant work. Not only were salaries increased, but Departments had swollen during the war, and all the surplus officers had to go. Tie never had tackled anything so unpleasant. Much had been done, but much, unfortunately, remained to bo done. Dealing with taxation, Mr Massey said that taxation here was a-s nearly as possible half that in Britain. He quoted a comparison with the Australian States to show that the income tax in the latter was substantially more severe than in New Zealand.

The loan was a very satisfactory transaction, ami showed the confidence of the British financier in the Dominion. He thought the corner had been turned. Money would be cheaper still, and in his opinion mortgages m broad acres would before long !>e a favourite security in the Dominion. Referring to the rebates on land and income tax. he said t-lic experiment was a great success. Money came in as well as at any time before the slump. He could not say what would be done next year. Jf he could reduce taxation by the amount of the rebate he would be glad to do it. It was possible that the rebate system would l>e continued. He hoped that the Taxation Committee now sitting would be able to offer useful suggestions. During the last five or six months there had been a. great improvement in the financial and commercial position, partly due to the meat pool, which already had done splendid work. There was no occasion for a wool slump if the shipments had been properly handled at Home. Accumulations had nearly gone, and soon the market would depend on ordinary supplies. He predicted that the new season would open with wool prices higher than now. The present year, from tho Government finance point of view, was going to be the worst- of all. because the improvement in conditions would not have time to take effect,. The accumulated surpluses carried forward from previous years would be required and were available- They could expect a two million drop in income tax. At Foil ding ii© put it plainly. 'There wa«i a deficiency of £330,000 on the year’s accounts. Referring to criticism of railway freights, he said that freights in New Zealand, though high, were the lowest in the Empire. He hoped that it soon would bo possible to reduce rates. During the past session in tariff revision they did something for secondary industries and ho was pleased to note, at the splendid Winter Show at Dunedin, some of the results of that encouragement, which liad not been given at the expense of the primary industries. He was glad to notice whin he was at Home an increased disposition to give preference to Dominion produces, which he hoped would 1k» translated ore long into more effec-

tive Imperial preference. He did not think that tree trade within the Empire was by -ny means impossible, but they must > are closer relations in trade, finance and defence.

Reverting to last- year’s deficit. Mr Massey emphasised that they had coal worth half a million in stock as a result of liecessarv importations to keep the railways going. He hoped it would never again no necessary to go outside the country for coal. If they had not spent tho money on coal they would have had a surplus. Similarly if they had not given taxation rebates they would have Lad a surplus, but in both instances the right thing was done. A further relief of taxation they effected last season was increasing the mortgage tax exemption of small men from £4OOO to £6OOO, which the Commissioner of Taxes informed him affected 10.100 persons. Soldier settlement was costing a very barge amount, but lie did not admit that the tax was going to be heavy. Settlers had struck hard times in which many experienced farmers had come to grief. Most of the soldiers were triers, and he was sure the majority would face their difficulties and come through. There would be losses in connection with repayments. He believed those who had taken up sheepfarming would be all right, but where men had bought land at too high a price they would be all failures. Tho Government had never turned a trior out, and was going to fee them through. He urged people not to discourage the soldier, but urge him to stick to his land. When tho slump was over and things had settled down they would have many thousands of useful settlers added to the producing population as a result of what had been done for returned soldiers. Dealing with what the country had done for returned soldiers, Mr Massey quoted a return as follows: £ Land purchased under Land for Settlements Act . 5,816,840 Advances for purchase of private or native, land . 6.724,149 Advances towards purchase of Crown Vasehokls . . 1,618.939 Advances towards discharge of mortgages . . 433,007 Advances for purchase or erection of town dwellings 7,747,313 Loans for business, etc., and other financial assistance . 2,197,956 Advances for purchases of stoek .... 3,903,468 Total . . . £28,441.317 Of the amount of £19,759,606 advanced under the Discharged Soldiers’ Settlement Act for purchase of homes, there had been -epaid £1,477,151. Of • the loan of £1,803,194 under the ReI patriation Act for the establishment I of businesses, purchase of furniture, | etc., there had been repaid £911,110 Mie total repayments were £2.388.261.

I Land held for settlement and ready tor selection amounted to 430,000 acres. The Prime Minister quoted tho rej turn he had read at Feilding showing | the expenditure under permanent • charges for the year ended March 31, 1922, compared with the corresponding period of 1914. Ho also quoted a detailed comparison of income taxation with New South Wales and the Commonwealth and Victoria and tho Commonwealth. Dealing with pensions and other humanitarian expenditure of the Government, Air Massey quoted a speech by Mr Stabh&m in which he eulogised the Government as the friend of the widow or fatherless. Turning to economies effected by the Government, the Prime Minister read «i return showing saving under the consolidated fund £4,159,336, other departments and services £1,054,499, total £5,646,835. Increased charges, however, totalled £010,085, and scale increases and classified salaries £226,443. In tlie course of a brief reference to the coming elections, the Prime Minister said Mr Holland liad stated that be would help Mr Wilford to turn the present Government out, on condition that tlie Liberals did what Labour dictated when they occupied the Treasury Benches, otherwise he would help to turn the Liberals out. That, statement had been made in & manly and straightforward way by Mr Holland in a speech to his constituents. He (Mr Massey) would not hold office for two minutes longer than he could help if he were dependent upon the support of tho extremists. lie wished to impress upon the people of the country the importance of a stable Government until they got through the? present crisis. There were only about two on the Treasury benches now’ who were with him when they started. but members of the present Government were of the same characteristics as the first who held office. Their aim throughout had been the same, and he pointed to their record of administiation, which, lie contended, entitled the Government to anothei term of office. The Prime Minister was accorded a vote of thanks. VISIT TO SOUTHLAND. (Per Press Association) INVERCARGILL. June 1. M?’ Massey reached Invercargill at midday, and proceeded after lunch 10 Otautau, where ho unveiled a soldiers' memorial in tho presence of a very large gathering. Tito Premier was accompanied bv Sir William Fraser, Mr A. Hamilton, M.P., and Mr J. R. Hamilton. M.P., and representatives of pul> lie bodies. He returned to town after tho ceremony, and this evening ho deli vered a brief speech on general politics in the Municipal Theatre. To-morrow he will be the guest of the Southland League at luncheon, and will receive various deputations, leaving for the north in the afternoon. Tn reply to a question by a reporter to the Government’s attitude regarding the proposed dairy produce pool. Mr Massey said that lie had not yet been officially approached, and could not state what the Government's attitude would