RAILWAYS UNDER DISCUSSION IN BUDGET DEBATE.

Star (Christchurch), Issue 18543, 17 August 1928, Page 2

RAILWAYS UNDER DISCUSSION IN BUDGET DEBATE.

no interference with banks, says minister

Per Press Association. WELLINGTON, August 16

In the House of Representatives today, the debate on the Financial Statement was resumed by Mr H- T. Annstrong (Christchurch East), who said that the Budget made it appear that the community was growing in prosperity every day. but people were never so poor as they were at the present time. We were told that our trade balance had improved to the extent of fifteen millions, yet unemployment was rampant, and soup kitchens were in operation. Never in the history of the country had people been so uneasy. The farmers were discontented. Hon members-: No, no.

Mr Armstrong said he would be sorry j ( to think that the farmers were repre- j < sented by members who objected to the declaration of such an obvious truth. The claim that our position would improve with increased produc- , tion had not been proved by the experience of the past. The cost of living had gone up, and with the purchasing power of the people reduced, it followed that the standard of living must be reduced. It was true that certain sections of the community might be enjoying a period of prosperity. The banks, for instance, were, because they were making more profits to-day than ever they had before. The Budget stated that the deadweight of debt had been lifted from farmers, but the fact was that farmers would continue to struggle under the deadweight of debt until the State stepped in and relieved them from the enormous profits won just at present by the banking institu- | tions. The State had gone into the insurance business, and so far as it went it had been a pronounced success, but instead of the Government encouraging State concerns, they seemed to be far more interested in the success of privately owned concerns. At present insurance companies insuring against accident took nearly half of the amount paid in premiums, which was the clearest proof that it was time our State Department became more active. Last year the insurance companies benefited to the extent of £221,000 out of accidents alone. It was never the intention of the Act that this should be so, and if the State Office had increased its j^nefits or reduced its premiums it would not have been long before it obtained a complete monopoly of accident insurance. The facts in connection with the insurance business were so striking that he felt it was time the Government began to pay some attention to the views which the Opposition had been persistently pressing upon them. Discussing the public debt, he maintained that it was useless to claim credit for reducing one portion of the debt if another portion and the general interest charges had increased. lie condemned the management of soldier settlement, and declared that the Budget out no hope. No reduction in taxation was proposed, and next year, if it was reduced, it would be people who did not require it who would get it. The Government’s intention was still further to increase taxation to the poor in order that they might reduce it to the rich, but he hoped the people of New Zealand would so deal with the situation as to frustrate the policy as it was outlined in the Budget. Mr Girling (Wairau) defended the

Government for putting a limitation upon Post Office Savings Bank deposits. This was not done in the interests of private banks, but because it was unwise from the point of view of public finance that large sums should lie at call, as sudden withdrawals might often embarrass the Minister. Besides the Post Office Savings Bank was never intended for the large depositor. It was the people’s bank, where people of small means could deposit their weekly savings. Discussing taxation he contended that farmers were being made to pay a fair share. If income tax were substituted for land tax most big land owners would be paying less than they now paid in land tax, and that was a complete reply to the Opposition contention that large farmers w r ere not bearing a proper share of their burdens.

AN ABSENCE OF POLICY. Mr G. W. Forbes (Hurunui) said there was a time when the Budget was a Budget, and when it contained a considerable amount of information to which one could look with confidence. Of late jears, however, it had been growing smaller and smaller and visibly shrinking. This was evident when one examined it to see what policy the Government had enunciated in it. He had looked in vain to find any concessions to the people. Was there to be any reduction in taxation? Evidently not. The most the Minister of Finance would say was that when the revenue permitted it he would not lose sight of company taxation. When it j came to racing club taxation there was ; no. promise cf relief, only an expres- j sion of a vain and distant hope. The Government had said they had a pleasant surprise in store for motorists, but so far nothing had materialised except a promise of reduced fees. The Jong term loan scheme, for which power was given to the Bank of New Zealand in 1926, had proved a fiasco. The bank had been given power to raise five millions to lend to farmers at 6 per cent. So far only £319,761 had been lent out, and of this the Government had found half that amount, so that the much vaunted scheme had fallen far short of public expectations. The efforts of the Government to effect departmental economy had been futile and were scarcely worth talking about. The Minister practically threw up his hands and admitted that while people asked for public works and social services they must get what they asked for; he was unable to say “No.” And so the public debt mounted up, but the peo-

ple were not given plainly to under stand that they were paying for it The Government tried to create an im-

pression that when people asked for a railway the Prime Minister the man who got things done,” simply took it j from his hat and gave it to them. In former Budgets there was always a statement regarding land settlement. To-day that had disappeared entirely. That meant that nothing was being done in the matter of land settlement., or that what was being done was not worth mentioning. This was very different from the days when people looked to closer Settlement to bring the country out of its troubles. The dismal story of soldiers’ settlements was repeated. What surprised him was that the people had been so patient in the face of the loss of five millions on these settlements, and he thought the sooner all reference to it w T as removed from the Budget the better, unless there were further losses to be written off Our railways were still going back, and since the Prime Minister had banded them over to a general manager it was a clear admission that the job . was too big for him. He disagreed altogether with the policy of running buses in conjunction with the railways, and hoped the general manager would stop it at once. What we made by the railways we would lose in buses. With regard to public works, he suggested that proposals should be examined by some special board. There was at pre-

sent a very general impression that railways were being put in hand which never should be built. What they wanted was a complete examination of the whole position, and he challenged the Prime Minister to put the whole of the facts be.fore Parliament. Although it went through a great part of his district, he would not advocate th*» completion of the South Island main trunk line unless an examination showed that it was warranted. RAILWAYS. The Hon A. D. M’Leod said that Mr Forbes had taken up a good deal of time, but he had made no useful sug gestion of any kind. In reply to Mr Forbes’s objection to buses being run in connection with the railways. h« said that railways in all parts of the world were experiencing keen competition from road traffic, and where they were run by private companies they were going to the Parliaments of their countries and asking for the right to run buses. They had not done this ! without careful consideration, and the j New Zealand Government had not rush led into the scheme rashly, but had J come to their decision deliberately, lie defended the construction of the RotoI rua-Taupo railway as opening up the ! Largest area of Crown land suitable for J closer settlement. Replying to critij cism of the banking position, the Minister said he had had a good deal of sympathy with the idea of a State bank. He had read a great deal about it, and he had discussed it with men of experience, and had looked into it on the spot in Australia, but he would certainly have nothing to do with it unless it clearly and specifically placed the executive of the bank beyond the sphere of political interference. Politi cal interference had been a great trouble to the Commonwealth Bank, and it was not till it was placed outside the influence of Parliament that it became safe. The Government had not interfered with their representa tives on the Bank of New Zealand board, and with that non-interference he, entirely agreed. It had been said that the Government was stopping the 1 j establishment of an agricultural bank, i but that was not so. The fact was that ' many people did not know what they meant when they talked about an agricultural bank, which, if it was ’ going to be of any service, must be the same as any other bank. The Gov- ' ernment’s policy in connection with Post Office Savings Bank deposits was ’ necessary, because large deposits on : call were of no use to the Government • whatever, and it was better to get rid : of them.

SOLDIER SETTLEMENT. Coming to soldier settlements, Mr M’Leod declared that even if there had been mistakes, they were honest mistakes. No one had had his palm greased and no country in the world had done so well in repatriating its soldiers as New Zealand had. The leader of the Opposition had a great deal to say about these settlements, but at no time did he ever forecast that there was going to be a slump after the war, and that there would be any difficulty about repatriation. On the other hand, the leader of the Opposition had voted for a gratuity to soldiers that would have absorbed the whole of the accumulated surpluses and left the soldiers no better off. On the subject of taxation paid by farmers, he believed that in general farmers would prefer to pay land tax rather than income tax, because of the simplicity of the return .which had to be made up for the former as compared with the latter. It had been said that settlers had been pushed off their farms and that those farms had been given to others at a lower price. He frankly admitted that this was so in some cases, but that did not tell the whole story. Investigation had shown that many of these men had. never paid any interest at all. Tf the land was not worth £3OOO it was worth £2OOO, and if not £2OOO then it was worth £IOOO, but the settler must

pay something, and when he could pay nothing then it was no use trying to carry him on any longer. The Minister claimed that his administration had been most sympathetic, and he believed that the worst days of soldier settlements were over. As to the assistance given to settlers generally, he said that advances made to settlers here now amounted to fifty millions, fourfifths of which were made since Reform came into power. Taking the whole of Australia, with its greater area and larger population, the total advances amounted to seventy-eight millions, so that it could easily be seen that the Government had done extremely well in assisting people with liberal advances. Discussing deteriorated lands, he denied that anything like five million acres of land had gone back. That statement was a gross libel on the Dominion. He was confident a great de.al of this land would come hack into profit if economic conditions would justify the labour it must carry. RAILWAY LINE CRITICISED. Mr Mason (Eden) criticised the Public Works policy, contending that no railway should be built unless its construction could stand the closest examination. This seemed to apply with especial force to the proposed RotoruaTaupo railway, which to him seemed to justify the statements of people who wrote to the papers and said iit would not pay axle-grease. To build ; this railw’av would cost tens of thou--1 sands of pounds, and then they would I have land limited in quantity and of such quality that was doubtful if it would pay to expend money to improve it. The debate was continued by Mr Reid (Waikato), ajid the adjournment was moved by Mr Hudson. The House rose at IIAO p.m.