NATIONAL FINANCE

Waipa Post, Volume 41, Issue 3188, 14 August 1930, Page 5

NATIONAL FINANCE

PRIME MINISTER’S CAUTION. MR W. J. BROADFOOT’S VIEWS. In the course of the debate in Parliament on the Budget, Mr W. J. Broadfoot, M.P. for Waitomo, put forward some suggestions that must provoke thought among his constituents, and perhaps also among his fellow members of Parliament. He said:— I have been analysing the figures in connection with customs duty. The customs duty brought in last year amounted to £8,897,000. The Prime Minister has estimated that there will be a deficiency this year of £1,150,000. I think he is justified in being cautious in his estimate, because we find that the customs imports last year were £4,000,000 in excess Of those in the previous year. That leads one to believe that the imports will be down considerably during the current year. If they are, the revenue will suffer. On comparing figures I find that there is likely to be a reduction in customs this year, as against last year, of £320,000. The volume of imports will shrink, and the rate of the customs charge must be expanded.

Another matter I would like to refer to is the fact that in the Old Country, although they put a duty on foreign ears, they will not put a duty on trucks and motors; and I think this is a question we have very seriously to consider—the relief of duty on trucks and tractors. Transport enters into the cost of production and the cost of living to an extent which few people realise in this country. Like everybody else, I deprecate the increase in taxation, but it is unavoidable. I cannot possibly see how we can do without it. much as I dislike it, and when you realise that every country is suffering in the same way as we are I think we have done the right thing in the present circumstances. Study what has been done in other parts of the world; take the World Economic Conference, where it was definitely stated by about 150 representatives of 54 countries that the great problem of to-day was the low price at which the farmer had to sell and the high price he had to pay for everything he bought. Furthermore, at a subsequent conference, it was openly stated that the greatest factor causing unemployment to-day—and, mind, this was stated at a huge conference of capable men from all over the world—was the increasing tariff walls rising round every country, regardless of its geographical situation, regardless, of its position in commerce, regardless of what it was naturally suited to produce. Every country is trying to be self-contained, which is an' impossibility.

If we are self-contained we cannot trade, and anything that interferes with the free flow of the trade of nations brings trouble in its < train. Now, we have heard much criticism on the question of the estimation of revenues. Our Prime Minister is charged with budgeting too extravagantly; he is budgeting too high. I do not think that is borne out by fact, and to show that he is only doing what his predecessors did I have extracted the surpluses friom 1912 to 1927, and these surpluses average from £430,000 up to £3,000,000. I think that the charge being levelled against the Prime Minister of estimating too highly is incorrect. We have the ‘operations of the Reform Party for very many years past showing the difference between their estimates of revenue and the amount actually collected as varying from hundreds of thousands of pounds to millions. Now, on the question of taxation, we have to face certain very awkward questions to-day. Take the question of the Consolidated Account. It has to pay for the sins of many transgressors. Let us consider the question of Arapuni. It is not running, and who is paying the interest and sinking fund on Arapuni while it remains dormant? Say at 6 per cent, interest and sinking fund, we have £150,000 per annum, and this has to come out of the consolidated revenue to meet that little disaster.

Mr J. A. Nash: We had to pay on all the others while they were not working. Mr Broadfoot: But two blacks do not make a white; and there are many other liabilities created, unfortunately, by our friends on the Reform benches which have put this Dominion in the desperate financial plight of to-day. Take the Waihi-Taneatua railway. There is a loss of £150,000 per annum on that, and this loss must come out of the Consolidated Fund and be raised by taxation. On operating the Kirikopuni railway, too, there is a loss of £15,000 a year; while a sum of £2,500,000 has recently been locked up in the Auckland railway station, and this will jvroduce no revenue at all. Again the Consolidated Fund must pay. I think, moreover, that the reorganisation of the railway workshops, instead of saving £275,000 as prophesied, will cost us £250,000, which is only about £500,000 out in the estimates. This sort of estimating has been rampant in the past, and must stop. The figures quoted give one some idea why extra taxation is required. It has to be raised, and has to be collected; but I think we must seek every possible way to reduce taxation on the necessaries of life.

There is another disquieting factor which proves that we have developed this country on ill-balanced lines. When we search the eYar Book we find, on comparing the volume of exports with the indebtedness, that we are in a rather invidious position. The price of our products is a very misleading guide, as many people have found to their cost during the past two years. We find that from 1914 to the present time the volume of our exports hias increased only 50 pter cent, whereas our national indebtedness has increased 150 per cent. And where is the difference to come from ? It must come from taxation, and once again the Consolidated Fund has to bear the burden. I think the difficulty in this connection has been brought about by a rather grandiose effort toward developing cheap light and power in this country. Our hydro-electric system has been developed at the expense of land settlement. If one-third only of the

money had been spent on el/ectrio schemes and the other two-thirds had been spent on developing idle lands we would have had a better-balanced Dominion to-day. That ill-balancing is a legacy from our friends on the Opposition benches. But I want to make it quite clear that in our total national indebtedness there is a war debt of £90,000,000. Still, when we examine the position closely, and realise the wonderful opportunities that science has given us to increase and intensify our production, I think we must realise that we have failed to keep a correct and safe ratio between volume of exports and national indebtedness.