THE PREMIER REPLIES

Wanganui Chronicle, Volume 72, Issue 200, 23 August 1929, Page 7

THE PREMIER REPLIES

BUDGET PROPOSALS DEFENDED WHAT THE GOVERNMENT S INTENTIONS ARE SEVEN MILLION LOAN WILL BE AVAILABLE SOON In a speech which lasted two hours and ten minutes the Prime Minister (the Rt. Hon. Sir J. G. Ward) made a spirited defence of his Budget provisions in the House of Representatives yesterday. He dealt with points raised by critics of his administration dealing, in particular, with taxation of farmers, the primage duty and the withdrawal of subsidy to the Highways Board. He mentioned that he had obtained a £7,000,000 loan and had arranged for raising £4,000,000 locally for settlers and workers.

[Per frees AssnciatMu ; WELLINGTON, Aug. 22. The House of Representatives met at 2.30 p.m. and proceeded immediately with the debate on the amendment moved by the Leader of the Opposition. The Prime Minister (Rt. Hon. Sir J. G. Ward) dealing with the reference by Mr Coates to the inclusion in last year’s accounts of £156,000 interest on loan conversion transactions, stated he had made this payment on the advice of the High Commissioner, who had been requested by brokers to arrange for this step at such an early date. Sir Joseph read the extracts from the cables to and from the High Commisioner on the subject, and stated that he had no other course open to him than the one he had adopted. He had already referred to the effect abroad of a deficit in this country, and it was his duty to take no risk whatever that there should be a repetition this year. Mr Coates had stated that there was a heavy increase in the revenue for the first quarter. The Prime Minister pointed out that, since his party had taken office, there had been an unavoidable increase in expenditure of £1,570,000, and he had satisfied himself that the whole of this amount could not be obtained from ordinary sources. What would the Reform administration have done? Would it have permitted a second deficit to face the country. Experience had shown that the revenue figures for the first quarter were a very unreliable guide to the outcome of the year’s operations, but even had that increase been maintained, there would still have been a shortage of £600,000. Public Trust Revenue Sir Joseph Ward stated he had been criticised for taking half the Public Trust revenue. This had been done under provisions of Statute which had been observed without any injustice to the Public Trust Department. He was satisfied the time had come for some of this Department’s profits to be allotted to the Consolidated Fund. In regard to the highways grant, he stated ample funds were available for all work that had to be carried out during the year, and it had not been necessary to make the annual grant of £35,000 out of the Consolidated Fund. It would have been ridiculous to have allocated more than was necessary in one direction while there was an urgent necessity for funds in other directions. Mecause the grant had not been made this year it did not mean that the same course would necessarily be followed on future occasions. There could be no doubt that the Government was justified in saving the Consolidated Fund in this way. Should it happen on some future occasion that money available for highways purposes was insufficient the question of voting additional amounts of the Consolidated Funds would then have to bo considered in the light of the general financial condition at the time. The Prime Minister stated he had been astonished by the reference of the Leader of the Opposition to the Post and Telegraph profits. Mr Coates had stated that of these profits, at least, could have becu treated as revenue. The Post Office Act provided that these profits should be used for replacement of telephones and services that were wearing out,. and they had been largely drawn upon for this purpose. It was improper to suggest that this money should be taken for any other purpose. The Post Office was now entirely separated from the Treasury and, while under the control of the Government in regard to appointments, etc., it was carrying on its business independently. Post Office and Customs It was only reasonable, under these circumstances, that the Post Office should pay Customs duty on anything it imported ,and should provide a subsidy for mail services, and it was also entitled to keep its whole revenue for its own needs. As a matter of fact, after providing for interest and depreciation, profits this year amounted only to £39,000, and that sum would not have done much to assist in wiping out the deficit. Sir Joseph then referred to transport. He said there was a Bill now before Cabinet to constitute a transport branch in this country with the object of eliminating unnecessary competition, and enabling both private concerns and railways to carry on economically. The intention was to handle this difficulty in an intelligent way, and endeavour to enable both systems to pay. He said Mr Stewart had stated that a large portion of the deficit had, obviously, been due to transactions after he (Mr Stewkrt) had relinquished office. Actually, the Prime Minister stated, he had reduced Mr Stewart’s estimated expenditure

for that portion of the year by £90,000. What justification had there been for this statement. Mr Stewart: I referred to the interest item and I said I could not be blamed for that, nor could anyone else. Sir Joseph Ward: That explanation is quite satisfactory. I shall deal no further with the subject. He denied the suggestion by Mr Stewart that he was imposing additional taxation for new liabilities. No new proposals had been included. In the course of reference to the superannuation fund the Prime Minister stated it had been necessary to place this fund on a sound footing. “State of Insolvency.” It had rapidly been approaching a state of insolvency and it had been essential that it should be reimbursed. Replying to criticisms of the reduction in mortgage exemption, he stated that when farmers received their notices of taxation, they would find the position was not as some Reform members had led them to believe. He read a letter from the Commissioner of Taxes stating, in effect, that there were approximately 80,000 fanners in the Dominion, of whom only about 25,000 pay either land tax or income tax. Reduction of mortgage exemption woula increase tho number by 550, and would increase the land tax payable by £1650. The only individuals who would be affected would be those who occupied property of an unimproved value exceeding £5OOO and most of these would be affected only to a comparatively light extent. Existence of mortgages did not necessarily indicate indebtedness in all directions, as many people, whose properties were mortgaged, owned other interest earning assets. Supertax on properties of unimproved value exceeding £12,500 would not affect the ordinary farmer. There were only about 1750 people owning land of unimproved value in excess of that sum. The revenue that would be obtained would amount to 325,000. “Farmers Not Paying Their Share.” He condemned the removal of the tax on farmers at the end of the war, and said this class of the community had not been paying its fair share of the cost of the war. He next referred to loan transactions. He said that when he assumed office arrangements had been in progress for the floating of a loan of £5,000,000. He had stipulated £7,000,000 and had finally got it. He had had to agree not to go on to the market again for another clear year. Mr H. E. Holland (Buller): When will the seven millions be available Sir Joseph Ward: We will be receiving it soon. He added that he had raised, locally, a loan of £4,000,000 for settlers and workers, and he was going to raise another £4,000,000. The Government was meeting applications for loans, and he was sure the applicants were more pleased to get money at a slightly higher rate than they would be if he had insisted on their waiting while he had held off in an endeavour to obtain money for 4| per cent. He had never heard any complaints from them at any rate. With reference to the suggestion that he had manipulated the deficit, the Prime Minister said the member who had made tho suggestion had his permission to pisit the Department and question the staff, and if it could be ascertained 4 hat he had mentioned anything of the kind to any one he was prepared to resign his office. Primage Duty He then defended the increase in primage duty. He said, even if the cost were passed on, the rate per head would only be s|d. He insisted, however, that it would not be passed on. Furthermore ,the tax was only a .temporary one, and it represented the most economical way of getting revenue to supplement the amount expected under the increased land tax to meet requirements during the year. He had expected that the Opposition would have taken a practical view of the position. The suggestion of Mr McCombs for a super Customs tax on luxuries would have entailed throwing the whole of the Customs tariff over, and, as the need was only temporary, it did not justify such a course. In conclusion the Prime Minister said the Government would stahd or fall by the Budget, which had been framed on the lines its candidates had outlined at the general election. He asked the House to give the question fair consideration, and said that if that were done he had no doubt that the Government’s proposals would be endorsed. The Prime Minister was applauded at the conclusion of his speech, which lasted two hours and ten minutes.