FINANCE DEBATE

Wanganui Chronicle, Volume 80, Issue 255, 27 October 1937, Page 8

FINANCE DEBATE

MINISTER IN REPLY SPEECH BY MR. NASH [ Ter Press Association. ] WELLINGTON, Oct. 26. When the House of Representatives resumed at 7.30 p.m., the Minister ol Finance, the Hon. W. Nash, began his reply to the Finance Debate. He likened the Budget to the first annual report of a new company with a new objective, and stated in reply to the Opposition criticism that there may be some funds going overseas from this Dominion but this was a good little country ana the amount was not large. He considered that the Leader of the Opposition must have had his tongue in his check when he said the Government was taxing the community beyond its ability to pay. He condemned the practice of past Governments borrowing money overseas, stating that the Labour Administration would never aaopt such a course. He also stated that contrary to the Opposition's contentions, the revenue from the rentals on the Governments houses would meet outgoings. Nor did he agree that the country was overtaxed and that money spent on building bridges to obviate level crossings was expended needlessly. Those bridges snould have been built years ago.

A member of the Opposition had issued a warning that the Government could go too tar in the provision of social services. The Minister did not think this was so. They could not go too far in providing social services, but the inference was that if the Opposition came into power t<ose social services would be cut. He admitted that the Budget was a propaganda budget. All budgets were propaganda nuogets, as they told the people what the Governments had done. Mr Nash drew attention to the new pensions instituted by the Government, and said that the past Government had failed to increase pensions m the prosperous periods before the

slump. Speaking of the Opposition's contention that the Government’s housing activities >wcre squeezing out the small builder, he drew attention to the fact that contracts were now being let for two houses. If the small builder could build houses for the prices and complying with the conditions required, he was quite welcome to the contracts. He did not class as fair criticism the statement that the Government was keen on helping the chain stores to drive out the small storekeeper. The farmers, said Mr Nash, were better off now than they had been for seven or eight years, Farm expenditure was certainly up 25 per cent., but oversea returns had gone up 32.3 per cent. Post Office Savings Bank. The member for Central Otago had spoken of the Government freezing the funds of the Post Office Savings Bank. He knew that every £1 put into the Post Office Savings Bank was invested in Government securities. Mr Bodkin had said that £42,000,000 in the Post Office Savings Bank were frozen. Did he object to these funds being frozen Y Mr Bodkin: Not as long as you keep adequate reserves. Mr Nash: How can there be adequate reserves? (Laughter). He slated that there was nothing more harmful than to suggest that the Government was using the Post Oliice Savings Bank funds in any other way than had been used by past Governments. There had never been and never would be any question of the soundness and security of the Post Office- Savings Bank and there was nothing so complete and sure for payment oi capital and interest when it was required.

It hau Deen stated by the Opposition that there was some doubt aoout the Government’s intention to repay the funds borrowed by it if times of Hardship came. That was a libel on the Government. If hardship unfortunately came the Government’s first charge would be the repayment of the money it had borrowed from other people. It would not let the people starve while it made its repayments either. He had been astonished at he Opposition's suggestion that New Zealand had lost prestige in London, out he would draw attention to the paiisfactoi-y prices of New Zealand [Stuck on the London market, a fact wh cl: snowed that some of the leading financial people in London had confidence that tne Government was going along the right lines. The Minister paid a tribute to the Under-Secretary for Housing, Hon. J. A. Lee, for the splendid woik he had none in connection with the Government’s housing scheme and said the sc nt-me was progressing so rapidly khat the s.atistics concerning it were ■altering from day to day. The whole I State advarr. c.s procedure, he said, I was being re-examined to give the cottage builder an opportunity for employment but there was a problem to oe deal, with if the Government advanced ail the money required for State ativances and he felt that if it should there would be a boom and prices of sections would soar. A section valued at £2OO would increase to £3OO and the Government would then be giving £lOO to the owner of the section. He thought there was some way out of the problem. The Boot Trade ; Pealing with the boot trade, Mr. Nash admitted that there had been a decline in that industry in the last month or two. There usually was at this time of the year. He explained that just before the Government’s legislation raising wages and reducing hours the boot manuiacturers had all sought orders eagerly and booked them up. When orders were unaole

to be filled in the Dominion, retailers, in view of anticipated rises in price.*-, had placed abnormal orders overseas. Now the retailers’ shops were abnormally full to meet a normal cemand. In other words, the boot manufacturers had sold themselves out of a job. That did not mein that the Government would not do all in its power to help the boot and other manufacturers in the Dominion. He could assure them it would.

Speaking of industry generally, the Minister of Finance said that production was increasing and he quoted figures of production and employment to prove it. He assured the House that the Government would do its share to see that goods manufactured in New Zealand were manufactured here and

that trade with the Old Country was kept at its peak. Purchase of Picot Brothers. In reference to the purchase by the Government of Picot Brothers, Mr Nash said that the price paid by the Government had been lower than if the company had been bought out by a private company, and the returns were more than amply repaying the Government for its investment. The cost of administering Government departments, he said, was less this year than last, and he continued that one of the gravest indictments of the world to-day was that the present prosperity was owing to money being spent on armaments. Surely money could be spent on something else —something other than instruments of destruction. If it could, the Government would do it. It would use all its funds in the best possible way without inflicting hardship, and would endeavour to place this wonderful country of ours on the road to individual freedom. Progress was reported at 9.25 p.m., and the House rose until 2.30 p.m. tomorrow--