House Continues To Debate The Budget; Financial Policy Of Government Under Review

Wanganui Chronicle, 1 September 1950, Page 5

House Continues To Debate The Budget; Financial Policy Of Government Under Review

PARLIAMENT BUILDINGS, Last Night (P.A.)—-The House of Representatives was occupied today and tonight with a continuation of the debate on the Budget.

Members on the -Government side of the House described the Budget as sound. Opposition members described it variously as being disappointing.

It was the intention of the National Government to make the people believe that more energy was being put by it into the construction of State houses than by the Labour administration, said Mr. Osborne (Opp., Onehunga) when the debate was resumed this afternoon. The Minister in Charge of Housing Construction had been asked repeatedly to give the figures relating to new contracts issued by the National Government, but this infomation was not forthcoming.

The Minister, said Mr. Osborne, should be frank and tell the people that the Government had practically closed down on State House building. ‘ The Government is scrapping Labour's scheme which has been commended ail over the world” said Mr Osborne, “and is substituting a temporary housing scheme. The wholesale construction of sub-standard houses will lead to breeding grounds for tuberculosis.”

He said that up-to-date poultry buildings were of better construction than the Government's temporary houses.

The Minister of Health (Mr. Watts) What rot!

Mr. Smith (Govt., Hobson) asked if Labour, should they regain office, would repurchase the airways to continue making a loss of £328,000 a year. That would not make sense. The Opposition had asked when the sales tax reductions would be passed on to the public, but advertisements already cited many articles, the price of which had been reduced. Mr. Smith praised the Budget as one which took steps to correct the disequilibrium created by Labour. The Government was giving people what they had longed for for years—freedoom of controls on importing, on prices, on building, on land sales and in other directions been eased. Subsidies had been removed but the only effect was that the people now paid the true price of goods directly Instead of paying part of the price in disguished form of taxation. Steps taken to make State undertakings pay were logical. It was the job of a/iy Government to see that they did pay. Mr. Smith said the tendency to destroy Imperial preference should be watched. He wondered what the United Kingdom Government thought about the matter, and if it remembered the help New Zealand farmers gave to Britain when New Zealand produce could have fetched greater prices on the world market than Britain had paid for foodstuffs. Mr. Smith asked if we did not allow our sentiment to go too far during the earlier negotiations for our produce, or were we not tough enough. Today the United Kingdom Government was not prepared to allow for our costs in production of foodstuffs we sent to Britain. He thought we should remind the Mother Country that negotiations between the United Kingdom Government and New Zealand could not be stopped, and started ad lib. We had to go the whole way together, or not at all. TO RATIFY HAV ANA CHARTER. Mr. Smith said the Torquay talks were mainly for the purpose of ratifying the Havana Charter. “If it is ratified, then it will be the stone end of Imperial preference," he said. Farmers and their leaders should make their voices heard on any indication of alteration in the basis of Imperial preference. "We should not bargain away Imperial preference for any nebulous tariff concessions wjiich y-ill be. valueless in times of economic blizzard,” he said. “People could rest assured that neither the Minister of External Affairs nor the Government would “put any fast ones across the country which would lead to any alteration in Imperial preference. The New Zealand Government believed in Imperial preference. Mr Smith did not speak for his full hour. Mr. Freer (Opp., North Auckland) said that in the last seven or eight months, the incidence of price increase had been greater than at any other period during the Labour Government's term. He said that the National Government’s policy in permitting the importation of goods from any sterling area was a most definite attack on Imperial preference. The abolition of subsidies had meant that everything consumed or used had increased in price, and costs were going higher and higher. Sales Tax exemptions listed in the Budget meant relief of only 10s a year to the 400,000 families in the country. He asked why more household articles, such as kitchen crockery, were not included in the Budget list. . The Minister of Labour (Mr. Sullivan): That will come. Mr. Freer said his attention had been drawn to a large chain store in Auckland which, after the Budget announcement, had increased its prices for pegs and bags of washing blut. Was the Government going to take action to prevent such action? Tje Budget said Mr. Freer "pandered to farmers." An allowance of 30 per cent, depreciation should be extended to other industries. Mr. Freer considered that a review of the whole system of price control and costs should be undertaken by the Government without delay. Mr. Freer also spoke for less than an hour. HOUSE OWNERSHIP. Mr. Hanan (Govt., Invercargill) said the Government's policy in regard to Slate houses gave tenants freedom to choose for themselves—a freedom which was the cornerstone of national Party policy. Home ownership was important to family life, and the Government believed in promoting home ownership. The Budget was a disappointment to the Opposition which found that it did not bear out any of their savage, unwarranted and inaccurate predictions of dire things the New Government would do. Mr. Hanan said that the increased prices for wool would result in an enormous build up of our overseas funds, and that money would eventually flow

back into Works projects and other - national undertakings. I The debate was interrupted by the S tea adjournment at 5.30 p.m. until 7.30 p.m. Mr Hanan (Govt., Invercargill), veil suming the debate in the evening, - dealt with age beneficiaries and the t reasons why the National Party had p not implemented a policy to pay an , extra 2s 6d a week i» certain cases. - (See report elsewhere in this issue.) 1 n HIGH WOOL PRICES d e Mr Mathison (Opp., Avon) said that s Mr Nash had been ridiculed for his statement on Tuesday night that high - wool prices might be harmful to New Zealand's economic life, but next day *, experts in Australia and the United e Kingdom had been reported as saying . that the phenomenally high prices e might indeed be injurious. Economic - repercussions in this country of high II wool prices were now the Governr| ment's responsibility. One possibility - j was that a wool price recession might . lead to a disastrous slump. If we fl were going to gear our economy to s wool prices and those prices fell sharply, the result would be economic y recession, in which all would suffer, n It was very possible, said Mr Mathiy son, that Russia and her satellites had inspired the present phenomenal rise ; in wool prices In the hope of a later collapse. There was nothing Russia f would like better than the economic ; collapse of Western countries. Mr Mathison said it must be recognised that high wool prices would encourage wool substitutes more quickly x than anything else. e Mr. Mathison said that high wool y prices would inspire greater expenp diture on research for good substic[ tutes, which might seriously affect the 0 prosperity of New Zealand and Ausy tralia. It was quite conceivable that g the price of suits would be £4O next ir year and even those who could afford £23 for a suit today would be un(l able to afford £4O next year. They n would look for substitutes.

Referring to criticisms of iMr Nash by Government speakers, Mr. Mathison said they would be better occupied looking after the country's economy than trying to discredit a man for whom everyone outside the Government Benches had the highest respect. There was a feeling of general disappointment at the Budget. People had been led to believe the change of Government would lead to easing the taxation burden. How could members of the Government square their consciences as to the disparity between what they promised and what they had done? The Budget was no more than a damp squib and people outside the Hopse were calling it far worse than that. Mr Mathison offered to tell Mr. Hayman (Govt., Oamaru) pri- . vately the terms being used to describe the Budget. NATIONAL INCOME. New Zealand’s national income today was greater than ever before, but the richer were being made richer and the poor had less than last year. Exemption from additional rates tax on unearned income was a concession to one section of the community and was blatant class distinction. The National Party in Opposition claimed to have new ideas for reducing taxation, but it had increased overall taxation from £73 to £7B a head. The Government had made a hand-out to its rich friends through the remission of extra tax on unearned income, but the workers were actually paying more this year than last through the direct taxes on their higher monetary Incomes, and through the higher cost of living. Mr Mathison asked how many would benefit from the abolition of the penal tax on unearned income, and what the total amount of the remission would be.

Other speakers in the debate tonight were Mr Shand (Govt., Marlborough) and Mr. Hackett (Opp., Grey Lynn). The House rose at 10.30 p.m. until 10.30 a.m. tomorrow.