CRUSHING DEFEAT

Waikato Times, Volume 127, Issue 21157, 5 July 1940, Page 10

CRUSHING DEFEAT

BUDGET AMENDMENT MR LEE’S VIEWS XOX FAVOURED PROPOSAL BY MR HOLLAND WAR INSURANCE ON ASSETS (By Telegraph.—Special to Times) WELLINGTON, Thursday In the first division of the session of the House of Representatives an amendment moved by Mr J. A. Lee (Democratic Labour—Grey Lynn) in the Financial Debate last night was overwhelmingly defeated this afternoon. The amendment, which was to the effect that the Budget proposals were not acceptable because they did not provide for greater use of public credit, was supported only by the mover and his seconder, Mr H. Atmore (Independent—Nelson). Opposition and Government members went together to the Noes lobby, using the occasion for humorous exchanges. The contribution to the debate by Mr C. A. Wilkinson (Independent— Egmont) was the suggestion that the Government should hypothecate New Zealand-owned overseas securities instead of selling them, and should return the stock after the war. First Speech As Minister The Minister of Marine, the Hon. D. G. McMillan, made his first speech in the House since his recent appointment to the Cabinet. Two other speakers were Mr J. G. Barclay (Government —Marsden) and Mr S. G. Holland (Opposition—Christchurch North). The latter, who advocated a system of insurance as an alternative method of raising war finance, was followed by the Minister of Lands, the Hon. F. Langstone. The last speaker was the Hon. J. Q. Cobbe (Opposition— Manawatu), and the House adjourned at 10.30 o’clock until 10.30 tomorrow morning. Willingness of Farmers The Government was doing everything possible to assist and encourage the primary producer, said the Minister of Lands, the Hon. F. Langstone. There was no section of the community willing to assist more than the farmer. Better production would come from better feeding. of stock, and the Minister emphasised the value of scientific research in this connection. “There is a ramp on to use the war to get rid of the 40-hour week for the sake of abolishing it. “Social ownership or control can increase very greasy the quantity of goods produced. It is being done in England today, where the first thing done on the outbreak of war was to take control of industry, because that -vas more efficient. War Insurance A war insurance of Id in the pound on assets was suggested as an alternative method of war finance for internal war costs by Mr S. G. Holland (Opposition Christchurch North). The Keynes saving plan was first recommended by Mr Holland as being worthy of consideration. He said it deferred purchasing power. The rate of borrowing was too great for the first year of the war, said Mr Holland. Nearly £19,000,000 was to be borrowed internally and £20,000,000 overseas. As an alternative he suggested a new system as a war emergency only. “Assuming that a war insurance premium of Id in the pound on equities in property would suffice,” he said, “surely it is worth spending Id to protect the remaining 239 in the pound.” Mr Barclay: How much would Id in the pound bring in? Mr Holland: In the vicinitiy of £4,000,000. It could be applied to only a proportion of our internal costs, but it would enable the Government to remove the burden from those unable to bear it. Everyone would pay according to the amount he had protected. Mr J. G. Barclay (Government— Marsden) said fortunes had been made in the last war, but people who thought that economic reactions to the present struggle would be the same as they were 25 years ago, were

just as mistaken as those who considered that 25-year-old military strategy would succeed. Judicious Spending The Hon. J. G. Cobbe (Opposition —Manawatu) expressed the opinion that the estimated expenditure on public works could be reduced by £10,000,000 without causing serious loss or inconvenience. He said that even if this reduction were made the amount still remaining would be equal to the expenditure in 1935-36. which was a particularly prosperous year. This was not a time for spending money on works that were not absolutely necessary. Mr Lee on Borrowing Mr J. A. Lee (Democratic Labour —Grey Lynn) in concluding his speech, offered criticism of the proposed borrowing overseas of £20,000,000 toward the cost of the war. “Borrowing that money in Britain to buy British output does not add anything to the sum total of the Empire’s war effort,” Mr Lee said. “We can give what we have to give in men and materials, but if we borrow from £20.000,000 to £30,000,000 a year and build up external debts of £300,000,-

000 or £400,000,000 that is not helping the war effort but is placing New Zealand in an intolerable bondage in the future. We ought to say to Britain, and there is nothing unpatriotic about it, that it is time for the pooling of our war resources.” Mr Wilkinson’s Plan Mr C. A. Wilkinson (Independent— Egmont) offered the suggestion that instead of compelling the sale of overseas securities the Government should take them by way of hypothecation and return them to the owners at the end of the war. “Quite a large number of overseas securities held by New Zealanders were bought a lifetime ago,” said Mr Wilkinson. “They should be in an entirely different category from those bought in the last five years. These shares are in many cases the backbone of business undertakings in this country in that they provide the security for overdrafts. The greatest discretion should be exercised by the Minister of Finance in dealing with these matters.” Before dealing drastically with other people’s money the Government should take stock of its own in the Reserve Bank, where there was nearly £3,000,000 in gold. “We should send to the United States to purchase our requirements two men in whom the Government and the country have confidence,” said Mr Wilkinson. “There is not enough defence material in this country and gold is the only stuff that will buy it. Rather than have the gold in the bank, where an invader could lay hands on it I would turn it into bullets and machine-guns and give the invader them instead.”