Undistinguished Start To The Budget Debate

Press, Volume CVI, Issue 31092, 22 June 1966, Page 3

Undistinguished Start To The Budget Debate

(New Zealand Press Association) WELLINGTON, June 21. The Budget debate got away to an undistinguished begining in Parliament tonight. ,

The opening speakers, the Leader of the Opposition (Mr Kirk) and the Prime Minister (Mr Holyoake), reiterated old charges and for the most part covered old ground.

Mr Kirk’s speech was notable for one omission—comment on the controversy on the restricted use of overseas funds which the Budget has provided.

£659.5 million, Mr Kirk said: “The Government is telling everyone to cut expenditure but it is not doing it. It has borrowed at record levels, raised the price of rail fares, increased State house rents, pushed up the cost of electricity and is planning to do it again next year.” he said. “The Minister’s policy seems to have been to lay his hands on every penny he can get by taxes, credit from the Reserve Bank and borrowing overseas—and then spend the lot.” The Government had borrowed £ll3 million in the last five years and planned to borrow £3O million in the current year. The Government also had drawing rights on 60 million dollars in the World Bank. “Chief Grizzler”

Mr Kirk accused the Government of “being reluctant to face the balance-of-pay-ments position.”

financial organisations and “trying to steal their credit.” “In spite of a record level of income, New Zealand has a £59 million deficit Instead of the overseas reserves building up quickly, as they should, they have been recovering with agonising slowness. As the Monetary and Economic Council report said —the amount in our vital overseas exchange reserves is at a very dangerous level.” Invisible Payments Mr Kirk said in 1965 New Zealand earned £383 million for exports, but lost £73 million on invisible payments. This meant the country had enough income to import £3lO million worth of goods. Instead, it imported £358 million worth—a Toss of £4B million.

“New Zealand is in a very critical position,” he said. “In this Budget, as in all the others the Minister of Finance (Mr Lake) has brought down, there is a reluctance to face the balance-of-payments problem. “They prefer to act only when they are compelled to act,” he said. He accused Mr Lake of reading into the Budget the progress made by voluntary

“I read the Budget as carefully as I cbuld,” said the Prime Minister (Mr Holyoake). “I thought there was something in it.” Mr Kirk was making very heavy weather of his job. The Labour Party and the people of New Zealand had waited for Mr Kirk’s speech, and they must have been very disappointed. Mr Kirk, he suggested, was going to qualify as the “chief grizzler of New Zealand.” Mr Holyoake quoted the president of the First National Bank of New York, Mr George Moore, who said recently that New Zealand was a most dynamic democracy, a go-getting country, with integrity. “This is a responsible Budget and a courageous Budget in all the circumstances of the day,” said Mr Holyoake. “Not Election Budget”

In 1966 New Zealand would earn sufficient to pay for £322 million worth of imports. However, it was estimated the present Government's policies would permit £367 million worth of imports—a loss of £45 million. “What sort of Government is it that conducts the finances of the country in this way?” “In one breath the Government is saying the demand for imports is beyond the capacity to pay, but it has exempted many new items from control.”

As a consequence, in the nine months up to the end of March, licensed imports fell by £13,005,000 over the previous year. “But exempt items increased by £52,600,000.” The National Party promise in 1960 that it would remove import controls from raw materials and equipment not made in New Zealand had been broken. Taxation Review

In an election year people expected tax reductions, increased Government expenditure in their favour, something extra for everybody. “That’s not in this Budget.” It was not a time for playing politics, but rather a time for building New Zealand.

He described the taxation system as “this complex jungle of words which even the experts cannot understand." The Budget said a commission would be set up to review taxation.

The Budget gave a picture of a vital and developing country. Its problems were problems of growth, expansion, and prosperity. Mr Holyoake cited the number of houses and buildings constructed, the power schemes envisaged last year, the development of land, the progress and development on farms, the increased number of stock, the progress in education.

“We would have no confidence in any commission of inquiry Mr Lake might choose to set up,” he said. “We believe there should be an inquiry and that all interested persons should have their say in it” Mr Kirk said his party would permit a duty-free transfer of an estate from husband to widow and wife to widower provided they had been married for 10 years. Under the Budget, Mr Kirk said, a clerical worker earning £l6 7s 6d would benefit by lid a week and a workman on £l5 6s 8d would get 2Jd a week because he paid higher union fees. “Why didn’t the Minister of Finance consider giving the working man exemption for travel to work for people pushed out into rural areas to live?” Govt Spending Commenting on the Government’s proposed expenditure for the 1966-67 year of

“Why paint these gloomy pictures? Give us more of this.”

Mr Holyoake said New Zealand’s rate of progress was equal to that of Japan and West Germany—countries which had been held up as models. “What is the point of moaning and grizzling that New Zealand is in a mess when the people know it is not. We have never seen such strides before as we have seen in the last three years.” In 1964, industrial production increased 10.4 per cent over the previous year. The Government was investing money so the future would be assured. The Manapouri power scheme was typical. If Comalco took its option on manufacturing aluminium at Bluff using Manapouri power, New Zealand would have a vital new industry which would bring £25 million in overseas exchange. Investments “This Government has increased our overseas investments. What is the use of having overseas funds? It is better to have overseas investment.” The Government could realise its overseas investments tomorrow. “If we did, we would have £9O million in overseas reserves.” Overseas funds were low because of the large amount of stocks imported last year. “But we will have sufficient goods and machinery to continue at about the same rate of development as we have enjoyed for the last few years,” he said.