THE WINTON SPEECH.

Dominion, Volume 3, Issue 813, 10 May 1910, Page 5

THE WINTON SPEECH.

MR. MASSEY'S CRITICISM. REPLY BY THE PRIME MINISTER. FINANCE,- TAXATION, AND' ; ■ - DEFENCE. 1 <B» TelcEi'fcph.—Special Oorresrondent.l _ - . ( ": . . Dunedln, May 8. ' A. "Daily Times" reporter waited upon Sir Joseph Ward at Invercargill on Saturday, and brought under his notice Mr. Massey's criticism of the Winton speech. The Prime ' Minister said' I hare read Mr. Massey's remarks, and I am unable to understand how, even from a party leader's standpoint, the Leader of the Opposition found it necessary (while, of course, fully entitled to his own views) to attempt to make tho results uf the. financial year appear as unsatisfactory as possible. Ppoii what - earthly assumption the Leader of the Opposition can mix up the amount transferable from the ordinary revonue to .the Public Works Fund, in auy.one year, with the operations of tho; financial year just ended, is. one of .those unaccountable things that no man can answer. It really seems to me that party political bias is so strong that, in. this instance, it accounts for. the attempt to discount what i*, with.out doubt, a magnificent recovery due to the improved conditions in the country in the last financial year. ■ Public Works Expenditure. Everyone in the House and in the country knows that, in submitting my Budget to the House on November 10, 1009, provision for carrying on the public works expenditure was made without providing for any contribution whatever from the ordinary revenue, ana it will bo found, on page 6 of the Budget/that, that is tho case. In the Budget I showed the results, after making provision for the Supplementary Estimates, which left no margin whatever ror any Treasurer to rely upon - paying anything from the ordinary re-' venue to the Public Works Fund. So' that tho whole of tho operations for the year just ended, so far as our public expenditure was concerned, were provided for without depending upon any contribution from the ordinary, revenue for that purpose. Consequently tho mixing up of the assistance to public w.orks expenditure from revenue in previous years has' about as much' analogy to the true position as if it were suggested that a ■drought in Australia was responsible for the drying "P , of .. a river iii tho North 0 . Ono has nothing whatever to do with the other, and the. results of this financial year, so far as. the .position, of , our revenue is concerned, is not in aDy way affected by such an argument as that used by Mr.' Massey. Supposing, for tho sake of illustration, that the whole £432,000— the.balance at the end of .the last finan5 a L/ ea £r lla <I -been transferred, to the xjublic. Works Fund during that year, that transfer would not, in the slightest degree,' affect 'the fact'- that our revenne had improved during tho. year, and that the actual. surplus revenue, together with the balance at the bethe. year, amounted to ±»4di,000. : "Novel Idea." The attempt to minimise what, I ' '*? "K*eed ; a gratifying result of the year s operations, is extraordinary, but it has this credit: It is the first time, as far as'l am aware,- that the novel idea has been put forward- of attributing tHe-satisfactory result j of a ' year to two years' operations. 1 won- • der what a man in a' private business, or m private life, would say if he were , told" that',' having had a poor year on account of bad times, he had, at the beginning of the next year, a balance i of revenue -of £50, and that at the end of the second year, he had, owing to improved conditions, increased his balance_ by a further £600?. What would ' : his idea be if he were told that, in : showing his position as £650 at the end .of the year (inclusive of tho" £50 : with which ho commenced the year's i operations), he should attribute that ro- i BUt t° live years' operations because of the fact that, during the bad year, he had paid out portions of his re- ■ venue towards, say, the erection of a 1 building? As a matter of fact, the i previous year's operations (excepting. 111. respect to the balance with which he cpmmenced the year) would have . no more to do with the result than, j as he already said, would a drought ] in Australia bo responsible for the dry- i ing-up of a stream in New Zealand. 1 One wor4' further upon this matter, ' to show bow unfair this repeated prac- 1 tico is of trying to minimise the re- 1 suits of the financial year by the Oppo- ' Sition. ~ Tho Supplementary Estimates. Why, for instance, should they ignore the amount required to be set aside; for the_ Supplementary Estimates, it in their deduction; from the balance at the end of the year? It" is most unfair, and there is really i no point in criticising those who make i 6Uch strenuous efforts to reduce the ' excellent financial results of the ' fear. I, repeat that you may 1 go to any first-class accountant in the ! world, and I will challenge him to say J that tho year's results are not pro- ' perly and correctly stated. The novel , idea of deducting the amount, standing , at credit at tho beginning, of the finan- ; cial year, from tho total balance of I revenue at tho end of the year, has 1 very little to recommend it. 1 have not, 1 at any time, said that tho credit bal- ' ance standing at the beginning of a ! year was used during the financial ! year following. On tho face of it, it , would be stupid and absurd to make i such an assertion, but everyone who i knows anything about the financial ' operations of a country recognises that, ! at the beginning of every year, a por- ' tion of liabilities that cannot be in- ! eluded in the actual payments of the ' closing year must come forward into | the next year, and the credit balance standing at tho beginning of the year (with the ordinary revenue of the year i itself) is utilised .in tin, ordinary course ] for paying those,sums, whatever thev ■ may be. I

The Liabilities Held Back, _ There arc no liabilities held back as 16 sometimes suggested, but every person of any experienco knows that, even though a fortnight, is given (as is tho case in New Zealand) to enable all accounts to conic- in to : debit, there is still a 1 portion, that would not come iii for .a month, or for two or three months, or oven longer after the close of.-tho.. financial year.- Therefore, if this theory which is put forward of deducting the, credit balance at the beginning of the year were accepted as tho 'proper tiling- to do (which it is not), then whatever liabilities incurred in the previous year eanic along, and wero paid, would also, in the same novel way, require to be deducted from tho current financial year. , Of course such a thing in practice would bo ludicrous, and i his method of trying to minimise the financial year's results, in the way which the Leader of tho O/ipositkm is doing, is equally so. Taxation. So with Mr. Massoy's remarks regarding taxation. It is really very difficult to seriously discuss such statements as appear in the interview with tie hon. gentleman regarding taxation.

He argues,' from the Year Book, that the increase of taxation per head is £1 7s. Id. In his reply to my speech he actually brings in the taxation introduced last year to cover' international defence, and the Dreadnought contribution, and seriously asks' the people to lake his statement as a reply to my criticism *ot his altogether erroneous views upon tho question of taxation as delivered on the West Coast. Now, practically, the whole of the proposals of last year commence to operate froni January 1 of this year, which is only three months of tho financial year, but, apart altogether from that, there aro no portions of the taxation put on the -Statute Book last year which are included in the Year Book results, and the £1 7s. Id. per head, to which Mr. Massey was referring on the West Coast, and his introduction of it now by way of reply, is consequently, not apposite, and has no bearing upon the matter., Take, for instance, tho £50,000 imposed by surtax in tho Customs. Anyone, who refers to the Financial Statement-, will see that it is proposed that this should cease to exist on March 31, 1911, and, I said, when making the statement, that 1 expected thai tho revival of trade would enable this to be done, and that has pioved to bo correct. Craduated Land Tax. Mr. Massey contradicts me when I say that he and bis party found it necessary not to vote against the proposal for an increase in the graduated land tax by 25 per cent. I have not as, apparently, he states, made any statement that it was 16 per cent. If anyone will turn to the debate upon the Land and Income Assessment Bill' as reported in Hansard of 1907 (volume" 141, page 324) he will find that a division was called for on the Bill, and Mr. Massey and all of his party in the I House at the time voted for the third reading of the Bill. So far as my recollection is concerned, there was no division on the second reading, but I was right in stating that, so far as this increase of taxation' is concerned, Mr. Massey and his party had thought proper not to-vote against it, and, upon, tho third reading, it will be found that, on a division, they supported the Bill. Concerning Mr. Massey's personal opinions of the policy of the Government regarding Native lands and water-power I have no comment to make. He takes a different view from thatof the Government on those matters, and ho -is, of course, fully entitled to his views. On the subject of defence he puts himself in opposition to. the recommendations made by Lord Kitchener, who is, admittedly, one of the _ greatest and most practical soldiers of the age, and I am person-very-sorry that that is so. I have avoided, in every way, the introduction of the least element of politics into defence questions, and, in recent matters in the north, -1' restrained myself advisedly, so as to keep the course of our defence matters clear and open for parties of all shades of opinion to help to settle a matter of such vast consequence to the pres'ent and future of the Dominion. I feel that, even where anything unfair is said or done against the Administration, it is better to calmly consider matters on the . floor of the House/than to make defence questions a football for political animosities,'or for political agitations in any part of the Dominion. ■