FINANCIAL DEBATE.

Dominion, Volume 6, Issue 1828, 14 August 1913, Page 6

FINANCIAL DEBATE.

MR. MACDONALD OPENS. A SERIES QF COMPLAINTS. Tho Financial Debate was opened by Mr. IV. D. .S. Mac Donald at 7.30 p.m., after the Prime Minister had movcil the usual motion, "That Mr. Speaker do now leave tho chair." Mr. W. D. S. . MACDONALD (Hay of Plenty) said it was rather a difficult matter to discuss the Budget, because it was so absolutely contradictory to tho promises of the Government party in I hp past. They had shown themselves in their liu!%ct to be absolutely devoid of originality; and hod brought forward practically nothing more than a list of estimates from tluo Dopartments. Ono of the cries of t'lio party now in power had been that the lato Government had been wasteful in the expenditure of money on vote-catching. But now that they wore ■ in nowor the Reformers had found that there were other things 011 which to spond money besides 'vote-catching; Tho Budget, instead of-being progressive, had gone' a step backward everywhere. The Government had spoilt less money on reads-and bridge*, less in railway construction, and less in advances io settlers. j?or had the Government redeemed their pledge that they would reduce borrowing, for tlioy retained power in (heir new proposals to borrow this year as.much money as any of their predecessors had previously in 0110 year. He declared that tho object of the Minister for Finance in drawing up his Budget had not been lo enlighten tho country, not to enlighten tho House, but to juggle with figures in order to discredit the Into Government. Ho thought the Finance _ Minister had been ill-advised in putting the word "deficit" into his Budget, especially as it was not justified. Jt was merely the result) of tho Minister's jnacli"!? wii'i figures to suit his own ends. Tn actual fact tliero was not a deficit on March 31, i 1312, of ,£879,896, as tho Minister had

said, but a crodit b'alaneo of J!782,54G. Tlio Minister for Public Works was in much the same position. Mr. Fraser, when lie came into oilice, had authorities for .£012,072 but he hail 'actually spoilt only or .K)7,n;l les? than the authorities issued before lie eame into oilice. Oil railways, too, the Minister tor Public Works hud spent less than ho was authorised to spend. No Improvement. It was difficult to discuss the Budget, bocause so many returns that should have been supplied to the House were held back. Mr. Allen: Winch arc held back? Mr. Macdonald: Oh, I don't know, but there are a good many. Continuing, ho said he could not see any improvement in the position of the State Advances Department. Last year the Government had advanced under this head only J21,9i13,090, whereas the late Government had in the previous year advanced upwards of three million pounds. Mr. Allen: That was election year, wasn't it?

Mr. Macdonald said that in spito of their reproach of extravagant vote-catch-ins expenditure against the late Government, the present Government had not proposed to borrow any le--s money than their predecessors, who, they said, had been so wasteful. The Government had declared that Sir James Carroll was carrying out a ."tnihcn" policy in regard to tho settlement of Native lands, but in tho first year of office of the present Native Minister tho pace of settlement of Native lands had been even slower. In the year 1911-12 there were 010,000 acres of Native land alienated by -sale or lease, hut in the year 1912-1.1 there were only 452,000 acres. In the settlement of Crown lands, too, in spite of the efforts of the Prime Minister, the pace-had not been materially accelerated, and the Minister had made tho mistake of opening for selection lingo blocks without giving to tho settlers any proper access. The result was that the land had not been keenly competed for, and much of it had not been taken up. Ho believed that it was owing to the anxiety of'the Prime Minister to push on the settlement under his Department, and the absorption bv him of the bulk of the survey staff to do so, that the Native Minister 1 was unable to go ahead with the surveys of Native land for settlement. The Government had, in short, disgusted their own supporters uy their failwre to settk> Crown and Native land. Condemnation all Round. Nc<r had the Government beet any more snccess'ful in their other cnanges. The Public Sorvico Commissioners, tor instance, were to cost tno country Sabout •£IO,OOO a year, and t'lio only thing they liad done was to stir up discontent in the Service from end to end of tho country. It was said that tho late Government had stuffed tliu Public Service wit'h undesirables, but now tiie Commissioners, w'iio had been investigating this, had found that most of the oifices were under-staffed. It hail been said, 100, that the railways woiie mismanaged by tho late Administration, but in actual tact they returned tho very fair rate of profit of i par cent., and paid the men the very high average rate of wages of 525. par weiok. _ Ile did not believe it was nceessary to import a manager from England to show how our irailirays should be run. This year there was just as much discontent as ever with the railway administration, but it was satisfactory to note, that they had paid a rate of interest that was next to the highest on record. The Budget, he said, had no'proposals for the benefit of the small man. It had been said of tiie late Government that they legislated for only ono dlass in the community but it was not true tint '13 millions of borrowed money expended ill the oauin'ory in tho last 21 years had benefited only the working It had benefited the whole community, and the palpable fact was that ill the last 21 years tho country had gone ahead by leaps and bounds. 'Ilie Minister lwd had to admit that of our debt 55 millions was interest-bearing. He hoped that when Mr. Allen came to hand over his office to another he would ba able- to show such a fine record os the previous Government, and to leave tho finances of the country in the same good condition they were in when he took office. It was owing to the sound, prosporous condition the countrj- was in when the Government took office that wo

wero in such a proud, secure financial position to-day. While the Minister had tried to' show an improvement in certain of the accounts, he had not shown how much ho had increased the debt of the country in his year of office, and that was the crucial test in this case. Matters of Moment. Matters of great moment had not been considered in the framing of the Budget. For instance justice had not been done to tho teachers of the Dominion. "Of course," lie said, "when we say anything about raising the salaries of senool teachers We are met with the cry: 'Why don't you do it yourself ?'" Government members: Quito right, too.

Mr. Macdonald said tlie Government's action in regard to tho teachers'" superannuation funds did not commend itself specially to him. And the proposal to grant an increase'to tho teachers of from ATi to .£lO in salary was being scoffed at by the teachers, who had by no means received the consideration they deserved. Native Land Court Judges, too, ought to receive better salaries, having regard to the importance of tho work they did. "They have been kept down lor years and years," he said. Government members: Hear, hear. Mr. Macdonald persisted that men handling such important matters as Native Land Court Judges did should receive much better salaries 1 than they wero now paid. A MINISTERIAL REPLY. ME. ERASER ON FALSE PROPHETS. The Hon. W. FRASER (Minister for Public Works) complimented Mr. Macdonald upon making tho most moderate speech that he had delivered since leaving office. Evidently he hud found the task of finding fault with the Budget a very heavy one. It was plain that he had found very little to complain about. Mr. Maodonatu had said that the members of the Government when in Opposition had opposed borrowing. They had not opposed borrowing. What they had objected to was the way in which tho money was borrowed and very often .tho way in which it was spent. Any accountant or any person trained to figures could come to no other conclusion than that no Budget had ever been placed before the Houso which was clearer or nearly as clear. (Opposition dissent.) Hon. gentlemen opposite did not understand the Budget. Mr. Fraser said that ho did not intend to make a Public Works speech, hut ono or two things had been said which he wished to reler to. Mr. Macdonald had accused h,im of going about the country saying that ho liiwl no money for roads and bridges and railways. He had never made such a statement and defied anybody to prove that he'had. What he had said was that until 'lie had some certitude that tho loan that Parliament had authorised was going to be floated on the London market he was not going to anticipate that loan being floated. He had never doubted that the loan would be floated eventually, but ho had declined to do what his predecessors had done and spend money in anticipation of the loan being lloated and very possibly injure the credit of the Dominion in So doing. At the time when the loan was raised they were hovering on the brink of a European war, and had the war broken out it would have been impossible to raise the loan. Had money been spent in anticipation, and such a calamity had supervened, those responsible would have deserved all the opprobrium which would liavo descended upon them. The moment that the loan was floated, he proceeded to carry out vigor-o-usly the works that Parliament had authorised. That was a very different tiling to what the hon. gentleman had talked about. Tho moment ho was sure

lie liatl proceeded vigorously with tho work. It hail lo lx> remembered that when ho lmd addressed audiences he had usually done so in response to requests for new expenditure. Those lie had declined to have anything to do with because the three million loan did not provide a penny for nciv works. Monetary Difficulties. The four and a half million loan raised by the Mackenzie Government, Mr. Eraser continued, would have to be repaid ill July next. The debenture-holders, lie continued) would not renew. They wanted their money back. Mr. Myers: Are you meeting any difficulties about it? Mr. l'raser counselled the lion, gentleman to possess his soul in patience. The money falling due 111 July would have to . ba raised at least four months previously,

and in fact the first business that tho Dominion had to do was to raise money to repay the lour and a half millions before, raising any money lor new works. The Dominion was not out of its difficulties yet. This was not tho whole of the liability. Close upon nine millions would be required in the immediate future to pay oil' loans falling due. Tho operation would not add a shilling to the public debt, but the money was required to repay those w;ho had lent the Dominion money years ago. Between now and December 01 the country would liave to raise on (he London market about twelve millions of money. Was this a light task for the Government?

Mr. Myers: ion can always get money for Kinew-ala.

Mr. Eraser: You can't always get money unless you pay an exorbitant, rate for if. lie was one of thoso who hod jutt denounced short-dated debentures in the House. Who now supported this form of borrowing? Gambling in Futures. liaising sfhort-dated debentures amounted, to gambling in luturcs, and tile gamble always wont against the Dominion. T'ne money had cost more every time than if it hail teen raised in long-aaied leans. Mr. BuiMo: \Y ho knows that money will bo clul.ip;-r thirty or lorty years litnee : Mr. iraser: 'I'nifty or lorty years hence tile Dominion will hb in a much better position to renew loans. Development works will have advanced ami tile country will carry tluua times its present population. Mr. Buddo: That will not aifeet the rate of i n tur.est.

Mr. Eraser: Tho hon. gentleman doesn't know what ho is talking about! Does ho .suppose that this people in London don't know tha position of this country as wdl, ayo better, than most of tho members of tnis House?

Mr. Dalian: Then why send a man Home ?

'.Mir. Fraser: Did the other side never said a man Homo? The hon. gentleman

knows perfectly well .that the right tiling was done. Tho people of the Dominion know it, and approve heartily of the fa'ct that the Minister for Finance was salt Home to put matters right. False Prophets The member fen- the Bay of Plenty, like the prophets of old, had gone out to curse Ilia enemies, and ended by biasing them. Ho had rant Unit the country was prosperous. When tho members of tho Government were in Opposition tho numbers opposite had -promoted that if evctr they came into power there would ba soup kitchens <uid that ruin would stalic

through the land. Now the lion, gentlo mail told them that the country was in a splendidly prosperous condition. After ail, why should, not tho lion, gentlemen opposite occasionally indulge in tlie truth? (i/augfhter.) The hon. gentleman had complained, on the one hand, that tho Government was borrowing too much, and, on the other hand, that it was not spending enough. Where was t'ne money to coino from Mr. M'Cal'lum: Tax! Mr. Fraser said that it was wonderful what lion, gentlemen would propose to do when they were sitting "over there." lie went on to talk about the Public Works expenditure during the past ytar. The amount voted for (roads and bridges last year was i;oSO,flOO. That limit stood up to March 31. The amount of commitments on tlno Estimates came to a good deal over A'SOO.OOO. That was a Hcabite compared to what it was in thla previous year. It was inevitable that there should always Ik on the Estimates commitments to a larger amount than tho amount voted, because the work had to go on until the following year's Estimates wero approved by Parliament, and tho Loan Bill had been passed. Jlir. Macdonald: That's the commit-lnen-tM. Mr. Fraser: I am not talking about commitments at all. You must have -authority to go on. The lion, gentleman knows that if any particular work wero not to be found on tho Estimates tiie Audit Ofiico would very soon tell vou about it. I told the House last year tint the money authorised and tho amount wnich I had placed on the Estimates I expected would carry me on to about the middle of October. What he had said then would be borne out by tho facts. Up to March-31, ,£333,000 hail been spent .and ,£285,000 had been placed in the hands of the engineers .or local authorities. He had not authorised, prior to March 31 and immediately after it, every item that was upon thy Estimates, as his predecessor- had done. There wero items of so much on account, totalling Mine .£200,000. Most of these amounts were authorised before he came into office. Ho had not cancelled these authorities, not. thinking t.hat the occasion warranted it. It would have been somewhat of a slur on the Dominion, but he had been compelled to watch carefully and

not issue any more authorities until he had money to pay over the whole of the authorities. That would explain tho commitments. The Olira Tunnel. Mr. Macdonald : What about the Otira tunnel commitments? Mr. Eraser: When the hon. gentleman left office there was a contract in progress and that had to be shown as a liability. .That contract was cancelled after we came into office—it was not done at our wish—and therefore the liability of ,£300,000 had to be taken off because the contract ceased to exist. At present the work is being carried on by tho Dominion. If another contract is let, as may happen before long, the remaining amount, whatever it may be, will have to go on again as a liability. Jlr. Macdonald: What I stated was that the .£320,000 commitment in connection w'ith the Otira tunnel could by no possibility become a charge in the year 1912-13.

Mr. Fraser: What is the hon. gentleman referring to? Does he mean to say that we set that down as a liability? Mr. Macdonald: You kept it there. Sir. Fraser: Pardon me, we did not! It was a liability for two years in tho timo of the previous Government when tho contract was in force. When we came into power, as soon as that contract was terminated, it ceased to bo a liability. Mr. Macdonald: That is quite cWrect. • Mr. Fraser said he considered that members on his side of the House had been very patient in debates, not on account of the arguments, but of tho mud thrown at them. Cries of dissent from the Opposition benches. Mr. Fraser: Look at Hansard. It is full of it. The Man on the Land. He said tlmt lie believed we were at present five years ahead of our abilitv to rood all the land that had been settled, lie was not saying this as a reason for stopping the putting of people on the land, but the question had come into his mind as to whether it was fair to charge a man full rent for land to which he had no access. Mr. Wilson: No. Mr. Fraser: I don't think it is. I think some concession should bo made to him in consideration of the difficulty lie has in getting access to his land. He believed some sort of relief should b? given to tho people in this position by allowing them to subject their land to a special rate for -roading, and to allow a concession off the rental to the amount of tho rate. What tho Government wanted to do was to put. as many people on the land as they could, and to make tho position of those people as comfortable as they could —to give .them facilities for getting their goods in to their lands and their produce out. Good Advice. The more the people of tho Dominion studied the Budget the more they would be pleased with it. Men, not of the "capitalistic" class, of whom tho other sido wore so fond of sneaking, had written to hiin expressing cordial approval of it. Tho Opposition would never turn tho Government out by leaving argument alone and trusting to abuse. It was said that tlie Government would only stay for a few weeks when they got into power.

Mr. Brown: That was more by good lt.ek than by good management. Mr. Fraser: Tho best luck that ever befell this party was that we did not cotno into office after the election. 110

concluded, after haying spoken forty minutes, by commending Mr. Mac Donald I for having addressed himself seriously to . the Budget, and criticised it forcibly from his point of view. MR BUDDO ON FINANCE. ■ I Ti<tfi "VACANCY IN THE OFFICE." Tlio Han. J). BIiDDO (Kaiapoi) began by excusing tlio late Government for having borrowed on short-dated debentures when tlio price of money was high. He thought, it would have been folly to have gone on the market for a long-dated loan when the interest rate ruling was a high one. He was not at all alarmed by the statement tlat we

were five years ahead of our ability to road the back-blocks settlements. 'Pliis seemed to liim to indicate that the iatu Government Jiatl done something to put men on tho land, and ho was glad the Minister tor Public Works had admitted that tliis was so. Tho Budget, ho said, was one of tho.su documents which was minuto in detail, but quito devoid of anything constructive, lie had nought in vain for possibilities of this sort, having lountl only tho single promise l)y the Government that they proputt'd to give pecuniary advances to for the building of cool stores aJul the like. He was glad to find that one little bit of new policy. He iound iault with the Minister's changes in his methods of setting out some of the accounts. If the accounts of a public conii>any were to bo presented in the same way thero would assuredly be n vacancy in the office. Sir. Allen: Tho vacancy occurred in July, 1912.

iLr. Buddo declared that by his arrangement of the Budget the Minister had to some extent concealed from the country tho fact that the Public Service Commissioners were costing the country so much as .tOSCO a. year. The Government had given very little assistance to tile State Advances l'und during the year. lie ventured to suggest that it was owing to this that there had been such a stringency ill the money market here. If even so little as half a million had beeji added to the fund last year ho believed the rate of interest woidd have been materially reduced. Ho was glnd to bo able to congratulate the Government on having increased the rate of interest to depositors in the Post Office Savings Bank, and lie hoped tho Government would in future always givo tho Post Otlico Savings Bank depositors the benefit of any increases in the niliiig rate of interest. He was sorry the Government had been so tardy in bringing down their proposals for local government reform. The present state of uncertainty as to the future was very unsatisfactory to the local bodies, and the sooner the Government faced the position the better. Jlo did not approve of the importation of a railway manager to take charge of our railways. He ventured to suggest that we could quite well train our own manager. He congratulated the Minister on the very good return from tho railways of ,£4 os. 9d. per cent. But ho held that some of this percentage might be given away by concessions to fanners in freight charges and tp parents of families, in the way of reduced fares to children. Ho 'was strongly opposed, he said, to tho establishment of another agricultural college. Ho did not believo very strongly in agricultural colleges, but he did believe in experimental plots. GENERAL APPROVAL. THE GOVERNMENT'S LEGACIES. Mr. W. NOSWOR.TIIY (Ashburton) said it was quite clear from tho criticism to which the Budget had just been subjected that thero was nothing very much wrong with it. If thero had been, all the members of tho Committee of Public Safety wouild have be®n in their places in tho House, but they were not. Budgets of past years had been presented to the House oil a sugar-ooated pill, but the present Minister had submitted in his two Budgets a clear statement of plain,, hard facts. Combating tho argument of Mr. Buddo that it was wise to take up shortdated Icons when interest was high, ho said thero was not tho slightest indication that money was likely to be much easier than it was to-day. It would have been" much safer policy for the late Government to have taken up long-dated loans, rather than "leave so much loose paper around." Tho Budget had, he said, shown how entirely wrong were the calumnies of, tho late Government party, to the effect that so soon as the present Government got into power they would set about to destroy the Lib&ral measures on the Statuto Book. Ho was glad to notice that tho Government, following their increase in tlw graduated land tax, we,re walling to amend the income tax graduation to maks the incidence of taxation equitable. Ho dcclarcd that tho 'late Government had' in the years preceding this general elections literally bought tho country with borrowed money. This was ojio of tlsS legacies tho late Government had left to the Reform Government—l'lris and such extravagant vandalism as was to bo seen outside of Parliament iiuildings. Qllr. Noswo'rthv said that the members of t'lie Government party had boon bitterly and falstliy accused by the newspapers supporting the party on the other side. Tho members of tho Government party were supposed to represent tho large landholders and to favour the money-lenders, but not a fow men on the Government side had found it necessary to renew loans that year with high rates of interest ruling. lie did not mind saying candidly that this 'had been his own experience. Ho had found it necessary to renew a loan and had been glad to do it. Tho facts of the case woro all against the argument of tho Liberal party that the Government was in league with tho money-lenders. Sir Joseph Ward had said during the short session in February, 1912, that ho did not envy his opponents the task of financing this country. Tho remark was reasonable in viow of the fact that the lato Administration had left every stumbling-block that it could in the way of the incoming Government. Tho Reform Government was doing a great deal, of cleaning up. When it left office it would not leave a heritage of debt—a muddled tangle, a position in which a man hardly know how

to make one figure fit with another.

The debate was adjourned on the motion of Mr. R. M'Calhun (Wairau) until 2.39 p.m. to-day. PREMIUM BONDS AGAIN. STILL UNPOPULAR. Mr. W. A. VEITCH (Wanganui) moved that the evidence taken betoro tlio committee which considered the Premium Bonds Validation Bill should be printed. Mr. J. PAYNE (Gi-ey Lynn) urged that tho motion should not bo tolerated.

Mr. J. A. YOUNG (Waikato) said that it seemed to him that the motion which

had been sprung upon tho House was simply playing fast and loose with. it. Mr. G. J. ANDERSON (Matauraj objected to the motion on the. ground that its adoption would involve an extravagant expenditure of money. The best thing that could happen was that it should bo quietly buried. Mr. A. HARRIS (Waitem.ita), tlio member in charge of the Bill, sai<l it. was remarkable that tlio motion to have the evidence printed ,'ihouid be objected to. The Bill was to be recommitted on September .'), and if the members of the House wero to know anything about tho Bill t'hey would need to have the evidence before them. It was surely right that the evidence should be made available.

• Mr. Payne; You ought to be ashamed of yourseJf.

'I'he Prime Minister directed the attention of the Speaker to the interjection, and Mr. Payne was ordered to withdraw

■Mr. Payne; Under tho rules of the House, Mr. Speaker, I must withdraw it. Mr. Speaker; You must withdraw unconditionally. Mr. Payne: Unconditionally. Mr. W. H. D. BELL (Wellington Suburbs) said he would like to be informed of the special reason for having the evidence talosn before the committee printed. It was not the usual custom to print evidence' taken by committees on Bills. Mr. W. A. \'EITCH (Wangauui) said ha 'had 110 feeling in the matter, but he thought it would be fair to allow tho member in charge of tho BiM to bring all the facts about premium bonds before tho House by circulating the evidence. The motion was defeated on the voices, and thero was a very decided preponderance of "noes." The Houie rose at 11.3 a p.m.