THE BUDGET DEBATE

Dominion, Volume 8, Issue 2558, 4 September 1915, Page 7

THE BUDGET DEBATE

AN EXPORT TAX - ONE PER CENT. TO PRODUCE' ,£270,000. . . v ' slr.- J.-B.- HINE-; (StratfQrd) ; } - ; sumed the; Budget; debate;;, 'Hi*i'<said that .-. . aiiy refereiice to'tha-figures of'.last year could only bo directed ;to the'Vßeform Government. It- seemed strange that : rigideconomy had not been practised in . ; ; many' Departments in view, of the war. It was a. difficult thing to brine down retrenchment proposals; '- but tile. Natiqnal Government would havo had no- , tljing to fear in doing so.' .Rigid econr • omy could be carried out,. especially, in: , ..what could be called pleasure depairt- , mentspsiich as. Touristsi sure . the country would 'applaud curtailment: ■ of expenditure in this Department.' He commented on the falling-off in revenue, " -and i the deficit .likely; toXbe! fafced.'.'The ' need for increased taxation could not be denied. ;.;Some explanation was necessary o'f. the increased expenditure in the . Postal and Justice Department' adminis- > tration for, the: first quarter, .this tyear, ■ as against (he same period of last-year. 'Annual increments could well vbe 'done away with, for all money;.was needed •for necessary, works. The same thing ap- . plied to the Public Works.- Many of,'tho estimates could bo,, done' away: with, ■ especially with regard to buildings. 1 Dealing with redemptions, he hoped the Finance Minister would .not have diffi- ■ oulty in securing renewal of : .the loans :: falling-due. There should, bo no diffi- • ciilty.,with; regard to ( the London, loans,' but threo. qnd a half'millions were falling. duomNow Zealand, and no reference was made to tho renewal of these. In holding up t unnecessary expenditure,. ' he instanced that'the Otira Gorge Tunnel could well be held up now. Co-opera-tjve works .could; bo. suspended at. this time; especially ; • during ' the summer months, whfen plenty of work would be offering the, men in the country^;,'.The State Advances Office wanted.', propping . tip—more money ,was needed for the'advancement of the Dominion,' The great bulk of the money lent, lie held, had • gone into tho hands of the - suburban. : landholders, and not into ithe hands of | the: backblocks • -settlers. At' least £800,000, in his opinion; of the £1,136,000 advanced,'liad gono to the suburban : . dwdler. . He;-. thought ' fuller.'.details should be given l of the war expenses in ! this country—the statement in tho Bud- ■ 'get was'very bare: of detail.. Hesug-' 1 Rested that a Standing Committee of tho: j House should; look into that expenditure. ' As to the cost of living problem, he ; did not agree that prices could he fixed, v but .there were other ways of.assisting > | tho people. • The more wo could get for i our. products, the more '-tho working •. i people would get. j., The farmers were 1 . liberal' and generous if they got good ; prices. Taxation was tho pivot on which the House was revolving, and to a oer- • tain extent tho Government had done thoir best in placiug the taxes on the shoulders of those r best able to bear them. The only true basis of taxation - nas on the man's ivealth or income,' : and he, urged! a revision of; tho ...whole'' . system of-tasatidn in. this country. A - register could be made up of the wealth of the people. He' was also strongly t in favour of a. tax' on : exports; if, as' ' somo said., that principle was bad, then the system, of prohibiting export was a ■ greater wrong. _ .Ho' ijaid ! that the.: producers were quite willing to tea/ their ; share of the burden by an export tax, and then they .could do awa.v with many of. the pettifogging taxes in the Bud- ; .get, snoh ap.that,.on-kerosene;.; An ex- - port tax of one per cent would bring.in £270,000. i He had talked the matter < v uver.with the, producers in his'district, find th6y w6re quite willing.to pay ..that tax. The mineral oil tax was going to hit the farmers, for many of them had seiit_ their sons' to'.the war; and put in 1 milking machines to make up the labour. He also objected to the bureau charges for country telephones, -.' and, said that the beer and spirit tax was the greatest'.disappointment.- in the Budget. He was afraid that the Finance: Minister would find that he had a," greater deficit, than' ho anticipated at tho end of the:, year. It was childish to suggest that such a slight export _ tax as ho proposed would lessen production ; it. would spur the producers on to' greater efforts. - Referring to tho .National Cabinet, lie said that the elective execumight very well follow on' in its . trail. - . Manufacture of Munitions. Mr. W. A. VEITCH (Wanganui) regretted tnat the debate they:had .. not Jiad a Ministerial statement. With a National Cabinet; the Minister could well take the House' into their confiv ' dence.; Ho did not-'favour' Depart- . mental retrenchment by-cutting into tho ; service conditions of the staff, or reducing salaries'. He looked upon tho ap- : pomtment of a;.Minister-'of Munitions as the most important act'of the National Ministry,-but it was quite possible for that Minister ' to BRend a

great, deal of mousy without effecting anything. ..The Allies needed muni-' tions now more than men, and Neiv Zealand should <lo ;her , utmost to 'produce munitions as well'as men. Especially, wo'might assist in. tho manufacture of mpoliuio guns, aud ho did not think it was at all likely that we should get ■ thorn froin Japan; or at all fail-that wo should ask for them from Japan or any other country which was supplying tho Allies. ■ "Wo had in New Zealand mountains of raw material. If we could not get machinery, we could.make it. , Ho would rather see the Minister set about making munitions r than arranging for small engineering, firms to do it. , He believed the Government should set aside one of the railway workshops for tho. manufacture'of munitions'and machine guns: He feared tliat the farmers would havo difficulty in getting men for.; harvesting operations, ,' and !he . thought the'need could bo met by yolun- ' teer workers from the citi&s, especially those - men- who had;'private 'incomes, and who would bo the' beifer for a little hard work • iiy the 'fields.''He; strongly believed • that'.we .should have a register not only of the- men of, tho country,'. but of tlio wealth of theVcommumty. He advocated placing the whole of the extra £2,000,000 taxation on land and incomes ; on. the. big landholder. aud the wealthy man by a graduated' tax. He approved strongly of /the fornjation of a, National Government. ' Taxation, on Farmers. , Mr; G. V. PEARCE'(Patea) said that he had Keen blamed for setting l country against town. But when ho spoke in defence:'of the country settlers he did so in the interests of the .whole of "the country, because he believed that if we penalised the country settlers we should do the'; greatest possible,: harm to. the Dominion: by aggravating the'present ovil migration 1 to tho' towns. if we could increase our rural population ,w« would be doing' tho 'best possible thing for',tlie Ipountvy as :a'whole. ,v He had ■been accused of raising objection to tho farmer, and especially the rich farmer, being taxed. , Nothing of the sort. He believed that" 'the farmer and tho rich man should be taxed, oven mora heavily ■ taxed, but; he objected to the .proposod methods of imposing the tax. There seemed to bo- a most astounding ignorance in tho country of the difference betweon the graduated . land tax and th<) ordinary land- tax. Now, the graduated land tax was imposed on big , estates . ':the . purpose '-'of compelling. subdivision, and for that purpose ho believed in. it—in normal times. But i the effect on somo comparatively-small farmers,. dairy farmers with 200 or 250 i acres of valuable.'land, who went on to their, holdings with heavy ; mortgages, would bo disastrous. > could not afford to pay it in many cases, and they would bo forced to sell. . To force sales of land now would be practically 'confiscation. ' Also it would havo tho effect of. dopressiug values, and as our land taxation was based on valuation,; the effect, of depressing values .would bo to reduce tho Tevenues of the country. He. disapproved of % principle of lovying income tax on, although for hisown part he would not object , to . paying his own. He> agreed that war. profits should be: taxed, 'but tho method-pro-posed was a dangorons one. : Referring to-' the : proposal : to : raiso. a J two, million loan, ho_,held the- opinion .very strongly ; that wo should exercise care, bccause the amount of nioney that could be bor. i rowed in this country was limited. He wquld be very sorry to-s'ge public works that would be reproductive discontinued;' But it was in flis opinion absolutely criminal to sink hundreds of thousands' of pounds in a-work like the Otira Tunnel, which could neverpay. The Budget counselled' "ecorioniy, but apparently ; the, Government did not intend to practise any. He did not believe in eco- ! nomy by., cutting, down salarjeß. ' - - But; he knew that tho effect ol the ,taxatip,ri ; : would; be 'to reduce 1 ,; many Salaries, ~Vi He' ventured 'the opinion that other econo* mies were possible. Now;- when many men had gone to tho' front, somo of the Departments • might'. .Be; j amalgamated.: The Tourist : Department, for. instance,: was useless ; wo could not.'expect many tourists for some years.' .He was in favdur, had been for, many years in favour, _of an- increasor.iii i.the beer, duty. It had stood at ;3d: a v gallon forthirty years;/and, in the meantime' ,'the duty on sugar had been taken off, saving brewers £30,000 a year.' -.-In later years the legislation limiting the num* bor of hotels had ; made the: brewers rioh, .They owned eighty or 'ninety per cent, of the hotels, audi the, value of the goodwill of these hotels was not less than a, million sterling. A tax of 3d. a gallon on beer would- produco £120,000, and the . brewers could afford to pay it. Furthermore; any effort to pass it on would bring speedy retribution. , Prohibition would be carried Wherever it was tried.'',;'. ./ . ', Other Members' views. Mr.-T. K. SIDEX; (Dunedin 'South) said that apparently no attompt . had f>e©n made to reduce expenditure or curtail ; .-- v borrowing.., . Regarding • tho £2,000,000 local loan,' lie suggested that a provision attached to the loan, under which it was possible for the holders of; the debentures to tender "them in payment of death duties, .should be added'here, It would make, the. loan more attractive to investors.' He did not, think tho export tax proposals were .altogether favourable, for they would not be agreed to after; the .war when the prices of products fell. . Mr. R. P. HUDSON (Motueka) said that he did not believe there would be any general complaint against tKe'taxes whic.h were to be imposed. 'On the conthe people'wno could'^not : serve the/Empire by taking up arms would esteem it a privilege rather than otherwise to contribute : to tho' great cost, which the war involved. Ho ■ would support the tax on petrol if . the tax would .fall only on the owners of motorcars, . but unfortunately the tax would affeot peoplo in industries, for instance! dairy: farmers and fishermen. / Mr. .A. E.: GLOVER (Auckland Central) was the last speaker; ' ,'He said that ho vyas prepared ' to 'carry ;:, "his' little burden of Empire." He suggested that the State, in addition to tho tax on totalisator dividends, should appropriate totalisator '-fractions" now retained by the racing clubs. He also advocated the holding of State lotteries; saying that ho deplored the Sending of so much money out of New Zealand for Tattersall's sweeps. ' Out of>Stato lotteries we might make £100,000 a year. ■ ;y. , '. . The debate was adjourned on the motion of Mr. G. J, Anderson, and the House rose at midnight. ' , ,