THE BUDGET DEBATE

Dominion, Volume 8, Issue 2561, 8 September 1915, Page 7

THE BUDGET DEBATE

' SEVERE CRITICISM : \ '.T—• NO SI£N OF PUBLIC ECONOMY DR. NEWMAN (Wellington East) continued the debate on tho Financial Statement. Ho- said that the , silver , bullet was. the real power in this war. We were already feeling tho strain in . this country, and tho position wis most serious. ■ Ho was .amazed that tho Estimates were more "bloated" than ever. This was a, timo for-economy; and tile Budget :slioiild not alono be a Budget ior this year, btifc for the period of /the war. Ho did not thmlc the Government had met the situation asit.should have been met. • From tho date war commenced it was tho timo for individual and collective economy. At that time the Cabinet should have met to consider tho financial situation> and acourse of rigid economy should have been, decided'on. Yet after thirteen months of war wo found that expondi-1 turo ,went : on just the' samej.' aiid the • Estunates for the year showed an 111-. ureaso. The story was huge expenditure and no saving, -and he did not know how tho country was to go on in this direction. Throughout tho Esti- . aiates there - waV lib hint ; of saving, and no shadow or hint of the need for economy. Already mutterings -could he heard of the coming storm. There had to bo te--Juctions. There .liad boen reductions ind retrenchments in tho past,' but wo tvoro facing a much more serious position- to-dav. And there was no sign oi economy. Ho held that if tho Government, had gone slower on public works' when . they had a surplus; tho monoy would have come in very- handy at .» tho , presont : tiuio.-.- 1 He : also thought 1 that : - tho; sinking . fund might , be suspended ■ for . tho time bomg. Tliero-was a certainty of large taxation n<sxt' year, and it seemed absurd that they should not suspend t-his_ 'Act -this year, • wlien ■;wb were borrowingso heavily ,-v Ho also drow attention.:te tho fact-that next year tho census hod to be taken; and- would cost about £42,000, He would suggest that thus oxpenditilre might bo saved- 'It was-moroiiripartantto savo tlle £42,000 than-i to ifind .out that a few constituencies had increased: by some 500 people !.or so: He -saw: ill 'tlie Estimates .that £40,000 was put down to repl-Aco :tllo ■ Hanemoa. • Tho; hitter's- boilers . might bo pajahed up,; and' that amount ■ saved. He also deprecated tlio extravagance in oonncotjon with) tlio N;i- , tioiiali_Oabmet,.::an(i. said; that -it.': was : high,-tune • soriie ■ of thisr' extravagance' was -) ourtoiUsd.' ; ; Travelling- '■alldw.iiicqs and expenses for the Civil Service must cost something lite £150,000 per annum j "that, should be cut down. Probably or £15(000 might bo saved on the grifjit at a time when-so many of our young men wero ' Kbing. to the front: , whole of the Estimates teamed with, evidences of extntvagahca; £6000 was piit down for oxploring.for gold, aiid yet no gold had bben found for; yeara.; -Without cutting -down. salaries' ho -thought £450,000 might be -savod.' As to taxation he considered that £1,000,000 would havo been sufficient to: raise.- He thought nothing could bo worse than the taxation proposals. , •. "Misefabta Littlß Taxes.'? . •Many of tho miserable little taxes -miglit -hava been done away with,' and three, or four big ones put in; The incotneitax on farmers would oroate a -great deal of trouble,- and would not bring m -what was expected..: A tax of ono .per cent, on exports would have brought in £270)000, and would have cost nothing to -impose. It would liot have' bothered tho ftoners at all ' A one', por cent, import -tax would- have broupiht in £210,000. If those-two taxes •had. been doubled thoy would ' have ■'T>f6iig l iit.* in £960,000—' "vßry iiice iittlb Flim.y.Tho mineral oil tax. was to lid deplored. How much easier to have increased tho tax on beer and spirits, ,to .bring-.'in respectively ■ £120,000 1 and £60,000! ■ ''Some of my. friends over thofe want . a. tea tax," he said, "arid a. tax on theatres. They needn't worry for they will all como next year." There were 'only .;two classes j' he.ooiitinuejd-, affected by tho war—those s ivha , had 'isM® moDoy out of the war, and tlio'so who had lost. it. He vyonld havo viewed /with. favour a. tax .oil surplus' war -profits. Tho .mortgago tax.' . was. not : right. He" was sure many people would

ccouomispiri; varipus directions and tlio smaller taxes would not realiso what was expected of them. It was not too late to expect that tho Treasurer and tho I>rime; Minister woiild consider tho import tax of one. per cent., and. a similar tax on surplus war profits. Tho railway tax was going to hit those peoplo who looked forward, to excursion fares. Ho thought that the time was 'ripe for_ a reconsideration. ''-of' ' the railway , tariff. In a hundred little ways the cost .of living would bo increased to the people. The new income- taxes would press heavily oii companies, and therefore oil a very large number of small people drawing very, modest incomes from investments: in companies. 'g The. Jiew tax. woiild hit these small people who would not be hit by any other class of gradu- i iited taxation. • ' -t Cost of Living. He was sorry to see the Budget pass over so lightly tlie problem of the cost of living. He ivoitld liko to have seen one, Minister of ability detailed'to study this question. It' might be possible,-lie 1 suggested, for the Government to buy and hold at a cheap price enough butter to tido us over the winter/and' keep tho price down, to, "say. Is.- sd. instead .of J a. 9d. Another, suggestion ho made was that'tho Government should not sell all tho meat obtainable, to .tlie. Imperial ' Government, but should of it in fitofo in order that the pe'ojple might bo supplied, cheaply during tlio winter ■ with frozen or chilled meat. The -Gov- ; ernment/ should see .that .enough, wheit, meat, potatoes, forage, and other'necessary food products were retained in tho country to keep prices reasoiinbly low. When, this was assured the Government ; could allow the balance to be exported. Ho realised that more revenue must be obtained, but he would nrge the Govern- ; ment to review the taxation proposals, i iind to drop some of the vexatious taxes, : wbicli, ho feared would not produce the : revenue expected of them. ' . The Two Million Loan. He thought, tho amount of- two mil: ! lions to be bonowed iras too much. All ! luxuiy 1 should 'stop, aiid lie gave in- ' stances of where sayings could bo effcct- : ed. He Emphasised the danger of rely- ' ing too ,iimch on Englaiid. i'or loans. Even at Homo thero was alarm on ac- ' count of the huge amount of money that ' tho; British Government' was' borroiVihg. It had eveii hceii'suggested.tliat if.Wo needed rndro money-for war purposes we I might have to find it for ourselves. ' Sir Joseph Ward asked where thisstatement had been made. r Dr. ; Newnian 'said; lie' had seen ' it in English financial papers,, aud ho would find it for the Minister. Ho hoped that the Government would review, the Estimates to reduce them. t Just now tliero Was nothing commensurate ill importance with tho necessity for economy in case the war is: pro-, ■ tractcd.' • ' Surtax on imports? Mr. J. CRAIG IE (Timavu) expressed approval of the Budget. Ho supported all -that. the! member for Wellington East had said about the heed for ccolioniy, and especially in regard to the increased,cost- .to the country of payinent for additional Ministers.. Ho approved generally of tho proposal for a universal inconio tax, to be' levied on farmers as on other' business men, but ho feared that, owing to the, generous exemptions: and tte difficulty of collecting, .the income tax -oil . farmers, would hot realise much. : There was no getting away, from the fabt that there was; an unrest' in the farming community - which ' would cftu'so trouble soon, Men weregoing from .pilrt 'to' 1 part of - Now Zealnhd buying fiirms and then selling at' a profit. TOen the crash canib he said "God help'those who lie|d dear land." Tho Government should try i and induco. all tlie freezing .ooni-? pariies 'to iii'brbase, their sjxjfage capacity to meet aiiy uhforese'bh;'cbnt-iiigeiicy: : 'Sir. Mdssey: lia'yb. dono ;so. ; : : ;Mr. Craigie . said tliat those iending bn;.mortgage'; tho. ; tixation net. They eliolild be included in the inconie tax, with a reductio'n for the. amount ' paid iinder the mortgage tax; Dealing irith ; the cost of living,■ ho; thought ' the;- Co&binod - 'Miiiistry should devise 'something to 'help : thosb people who liiid to pay scandalous rents ui'.th'o cities. _ He did not thilik anybody would object", to a taS on exports, and ho certainly favoured-■ a oiie per cent, surtax on imports ; it could not be passed on to >the icoiisumer; and would produce about £220,000.The Tax on the Farmers. Mr. C, J. 'I'ALBOT (Temuka) said tlie rncolno tax oil tho. farmer would not bo favoured, aiid lie supposed that tho, farmers would sooner pay an. additional laii'd tax.-. If it made them keep their house in order., by : keeping proper accounts,, tho tak was to hb welcomed.' If the matter was worked out it would ba found : th(vt tho farmers ..were paying more ill their land tax, in proportion to tlio town ihaii's iilcoiuo tax. Aii cxbort tax would bo'a tax in tho wrong direction, for it might limit production to, a certain,pxtsnt, and it- would only be paid by those who bxporle<l their prodiiotsiy. 'He'favoiired' getting, at ilibso iriarkiug large sums through mortgages, and instanced one man who boasted that the' war had/only cost Jiim 7s. (3d. to"datb: : - Ho should .be, made, tb jia j.'-; ' ; ' A nibmbei 1 : He siioiild be 'interned.. (Hear, hear.) ' ■ Mr. Talbot said that if we wero to liavo comparativelydieap bread in Now tiealand wo would havo to grow enough wheat for our own use, and wheatgrowing should bo encouraged by tlie Government.- Ho was opposed to tho tax on petrol. More Suggested Economies. Mr. T. A H;. 'FIELD (Nelson) . thought-that- the country • was ; well--ffle biirden.-of taxatioli-was;

to Up placcd on the proper shoulders. Tho great objection to tlio mineral oil tax was that it would cripple or very seriously, hamper tho fishing industry. Ho thought tho beer tax should bo on tlio same principle as at present, but the tax should be doubled. Spirits could also bo increased from 16s. to 20s. per galloii, and wines might, bear an increase. Some of tlio anomalies in the present method of charging duty on tobacco should bo removed, so that tobacco at 2s. a pound should not pay tho 'same duty, as tobacco worth 15s. a pound. Ho feared that the duty oil cheques would bo vexatious and that it would lead to the discbntiimance in tho -use of cheques for tho payment of accounts. If this should happen it was _ possible that tlio actual rovenuo obtained at tho increased rate would be less than that obtained now. He belioved that everything possible should bo dono to savo money. • Hansard cost £11.000 a year, aud tlio salaries for tlio Parliamentary Library wero £3000 a year. Perhaps there could be economies effected in these departments. The country needed a lead in economy and ho urged that a reduction should bo mado m the' honorariums of Ministers and of members. Tho amount _ saved might not. bb large, but the eft'ect of the example woulcl bo good. Mr, P. 0.-WEBB (Grey) advocated a one por cent, tax on the unimproved value oflahd. -This, ho said, would.obviate the necessity for other taxes which -would increase the cost of living. He sp'oko at some length on the mining industry. ' On the New Taxes, Mr. E. NEWMAN (Rangitikei) said that lie did not think there was any objection to tho amount of revenue required -by ivay of extra taxation, but there, was objection to tlie incidence of taxation.- Ho thought that the graduated land''tax was going to stand, arid as far as war' purposes went he thought it should apply to town and city lands. As to the income tax on farmers, itwould oniy apply to tlio large farmers, but. the farmors already paid a gradu-. ated land'tax, arid this extra-taxation on them, once started, might go on. Ho was very glad that, the Government had resisted the pernicious demand for a tax on exports. Ho hoped that the Government might be.able to remit tho tax on kerosene arid petrol, which , would oppress certain iridustries, and suggested/that if the Government must/have revenue from motor-cars tho revenue might .be obtained by taxing riiotor-cars in use. By this moans the working mail's bibyclb could be exempted from tho tax, and the' rich man who drovo a 20-hoi'sb-power motor-car for'his own pleasure would have to,pay. Mr. J'. PAYNE (Grey Lynn) advocated a State note issuo as the best means of raising money, pointing out 'that the State was already nablo-for the notes issued by the banks; The State was taking 'all the risk now,, aiid making none of tlio profit. Mr. J. G. COATES (lOiipara.) ..spoke against the mineral oil tax and the stamp ..duty on mortgages. _ If tho stamp duty had-to be put oil, it should be graduated, for it was tlio small man who had to borrow money to carry on who would be hit under the present proposals. .A. tax on tea would be better, and 2d. per. lb.. would' produce . about £53,000.. He' favoured an increased beer tax of Ud, por gallon. They could easily malve tho spirit tax 20s.', and no one would ho hurt. A tobacco'tax, and a tax on racehorse winnings would also briiifj in. substantial suiiis. ' Amusements might , also 'be easily taxed.He thought; tlte.'. ; land tax should be iboked' fis ; a-Mvenue-pTpa-uciiig tax, and it should apply . to /the city lands in the' saniiJ: way /as'.te country land's. , v Hb'/tln>iight, spriiething shbuld be dono to ..i-elibvb the corigbstion. lii the kauri gutri 'market. ;; Ho did riot tliinit there was bbjbctiaii tii tlio iricomo tax proposals being extended to the farmers. ' . : Mr. J. M. DICKSON (Clialmers) favoured a substantial , increaso on tho .beer and spirit ; ta.xes. . Mr. F. MANDER -' (Marsden) congratulated tlio Gbverhirient on tho taxation proposals jii.the main. An extra, tax-might-'-bV iAit. on beer, aiiTT he did "not/tliinlv'that/it would'b'e passed on. to tho consiiiiier. ! - ; : ilr'. T. W. : RHODES (Thames) said that the National Government was doing good .work, and it was being appreciated throughout, the Dominion. Mr: R.'IHjETCHER (Wellington Central) moved-the adjournment of the debate. 1 . The House rose at 0.12 a.m. till 2.30 p.m. to-day.