FINANCIAL DEBATE

Dominion, Volume 10, Issue 3165, 17 August 1917, Page 6

FINANCIAL DEBATE

A NIGHT OP STRAIGHT TALK

ON LOST OPPORTUNITIES. Mr. C. E. STATHAM (Dunedin Central) was the lirst sneuKer m tlio Financial debate for tuo day. Ho said tnat his cruel' grievance against tlie iNalional Government was that it wns too slow to grasp opportunities. Now this year tne Government luul adopted proposals advocated ill tho House two years ago. Last year tho Finance Minister could not bo persuaded to impose an amusement? tax, and now he had agreed lo it, and in the meaiitimo much rovciiuo had been lost. Sir Joseph Ward,: I am not at all euro that it is riglit yot. Mr; Statham said that the Excess Profits Tax had been about eight months' late. Only this year had tho question of taxation of luxuries been, really grappled. He feared that the raising of loans locally by the methods proposed would hamper us in the future. To lake all this money free of income tax would mean that all the capital would bo locked up, and that thoso who came back from tho war and tho unfortunate people who had not invested in bonds, would have to bear tho wholo brunt of the war cost. The Treasurer had adopted, the rate of 41 per cent, free of income tax in order not to raise the rate of interest for privato borrowing. But, said Mr. Statham, the effect would inevitably be that interest for loans on mortgage would have to rise (o 7 or 8 per cent, llegarding the dispatch of reinforcements he had already expressed the opinion that the-Minister of Defence had allowed his zeal to outrun his discretion. Wo had been sending away reinforcements at the samo rato its at the beginning of the war, whereas in Australia, by arrangement, he- believed, with the Imperial authorities, tho monthly draft had been reduced from 10,000 to TOCO. If U\e country was not to be 6adly impoverished many exemptions would have to bo givcu to men from the country industries.'' Mr. Statham went on to refer to the unsatisfactory condition of much of the hill land Of Otago, mostly. National Endowment lands, due to the unsatisfactory pastoral lease tenuro on which the laud was held. In Otago thero were 2,374,352 acres of National Endowment land, which gave baek a return to the State of less than threepence per uore. The preferential tarifl, while it was intonded to give proferenco to British manufactures, wns at present recoiling on the heads of the people of Now fcaland without helping Britain at all. Ho did not agree with the Finance Minister when he said that ho could not afford to put a heavier duty on motor-cars because ho did not wish to loso revenue by restricting imports unduly. He thought the revenue could bo made up in a better way than by sending so much money ouj of the country. He olpecled to tho tax on tea as likely to inueaso tho cost of living.

Taxes on Liquor. Ho regretted that the Government had Hot taken an opportunity to jut "a ( good thumping lax on whisky and beer. ,11 the Government would only bring in heavv taxation on these beverages, the Hous'e would support him. The Government had only played with the question by putting a tax of a shilling on-spirits and a tax which no one could calculate on beer. He believed if a heavy tax had been put on liquor it would have done more to reduce drinking not only m the. evening, but all day long,'than early closing. . Mr. Harris: The National efficiency Board says close them altogether. Mr. Stathani: "Well, close them altogether if you like and pay compensation." In regard to early closing ho feared tliat the Government was going to tall between two stools. They were not going to close tho hotels at six o'clock. Mr. Isitt: How do .you know? Mr. Stathani': "I know just as well as the honourable gentleman does. Ho added that the compromise the Government would propose would please nobody. He thought tho Government would would be well advised to drop the early closing idea and put a duty on spirits and beer. He approved ot tho amusement tax, but ho hoped the Minister would exempt from the tax tho subscriptions to musical societies and similar institutions which were partly educational. He was glad tho Government had given a bonus to old age pensioners, but he thought this should have been done last year. Wo had given £100,0011 as a war bonus to Civil Servants last I'vear, and the whole charge upon the country for old age pensions was only £4S0,Ol)0, Surely this had not been to our credit. , Mr. Brown Finds Fault.

Mr. J. V. BROWN (Napier) said at the outset that he intended to criticise the Government, and he, would not kiss them afterwards and say he didn't mean it. The Government, lie declared, had been bluffing the people for years, setting up committees and pretending to do things, but doing nothing. One of their latest bluffs was the setting up of this Cost of Living Committee of the House. Ho hoped the Government would not put the duty on tea, but would raiso the money bv taxing beer if they liked. (Hear, hear, "and laughter.) Ho thought the tea tax would be burdensome on women. He was in favour of a tax on some amusements, i but not the pennv tax on sixpenny tickets. Tho Government was not taking the members into its confidence. Sir James Allen had complained in 190!) that Sir Joseph Ward had not consulted the House about the gift of a Dreadnought, but he himself had not consulted Parliament about his undertaking to send away 2500 men per month. He had proved himself an absolute autocrat. Mr. Brown contended that New Zealand, in proportion to population, had sent too many men already. If other countries sent monthly reinforcements at the same rate Britain would send 112,000 men per month, Canada 18,000 per month, Australia 11,800 men per month, and Russia 410,000 men per month. The Minister had misled the country when ho said that New Zealand was not sending more than its proper proportion of soldiers. It had sent more than its proportion, and at the same time it had provided huge quantities of foodstuffs for the United Kingdom. He could not see why the Minister of Munitions objected to publish the names of contractors. Was that because some of them were foreigners? There should be no concealment of names at the present lime, and no persons of enomy alien blood should get a contract from tho Munitions Department under any conditions. He believed that changes in the personnel of tlio Ministry were highly desirable. It would be a very rood thing for the country to give tho'Minister of Defence a holiday. ITe had worked hard under trying conditions, and it would be a proper thing to let somo other man have a turn, lne amusement tax ought to be heavy on the Men-priced tickets, but it was not fair to raise the price of the picture theatres to the women and children.

Sharp Criticism. Br A. Tv. NEWMAN (Wellington East) said he did not object to criticism ot tho National Government. tho Ministers needed criticism. Jlut ho noticed that tho Liberal members always condemned one section of the Cabinet. Jiis own idea was c that neither section of the Cabinet deserved much credit. lno Tieform Government had been a great den 1 , hotter than tho mtional Government. It seemed to him that the Government had teen vitiated by having so manv Liberals'in it. The House had hoped that the good, qualities o each section would neutralise the bad, but tho parties had not mixed well. . JNohodv ever loved the National Cabinet, said Dr. Nowmun. "We endure it. It is ono of the horrors of war. But it should be Riven a fair deal all round. If eomo member of the Reform Party put tho 'tax on tea, some member ot the Literal I'arty let off beer. That is my opinion Tho member for Christchurch Last said the other dav that there was a vacant seat on the Liberal side of the Cabinet, and that it ought to b" filled. The vacant portfolio is in the gift of tho Minister of Finance, win. is leader of tho Liberal Party, and if you want to know why he does not fill it up, look at the Opposition benches niu see how manv people want that job. If he pleased one 'man, ho would annoy twenty others. Therefore, like a wise man, he postpones tho appointment until after the session.

A Policy Wanted. "If no criticise the Government, let vs critioiso it fairly.. .Their greatet

weakness is thoir failure to get a policy. What this country wants is a policy and leadership, but after three years' war we have not got either the policy or the leadership. The members of Parliament do not know what tho Government's policy is." Hon. G. W. Russell: Win tho war.

Dr. Newman: "Yes, but you have dono so badly that you will not win it tho way you are going." Ho and other members who had visited Britain during tho recess had conic back convinced that tho timo had come for New. Zealand to send fewer men and more foodstuffs. They had expressed their opinion m the House, and the Minister of Defence had raged against them, accused them of being faint-hearted, and said that tho Dominion must send the last man and the last, shilling. Sir .Tames Allen: I said Jiothinsr about the last man and the last shilling- I never have. Dr. Newman: You said we must keep up our monthly contingents throughout the war Mr. Massey said that we must send all tho'men we could. But within n. week you said that you would cut tho contingents down at, once, and you gave a hint that you would cut them down still more.

Sir .Tames Allen: No. Dr. Newman: Then some of us asked that the men of the Main Body should b" given furlough. The soldiers of other parts of the Eiunire had received furlough. Ton said that it was impossible, and that the suggestion was preposterous. Hut within a week you got up m this House and said you would nllmv the Main liodv won to come home. Tt is this vacillation from day to day that makes us all feel that the Government has no settled • policy.

Time to Take Thought. Tor the first lime in the three years of war this country was going to feel tho pinch of war. it had never felt it before. We had been borrowing lavishly and squandering a lot. We had been living in 11 ialse paradise, hoping that the war would be a short war. The Prime Minister had said When the Expeditionary Force was sent away that ho uiought tho war would bo over in a few months, but there was now, after three years, no sign that tho war would bo over in 1918. He wished fervently that it could be so. And we were already m a morass- oi debt. This time next year the net debt of this Dominion would be which would mean an enormous interest bill for us to pay. , . Mr. Payne: It's better than losing it to the Germans. . Dr Newman: If we have to raise the debt'to .£300,000,000 we must still go on. But he thought tho time had come ior us to see if the expenditure now going on could not be reduced. One of the -most remarkablo facts about the Government was that not a member, of it ever uttered the word "economy. iheir bloated Estimates this year showed that no attempt was being made to introduce economy. No control was being exercised over expenditure The Minister ot Defence proposed to spend on local defence up to '.£530.000 in the year. Surely at a time like this, when we had 80,000 men in arms, and when we wore going to put 100,000 men in arms, we could cut down expenditure on local defence. Nor could wo afford an expenditure -i .£2.*000, as was proposed, en such uxuaies as telegraph extension. The people would not giumble at taxation if it was levied iustly. His chief objection to our present taxin" method was its complexity. The' excess profits tax had bee*.repealed, but we had collected die tax so badlv here that this was forced iipon the Government. In England tho tax wns still a success, and tho rate of levy had I>eon raised to 80 per cent. Ho would like to see income tax levied by a singlo straight-out tax. graduated. B> protested vigorously against the action of the Government in imnosing the unconstitutional butter tax without tho i consent of Parliament.

The Taxes. Regarding tho income tax he would like to tell the Treasurer that in all decently governed countries distinction was made between earned and unearned incomes, and between- single men and married men with families. The income tax on companies would be exceedingly burdensome. If a company was making .£GMO, owned by 400 eharoholderi?. they would all 1)0 taxed at the rate of 7s. 6d. in the ponn'd. Thoro should he a scheme for allowing a. rebate on all dividends drawn by people with incomes below t*io nxemplion. Something of tho kind would have to be douo. He would vote against tho tea ■ tax. Mr. Nosworthy. "Where would you put it? Dr. Newman: T would put it on beer and whisky (hear, hear), and on wine, and motor-cars, and furs, and n. dozen other luxuries. He would certainly movo some resolution to put a heavier tax on beer and to compel the Government to drop the worts tax, which was a German deception designed to let the beer off lightly.

Tho Cost of Food. In his opinion it was very unsatisfactory that the Government should now, after three yenrs of war, set up a committee to inquire into the cost of living. When he camo back from England he found .six costly commissions running. He could not understand why the Government had not taken control of tlio foodstuffs. They should havo appointed a. contrnllor and regulated prices of food. The Government vas already buying butter at Is. 3d. and it was .allowing it to be *old at Is. Bd. per pound. In England the prices of commodities wero fixed, and the plan worked very well. Eo rather feared that, things were not going well with the National Government; they were not very happy. "One side proposes and tho other side disposes," he said. Above all things ho thought the House should not disperse without exacting from the Government a promise that no more taxes would be imposed behind the backs of members in the recess. He thought the Second Division should have pretty well what they asked for as a bedrock minimum, He thought the Government was probably raising too much money. Tly tho end of next year we would have piled up in London a reserve of eleven millions, and he thought we should use some of that money and raise this loan for about eighteen millions. Ho wished above all things that the Government would give the people a lead' with a definite policy. Mr. A. E. GLOVER (Auckland Central) said that he objected very strongly to the tea tax. Tho levy of 3d. a pound imposed by the Government would mean an increase of 6d. a pound to tho consumers. The Government ought not to lower the military age. It would be better to raise the age at tho other end. The monthly reinforcement quota ought to be further reduced. New Zealand had done well, and must retain the labour essential to the maintenance of production. The debate was adjourned on the motion of Mr. Parr (Eden), and the House rose at 10.10 p.m.