THE HOUSE

Dominion, Volume 10, Issue 3167, 18 August 1917, Page 8

THE HOUSE

Tho House of Representatives met at 2.30 p.m. " The Western Taieri Land Drainage Bill (Mr. 11. Scott) was introduced and read a first time.

FINANCIAL DEBATE PAYING FOR WAR BY TAXES SUPERVISION OF EXPENDITURE. Mr. C. .1. PARR (Eden) resumed the debate on tho Budget. Ho eaid that ho agreed with Iho i'inance Minister that it might not be wise in the middle of a war to stick to the old and tried methods of raising money by taxes. Me believed, however, that wo could with advantage have taken steps to take by taxation more of the huge profits made out of tho war in tho early stages of the war. Most economists were agreed that an appreciable part of the capital cost-of tho war should be borne by revenue, and that the whole cost be not passed on, as it was in thie country. But this country would at tho end of the year have a nurplus of eleven millions in England, and in some shapo or other this would be devoted to the capital cost of the war. There should be a clear understanding with tho House that this surplus should be used only for the purpose of reducing tho debt incurred in carrying on the war. Referring to the income tax on companies, ho said that there were many companies in New Zealand wnic'h were development companies owned by a large number of shareholder; many of them of small means. It was not fair that these peoplo should be compelled to pay income tax at tho highest rate There shouild bo a system of rebate to people of small means, such aa was adopted in England. We were expending money at an alarming rate, and not nearly enough supervision was exercised over this expendituire. It ws argued bv the Defence Minister that his officers were business men ill civilian life, but they wore not all of them such successful business men as the Minister would have tho House believe. Theio should be some control over them. Why should the country be under the domination of some major or col-, onel? In England supplies were bon-hl by General Richardson normally, but. General Richardson was a very busy man, and actually the whole ■hugo business of purchase, was in tho hands of one. officer, a major by rank. Australia, had 'taken steps to eliminate waste by appointing a civilian controllci for the purchase of supplies. He hoped tho war would 1» over next year, but this country should plan and organise on the assumption,' that the war would continue for two, or possibly three, ;years longer. Wo should organise our manhood and exercise the most rigid economy in expenditure. We must also organise for production. In any rational view of how to win tho war the supply of men and production and industry must be kept up. Reinforcement and production wore interdependent; without production wo could not send men. Tn England the business of tho country was kept going very much as usual, as the trade figures showed quite clearly. Mr Parr went on to refer to the shipping problem. He said 'he believed in a State-owned service. Tho government, in co-operation with the producors, might well purchase twenty or thirty ships. Th'is would make them independent of outside companies. He assumed that competition would continue, but the competition of tho Government steamers would keep down freights. It would, of course, be folly and extravagance to buy ships in war time, but the shipping rtuestion should be one of tho first problems to be tackled after the war was over. .

Union is Strength. Mr W T. JENNINGS (Taumarunui) said 'that he regarded the Budget as one that the House should support, ihe duty of the Minister of Finance at the present time was to get money for war necessities. Sir Joseph Ward had shown in the most conclusive way that his Budget of 1916 was a successful money"etter. and there was no doubt that his new Budget would be similarly successful. Mr Jennings said he felt that the House as a body scarcely regarded the war seriously enough. He wished that the National Government had followed the example of the Australian Government m the purchase of steamers. Mr. Hughes had shown courage and wisdom in that respect and Australia would reap the Mr Massey: The New Zealand Government has 'a ship loading at the wharf now. . , Mr. Jennings: "I am very glad to hear it" The Government ought to be doin" more in the development of the coalmines in the interests of the community. Mr. Jennings drew a contrast Imtween the Socialists of Germany, who were fighting unitedly for the victory of Prussianisui, and the Socialists of British blood, who quibbled over trifles and failed to support their country eohdly in time of war. Hβ believed that some part of the opposition to tho military power in New Zealand and elsewhere was due to a feeling that influence had been used to favour certain individuals. He believed the Minister of Defence was the last man in the House to lend himself to favouritism, but there was a, feelin" in the country that some men had been able to get commissions by influence. That sort rf thing should not exist Referring to land questions, Mr. Jennings said that he was a. warm supporter of close settlement, but people who talked of breaking up estates at the present time ought to realise that it was verv difficult to sell land m New Zealand 'just now. People could not cut up properties successfully under war conditions. He was sorry that some members had described as extrava"ant the Government's expenditure on telephone extensions. The provision or telephones Jα the country districts ww often a matter of life and death, and he hoped that the Government would not elav the good work. The cost-of-living problem certainly required the attention of the House., but in A,u,. iralia had shown very plainly_ that the control of prices was not the simple thing some people imagined it to Be. Even Germany, the' most ised nation in tho world, had failed to control prices. Hβ would, not argue that the Government could do nothing. Ho hoped that the committee set up by the House to inquire regarding the cost of living would bo able, to suggest some means of cheapening the necessaries of life. The methods of the Public Works Department in the construction of roads were hignly wasteful. Ihe Department had not kept abreast of modem systems,'and could enormously increase its efficiency and improve its results by using: .motor transport lor road-making materials.

Remission of Tax on Loan Interest. Mr. IF. G. ELL (Christchurch South) said that timo alono would show if the Minister of Finance was justified in his assumption Hint by fixing tho rate of interest on tho War Loan at 4J per cent., free- of income tax, ho was keeping down tho price of money throughout the country. It had been shown that the tree-oi-incomo-tax provision would give a special advantage lo big investors. Sir Joseph Ward: I have here ft telegram from the Auckland Savings Bank, a body of small people, stating thjit they

have decided to put .£200,00(1 into the War Loan. Air. Ell said he believed that the graduations of the income tax ought to be continued above the present 1 LiniL of .£6IOO. The people who received very large incomes ought to make correspondingly largo payments. Sir Joseph Ward: It would mean taking away the whole of the income from some people in this country. We don't want to ilo that. We want them to keep on paying towards tho revenue of this country.. Mr. Ell said he objected to tho tax oi> tea. There should bo a tas of 20s. a gallon on spirits and drastic taxes on many luxuries such as jewellery and coslty Ichinaiware, but tihe .necessaries of life should not be touched. Tho amusement tax should apply to racecourse tickets. He agreed that the control of prices in war timo was not an easy matter. The Government had checked the increases at some- points. It was easy to see now that the proper course would have been for the Government to purchase all produce at reasonable prices at the outset of the war.

Mr. Ell said that New Zealand was fairly in the grip of the big shipping interests. Tho Government ought to 'ake action in co-operation with Ihe producers, with the object of providing proper shipping facilities and keeping down freight charges. The Minister in charge of tho Returned Soldiers' Department wad doing good work, but there should bo a closer association between this Department and the other Departments of Uo State. Good and Bad. Mr. E. M'CALLUM (Wairau) said t.hat he had novor been, enthusiastic in support of tho excess profits tax, and lie believed that if tho truth, were known Sir Joseph Ward did not approve o£ }t either, but had been driven to adopt it by popular clamour. The tax had bec-ii most inequitable, and many people na<! had to pay unrcnetmably high imposts. But for the great and unfailing vact of the Commissioner the collection of the tax would have given rise to a great deal more friction. He was extremelyglad that the tax had been repealed. The most satisfactory feature of the Budget was. that the Finance Minister had achieved all that he set out to do. All his estimates with the exception of §ho return from tho war profits tax had been on the right side. The. Minister had also instituted a strong, self-reliant policy. A particularly wise move was tho establishment of the reserve fund in London. The Minister had not been "led away by the' moralists"; it xas cot "a wowser Budget," not the sort of Budget tho prohibitionists would dicfeite. It was particularly satisfactory that the Minister and his colleagues had been able in these times of stress to keep their heads. He (Mr. M'Gallitm) thought the Minister would get the support of the House if he decided Mint ho would not be defeating his object by pubticg a bigger tax on beer. If euoli wei'e proposed, he (Mr. M'Callum) would be inclined to support it. "He suspected tf.afc the tea. tax would be withdrawn owing to yie protests of "the smaller members of the House." He knew that it was true that there had been profiteering in tho war time, and he reprobated it strongly. Any man who was richer by the war was ti wretched ereatu ■?. Aiiil the same applied to the effort of certain factions, so-called moral reformers, wLo were under the guise- of patriotism trying to use the war to seours power lor their factions by using the plea of war sacrifice. This was , just as despicablo almost as profiteering in war time. Ho hoped the Government would submit b> tho people at tlie liquor po!i the issue of State control of the traihc. lie was not a,n advocate of State ownership, but he thought the trade dhould be more directly controlled by the' Government. Every licensing committeo should lie abolished, and the wnole business put under the direction of a responsible Minister.

Mr. Forbes: How would you like the job? Mr. M'Callum: "1 would just love the billet. 1 recognise that it would probably mean political annihilation for me, but I should like to have the privilege of laying the foundation-stone of this improved system. He added that every tied house should lose its license. Above all, some reform was necessary because this internecine war of factioiiH was not. for the good of tho country." (Hetsr, hear.) lie tspoke of the danger, which ho urged was a real one, threatening this country from the spread of the military cult. If the Parliament did not take care it would happen that the military would be found undermining the authority of Parliament itself. Tho influence was insidious. Hβ thought the Minister of Public Works should have been provided with at least another million of money. The cry ior economy was a proper one at this time, and there was speolal need for economising in defence expenditure. Hβ had heard allegations of waste in tho camps, but he had satisfied himself that the waste was not there. It was somewhere el6e. The Minister of Defence was chivalrous enough and gallant enough to assume all the responsibility for it, but ho knew nothing of it. Our hospital ships had been unnecessary, and there had been other bungling and extravagance. His last word to the members of the National Government was that they should "Keep their heads."

A Defender of the Government. Mr. E. NEWMAN (Rangitiiei) said he did not think much of toe fear of the member for Wairau of militarism in this country. Our citizen armies were not on the same footing as the despotically controlled armies of Germany. He did approve of the cry for economy, and would like to see the Defence Committee reconstituted. The taxation to be imposed this year was very heavy, and he did not think there should any longer be a, demand for what was called the conscription of wealth. Taking into account land tax and income tax, the rate rose as high as 15s. in the pound in the higher grades. Surely that was high enough; he believed it was the highest in the world. Mr. Wilford espressed incredulity about any person paying the rate of 15s. in the pound. Mr. Myers: My firm pays 133. 6d. in the pound. Mr. Wilford: Oh, no; the public pays. Mr. Newman said he would like the Minister, if he could do it by any readjustment without loss of revenue to exempt mortgaged interests', in property from taxation. He knew there were difficulties, but he hoped the Minister would find a way. Any stranger entering the House and hearing the debate the previous day wonld imagine that the Government he<l not the confidence of the people. Mr. Payne: Nor has it. Mr. Massey: Oh, hasn't it? Try it! "An Tion. member: Move a vote of iioconh'dence and see.

Mr. Newman said that an honourable member had add that the Government was "one of the liorrora of war." A newspaper had described it as "a. vitiated Government." "If," he said, "Ministers are not going to defend it, I am going to defend it, becaus-i I am a strong supporter of the National Government. . I believe it is the best Government we could have had, and the only Government that could havo carried this country through since the war began." Some 06 the complaints of members had been rather extraordinary. One had been indignant at the young officers "swaggering along the Quay twisting their moustaches." "Surely," he Nxid,

"it is not a good ground for complaint that a man in khaki doesn't shuffle aloug in the gutter and cast down his eyes every time he pp/ses a member of Parliament, but walks erect, and carries himself proudly as he should."

Where Honour is Due. Mr. Newman proceeded to speak of the ndiriiniscration of tho members of the National Government. Ho paid high compliments to the Defence Minister and his organisation, holding that Sir James Men was entitled to the highest praise as the Minister in charge of the great organisation which had raised, equipped, and trained a force which had won tho highest praise for gallantry and general good soldiership everywhere. Ho believed also that Mr. Myers, as a trained and successful business man, had done excellont work in ciargo of tho purohn-so of supplies for tho camps, buying at tho cheapest rate, and taking all possible stops to secure good work by contractors. Ho admitted that some waste did occur in camps and elsowhcre, but waVie was unavoidable in war, and lie denied that the waste was more than was impreventable. Aleo, reasonable steps were taken to eliminato or reduce waste. The Efficiency Board had marlo reominondatios in the direction ol eco-

lioiny. Hβ had always regarded alcohol as .a luxury, and he .would be, glad to have it prohibited-, during the war. The Ejficiency.j board had done very good work in thej country districts, where the creation of, local committees had .been of very great assistance to farmers and others who:| were called into camp. The board had j stated its opinion that serious difficulties-! would occur if any attempt were to couscrip labour for industrial purposes., He agreed with that view. The workers! could not be treated as industrial con-; scripts without producing very serious; difficult)-. Ho entirely agreed with the-j Government in its effort to keep the price] of butter down, but the method.! adopted had been a bad one. There was] no doubt that the Ministers had done) their best to keep down the price ofl; wheat, flour, and bread, but there wereC still weak points in the arrangements..! He felt fully justified in continuing to'! support the National Government. Thej Ministers had fulfilled their pledges as far as defence matteru were concerned, and that had .been tho chief duty. Hβ did not regard the future with alarm. Hat did not believe that tho Central Poversj could hold out very much loriger againsfci' the forces now arrayed against them. If! the Russians hail not collapsed ternpor-! iirily tho enemy would have been knock-) cd out this year. When the war was* over, there would bo a period of very; great commercial and industrial activity, and he did not doubt that New Zealand) would share tho revived trade and increase its production and prosperity. Mr. Payne is "Nauseated." Mr. .T. PAYNE (Grey Lynn) said it warf nauseating to him td hear one- member after another assisting to swell the heads of tho ministers. There was nothing wonderful about the success of the Minister of Finance in getting the money ho wanted. He had merely to take it under tho powers given, him by Parliament, and Bis only difficulties were connected with problems of political expediency. Ho believed that a world-wide plot was being worked by the financial interests of all nations to put untold millions beyond the reach of the income tax. The rich men of the world did not intend to help pay the cost of tho war. Tho war in the beginning had been an effort on' the part of German financiers to secure >}jiancial supremacy.. Tho Kaiser had been the puppet put forward by the men of money. The war now had to be fought to a conclusion, but the people should understand the position, and sec that they were not fooled again. Mr. Payne 'proceeded to urge the Government to establish a State bank, which would be able to finance the war charges and repay the whole of New Zealand's war expenditure with State cheques. Mr. Massey: Promissory notes? Mr. Payne: What are you travelling on now? What are your war bonds? Are they not promissory notes? What a stupid interjection. (Laughter,! ■ There is nothing behind our bonds and notes but this Parliament and the credit oS this country.

Mr. M'CoJlum: C4old. Mr. Payne: "On March 31 the public and private deposits in the New Zealand banks; totalled .£4(!,35f1,000. The amount of coin and bullion available to repay those. deposits was ,£7,863,000. Gold, indeed!" Sir. Payne added that the Budget fravp liim more satisfaction than any otber financial proposal introduced :n the House, since it recognised the sound principle of graduated income tax. A Burden Cheerfully Borne. Mr; A. HARMS (Waitem'ata) eaid that he believed the people would accept and bear cheerfully such burdens as were put upon them to help the country to carry on the war.j but not to provide money to pay war'bonuses and'highlypaid Government officials. ]n voting these sums .last year tho Government, had done «v grievous wrong, which had raised great and widespread indignation throughout the country. He would oppose the voting of 6uch grants this year. Mr. Massey: Why diiin't. you oppose it last year? Mr. Harris: For the simple reason that I didn't realise what it. was that was proposed. Mr. Jlassey: You ought to be ashamed to say it.

Mr' Harris advocated the reduction ofi the income tnx exemption below -£300 to t say, .£2OO. Ho believed that working men,; the artisans and men earning upwards' of .£2OO a year, woulil bo willing to carry,! a'share of the war burden. He did not;, think the tax on tea ivas an unduly heavy,' burden. When the people hero thoughts that the tax on lea in England was Is. lil pound, they would come to the concM sion that they'had little to complain; about. Hβ strongly urged the ment to give effect to the recommendation of the National Efficiency Board in favour of six o'clock closing. The people were ontitled to that measure of reform. The alternative was the holding of the trionnial licensing referendum at its proper time this year. Hβ knew what would happen to the'liquor trade in that case. The debate was adjourned on the. mo* tiou of Mr. J. A. Young, and the House rose at 11.10 p.m.