COST OF LIVING AND TAXATION

Dominion, Volume 12, Issue 6, 2 October 1918, Page 6

COST OF LIVING AND TAXATION

<3> : WHAT THE NATIONAL GOVERNMENT HAS DONE _i_ STATEMENT BUT THE HON. W. D. S, MCDONALD,

Tho Hon. W. D. S. Macdonald, interviewed last evening, made the following statement in regard to criticisms that havo been made by the various candidates respecting the work of the National Government in its endeavours to deal with cost of living questions, Imperial purchases, . and finance:— * ' The cost of living problem has been prominently before electors during this election, and a- good deal of the criticism levelled, against the Government has undoubtedly been mado in ignorance of tho difficulties that have had to bo faced. Are wo not bound to admit that in New Zealand we are infinitely better off than arc our kinsfolk in other Allied countries, whom at times starvation prices have ruled and strict rationing has had'to be resorted to? Here, although prices are high for food compared with pre-war rates, thrro has never been a sbortago of essential foods,'nor need for rationing supplies. Most of the workers havo had steadier employment at increased rate of wages than in pre-war days to enable them to meet the increased cost of living. During the war period wage increases to t.lio workers, as .shown by the' Government Statistician's figures, range from 4 per cent, to, 37 per cent., the average lininsr. in the vicinity of 20 per cent., whilst a fact that should not be lost sight-of is that there is work availablo for all members of workers' families, girls ami boys, at wages from 25 per cent, to 100 per cent, over pre-war rates. The Government,, itself, was employing hundreds of female clerks, most of whom were receiving a minimum salary of £'2 ner week, and the demand for tlio, services of boys bv private employers could not possihlv be met. Dealing with the mai" foodstuffs in the Dominion. I-would liltp to «v that in respect to meat, local prices are governed, of course, by the arrangements mado between the Imperial Government and tho New Zealand Government. The Board of Trado has controlled the retail price on the basis of the purchase price paid by tho Imperial Government. I think it can bo fairly claimed that the Government lias done much in keeping down prices, but the difficulties will be recognised when it is understood that prices cannot possibly bo maintaiued at pre-war level when wo aro withdrawing every month large numbers of men from productive work, seriously affecting the production on tho farms of the prime necessaries of life, and, above all, seeing that the bulk of our food is required by tho Imperial Government for the use of the armies in the field. Board of Trade. In this connection I would like to reply to tho criticism that has been levelled against tho Board of Trade. During the absences of the Prime Minister, who is president of tho Board of Trade, I havo had the privilege of acting in his stead, and I can assure the public of New Zealand that there is no harder working Government body in this Dominion than tho Board of Trade, nor could any similar body have accomplished more in tho time at its disposal. The difficulties it lias had to face havo been almost insuperable, and necessarily most of its work must he done in camera as it concerns itself with inquiries of a highly confidential nature, involving a thorough investigation into each industry, and the information desired could not bo obtained from the'manufacturers and employers of labour generally unless some protection wa3 given. I state emphatically that the work of the Board I of Trado has resulted in tens of thouI sands of pounds being saved to the ! roiifiimers of New Zealand, and I would specially commend the board for its;work in connection with tho wheat problem.. If the"public only knew the facts as I know them they would not by backward in recognising the ablo work of tho board in th'is connection. A Not only has the board had to consider the control of the price of these commodities, but at times, owing to ' shipping shortages, it has been difficult to supply certain localities with their requirements, but tho public has, fortunately, not been aware of any crisis, as at the eleventh hour tho position has invariably been met. When tho history of the work of the Government in connection with tho control of food prices comes to be written, I sincerely believe that it will bo admitted by the historians that we have mado fewer mistakes in New Zealand in this connection than any other part | of the world. Those who have studied tho question know that tho fixing of prices is an exceedingly difficult and dangerous proceeding, and as far as possible the Government, through tho Board of Trade, has onde?voured to come to agreements with the parties concerned not to exceed prices, rather than to fix thorn arbitrarily by Order-in-Council. Although the workers nro Undoubtedly feeling the "pinch of high prices very materially! I hope they will bear in mind that their brethren across the seas have infinitely greater burdens. Purchases by tho Imperial Government. A great deal of criticism has been levelled against the producers of New Zealand, and especially against tho Bight Hon. Mr. Massey and Sir Joseph AVard in connection with tho purchases by the Imperial Government of New Zealand's primary products. These gentlemen have been accused of driving a hard bargain with the Imperial Government in connection with the negotiations for the purchase of mutton, beef, wool, butter, and cheese, but. tho critics do not understand tho position. Now Zealand is only one of the overseas Dominions. Britain was also purchasing tho same products from tho Commonwealth of Australia and . the Dominion of Canada, and the Mother Country recognised that as each of the Dominions and Commonwealth States would bo making great sacrifices in men and money it was only reasonable that all should be placed on a parity in regard to prices paid for produce. New. Zealand made no demands on Great Britain to extract tho uttermost farthing for its products—all that it asked was to be placed in the same position as to prices as the Dominion of Canada, and the Commonwealth of Australia, and the British Government recognised the justice and tho reasonableness of this request. The prices paid for these products enabled us to meet our war obligations, pay our soldiers higher r,ates than tho soldiers of any of the other combatants, provide adequate pensions I'lid allowances to dependants, and furnish remunerative employment for the whole of our industrial population. The Government instead of 1)0ing adversely criticised should he complimented on the arrangements made on behalf of tho producers and workers of this country, as the foodstuffs were supplied to the Imperial Government at reasonable prices. That this is so is evident from the fact that during the first two. years of the war tho Imperial Government paid to neutral countries £9,000.000 more than lltey paid to New Zealand for the same amount of produce. I. would emphasise that notwithstanding this discrepancy in values New Zealand has on the

whole paid fair wages to its workers, maintained fair prices under war conditions to consumers, and also maintained a sound, strong financial position. Burden of Taxation. One of the candidates (Mr. Eraser) has made the astounding statement that New Zealand is doing nothing by way of taxation to finance our war expenditure. That statement must surely bo clue to ignorance of the, real position. Sir Joseph AVard, before his departure for England, was able to announce that the surplus of receipts over expenditure, for the last financial year was £5,055 ; 936. In normal times the practice is to impose only what taxation is required to meet the current expenses of Government, but these are not normal times, and the expenditure is extraordinary. Wo. aro meeting out of revenue the interest and sinking fund payments in respect to the money required for carrying on the war, and as the surplus shows wo aro doing more, and that to the extent of over £5,000,000 per annum. Our surpluses aro mostly invested in Imperial Government securities, and by this means we are rapidly reachingvtho point when we can say that New Zealand, by investing an equal amount to that which in the early part of the war we borrowed from the Imperial Government, has financed the whole of its share of the war. _ AA'ho boars the burden .of taxation? The aim of the Government is to place this on tho shoulders of these who are making most out. of tho prosperity caused" by the war. Except for the small tax' on tea to meet the war bonus on old-age and other pensions, tho Customs "tariff has not been altered during tho war, for any alterations affecting the imported articles_incommonv.se would further raise their cost to the wa"-e earner. The income tax has been the" chief source of increased revenue, and thus the cost of our share of the war is thrown on large, incomes, and cannot he passed on tu the consumer of commodities. It has been suggested that tho Government is not taking a fair share of the war profits. If last year we took five millions more than was wanted for the country's immediate use, and as our accumulated surpluses of this "over-taxation," if I may so call it, now amounts to ten and three-quarter millions—what becomes of tho argument that war profits are not being taken? This growing surplus will bo a source of great strength after the war if tho prices of products declines and New Zealand's national income diminishes with corresponding reduction to the revenue of the Consolidated Fund. The important schemes for developing the country, providing employment for returned soldiers aro in no danger for lack of funds, thanks to the sound policy of taking as much revenue as possible froni taxpayers while they are able to pay it. . To-day everyone who looks to the future liberty "of mankind must have rejoiced at the glorious news of victory that has crowned the efforts _ of the Mother Country and her .Allies, and whatever our small financial sacrifices may have been they are as nothing compared with the great sacrifices that our brave men havo mado in tliis world war, and when wo read of their glorious deeds all our potty little ; grievances must sink into insignificance. Tho National Candidate. Finally I would liko t'o say -.Mat I trust every voter in Wellington Central before, casting his or her vote will recognise tho sound work that has been done by the National Government in the best interests of all of the community, and vote* for the National candidate—a straightforward, honourable man who will work honestly and conscientiously for the commonweal.