THE FINANCIAL DEBATE

Dominion, Volume 13, Issue 266, 4 August 1920, Page 8

THE FINANCIAL DEBATE

MR. WILFORD LEADS ATTACK MR. NOSWORTHY REPLIES TO CHARGES THE COUNTRY'S DETRACTORS. The Financial Debato in the House of Representatives was opened last evening by Mr. T. M. Wilford, who spoke in the steud of the Leader of the Opposition (the Hon. W., D. i>. Mac Dona.d), absent owing to ill-health. Mr. WILI'UKD said that the present was a, lime when men should speak with a sense of responsibility as to what its effect might bo on tho social and economic affairs of the community. The Budget to him was a disappointing one, in that it contained ,nothine to sustain hope in tho rank and file of the people of alleviation of tho conditions under which they now lived. It betrayed lack of vision. There was a cry now for raoro production, but more production would avail nothing unless somo provision were madeifor the better marketing of our surplus produce. Nothing of the sort was in the Budget. So' ako with regard to shipping. No hope was held out to the farmer of help against the time when control of shipping would be no longer kept, and the country would be at the mercy of the shipping rings. Ho regretted that nothing was being done, to develop trado with the Ameriqan con-' tinent, including South America. He believed that the United States and Canada would take a great deal of our frozen meat and wool. Speaking of American trado generally, he deprecated the prejudice that existed against America on account of the nlleged boast of the Americans that they had won the war. Ho had the best of evidence that th-s was not the opinion of the enlitrhtened American people.; Ho (Mr. Wilford}. talked about Amerjcan for some minutes. Financas of the Country,

He proceeded! to speak of the financial condition, of the country, saying that would contrast it with that of the Mother Country. Our debt per head was little short of while that of the Mother Country was but .£157. II was true that much of our debt :was directly productive ai\d interest bearing. Tho indebtedness of Great Britain was exactly half of the national wealth, and tho interest charge was iCSOO.OOO.OOO per year. There was a flood of. paper money in the country, with the inevi'.nble results of a depreciated currency and inflated prices of commodities. We must therefore be absolutely self-reliant, must find our. own money for our own public works, as it was impossiblo for us to borrow from a country probably unable to pay for her own requirements. New Zealand's private wealth, not nil of it immediately available, was .M00.000'.000, just double the amount of our gross National Debt. The question for the country was whether the Government, should go on borrowing or should consider some schome of making a levy on wealth. He referred to arguments for the capi'al levy used by British statesmen in England, quoting some of the proposals made. Ho did not see any reason why men holding largo amounts in war loans should not hand over to the Stnto one-tenth of their holdings free of interest for a. period of years.. At,five per cent, compound interest money doubled itself in fourteen years, and by this means (of suspension of interest on a portion of the debt) the National Debt could be decreased. . ■ taxation. He urged the Government to increase the graduated tax' on large estates, on large incomes, and said they should increase also the death duties on large estates. Tho great difference between the Liberal Party and the Reform Party was-that the Liberal Party, believed in tho increase of graduated taxation on large estates and on large incomes, and in the increase of death duties, wheroas the Reform Party did not. It was quite true that the Government could not put: through a Tariff Reform: Bill this year, but it might liavo been possible if the Parliament had been called together in .February. Mr. Massey; It would have been worse then. An hon. member: He was in America then. f Mr. Wilford said that the Government w<Juld have got a better rate of interest on loans at that time also. As ito.-the Government plan of raising four millions 'a year by increased -postal *ftnd railway revenue, he thought it the greatest failure of constructive statesmanship lie had ever known, or otherwise it was <lue to unwillingness on the part of the Government to tap those other sources of revenue—large estates, large incomes, and death; duties. Ho criticised the Government for its policy in regard to sugar. He would not hear of the argument that New Zealand must pay a high price for sugar because other countries were paying these high prices. Mr. Massey: I could sell it all at two millions profit! Mr. Wilford would not accept that this even justified tho high price. His suggestion never very clearly made, seemed to be that by some means or other, some long time ago, New Zealand should have bought enough sugar to keep the country going for years. He said that the Government had declared that it would never introduce a State bank.

Mr. Massey: I am not foolish enough for that. , .

Mr. Wilford said' that tho banks were the biggest trusts in tfce country. New Zealand was dragged at the tail of tho Bank of New Zealand. He was curious to seo the legislation being promoted by the Bank of New Zealand. Was it proposed to water, the stock? Ho advocated the establishment of a State' bank, and said some more hard things about the ,New Zealand banks. ' Mr. Massey: They ffive ns ' cheaper money than they get m Australia from tho State Bank there.

Mr, Wilford spoke of "the Prime Minister's Navy, the Chatham," and he condemned -the scheme altogether. Tho naval defence New Zealand wanted in the future must consist of "submarine!* and aeroplane spotters." He doubted whether it would be possible to man the Chatham. In Ms last minutes he spoke of industrial insurance, electrification of railways, and water power.

MR, NOSWORTHY REPLIES

THE TASKS OF THE GOVERNMENT.

The Hon. W.. NOSWOETHY, Minister of Agriculture, was the next speaker, lie regretted the- absence of the Leader of the Opposition. The Deputy-Leader, who hud just Kit down, had accused the Government of want or vision. Thar, was .1 guestion of point of view. Mr. Wilford had ma/Io various suggestions, hut he had touched very lightly indeed on the responsibilities thax faced the Government. It was not time that the Ministcrs had neglected the shipping question. They had already arranged for representatives of the shipping companies to meet a committee of the House, fhey had arranged ior shipments of produce ;o North ,ind South America, and they were appointing trade agents as required. AVhen Mr. Wilford urged that Now Zealand meat should he sent to the United States, was'ho aware that nearly all tlie railway transport in that country was controlled by the Meat Trust? Then Mr. Wilford had talked of "lnllated currency." The simple fact was that behind ovcry pound note in circulation m New Zealand was a jioldon sovereign. J ho member surely was not ignorant of lliflf faolf. A levy on wealth w ft proposal that had been rejected by the best iinancial brains of the Empire. ■""> fr"?: ornment, in any case, had not hesitated to raiso compulsory loans for war purposes, and it was proposing to continue tho system. Taxation was very Heavy indeed in New Zealand. Tho policy of the Liberals, it seomed, was to increase the land tax, the income tax, and the death duties. A study oj the taxation actually in force would con vince most people that to proceed tar | along the lines proposed by Mr. Wilford . would bo to reach tho breaking-point. Tho criticism of tho Government's sugar deal was based sjirtply on ignorance of tho facts. Now Zeahuid did not ktow sugar. It had to buy it in competition with other countries, and it had bought at a price aotuaJlr lower than other countries were prepared to pay. The bargain waa a good ono. '

| Burden of Taxation. | Tho Government recognised that the I, incidence of taxation was capable of improvement and had indicated in the 33uilKct that it would make proposals in that direction. Mr. Nosworthy referred to the onornious increase in the product of direct taxation in recent years, and said he believed tho limit had been nearly approached. Tho taxes on the totalisator and amusements probacy would bear increasing but critics of the Government should recognise that the taxation per head of the population had been trebled since 19U and stoo'd'now' at something like .615 per'head. A part' of the expenditure of the Government recently had taken the form of subsidies on wheat and butter. He disapproved of this arrangement. The time had come to say that people, must pay the value of tho articles they bought. Production was essential to the prosperity of New Zealand, and the proper basis of local prjees as well as of export prices was the market value A member: Famine prices for a producing country. Mr Nosworthy added that subsidies served merely to confuse the public nof. 01 ??, 1 ?.-. rhe country had tremendous liabilities, and all the energy and forethought of the Government was required to meet them. Not Enough Money.

The honourable gentleman had spoken about the public debt. Tho debt had risen from ninety-nine millions before the war to some two hundred million pounds at present, but the net debt was really .£1M,000,000, still further reducible by taking account of the-capital vaine of railways, of settlement land and other items. Much of the interest was payable to people in our own country, About twenty millions had been spent on the repatriation of 6oldiers. There was ,a cry from all over the country for public works, and especially for 'hydro-elec-tric works. If all requests were to be granted there must be a huso addition to the public debt. The Government would havo to go reasonably slowly, but tho Government had no thought of'doing' nothing. All possible resources would he used for the development of the country. Mr. Wilford had spoken of "lack of vision,-" hut lack of money/Was a more serious obstnclc. Money could not be obtained, and he would 'not support any wild schemes, which might send the country along the road to ruin,