BUDGET DEBATEOPENED

Dominion, Volume 15, Issue 40, 10 November 1921, Page 6

BUDGET DEBATEOPENED

MR. WILFORD’S CRITICISMS AMENDMENT MOVED THE MINISTERIAL REPLY The debate on the Financial Statement was opened in the House of Representatives last night with the speech of the Leader of the Opposition (Mr. T. M. Wilford). Mr. AVilford, at the outset, announced his intention of moving the following amendment to the motion to go into Committee of Supply:— In the opinion of this House, tho absence of any policy in the Financial Statement,, together with the lack of appreciation of the industrial necessities of the Dominion displayed by the tariff proposals, proclaim the Government to bo without any adequate realisation or conception of the needs of the present day. ■‘POLICY OF CONCEALMENT.” The motion was directed against the Government, especially in view of the fact that thee Budget in no way disclosed the policy of the Government, Mr. Wilford explained. Members had frequently been asked before the presentation of the Budget to wait for that document to see what the policy was. One would describe the policy of' the Government as one of concealment. The policy of the Prime Minister was not to advertise his proposals in advance. The Budget gave no hint of intentions, but merelydisclosed that the Prime Minister expected a deficit on the year’s working of d 11.266,367. Mr. Massey: That is not so. Mr. Wilford: The revenue is estimated at £28,000,000 and the expenditure at £29,266,367. and if the right hon. gentleman will deduct the one amount from the other he will find the difference is £1,266,367. , , Mr. Massey: That is not in the Budget. It is qualified by another statement, and you ought to admit it. New Zealand, Mr. AVilford continued, must keep its expenditure within its revenue. If there were no savings at the end of ono year, there could not be a capital to start the next year with. The Government had some .£2,000,000 deposited in London as a reserve earning not more than five per cent., while it was borrowing £5,060,000 at a rate of interest which came out roughly at £6 9s. 6d. per cent. Tho Government, was bankrupt in constructive statesmanship. Tho Prime Minister had over-estimated the revenue from stamp duties and from beer duty. To put prices up to a prohibitive figure by taxation killed the revenue-producing power of tho articles taxed. Mr. Wilford complained of tho heavy duty placed on tobacco. The reason "for it. he said, was that the Prime Minister and the Hon. Mr. Lee themselves did not smoke. Ho regarded the duty as outrageous. Mr. Massey: What about personalities now ? '* The Leader of the Opposition proceeded to suggest that the Prime Minister had over-estimated tho return from land and income tax, and also from Customs. The railways of tho country appeared to be drifting into a bad way. Would the interest charges in future be taken into account, as they ought to be, in statements showing tho position of the Railway Department ? “PUBLIC SERVICE COMMISSIONER SHOULD GO.” s There was an unwarrantable increase in the cost of the Public Service Commissioner’s staff. Tho cost of salaries, leaving on one side the Commissioner s salary, had risen from £1’066 to £7440, the staff having been increased from 11 to 26. Tho cost of salaries of employees under tho Public Service Commissioner had jumped since 1913 from £874,711 to £1,966,722. Of the latter amount, it was only fair to say, .£286,470 was due to cost of living increases. Since 191 S-19 the number of' employees in the Public Health Department, had risen from 89 to 182, and the cdst of salaries. from £18,983 to £56,807; and 1918-19 was the epidemic year, when one might presume the Department would not be un-der-staffed. In the Tourist Department also there had been a notable increase in staffing and salaries. The complaint applied generally to the Departments under the Public Service Commissioner s control, and tho time had come, he thought, to do away with the cost of ' administration by tho Public Service Commissioner. He did not know whether it was a fair expenditure or not, but tho cost of the Forestry Department yas £13,382 for the first year. The country was almost back to pre-war income. It had millions to find on account of unavoidable expenditure. Something like £1(10,600,000 had been added to the national debt since 1914. This sum ho wished to use as an argument for extreme caution and a policy of genuine economy to restore public confidence. The war debt and the interest on it must be paid. Pensions also must bo kept up, and must be increased in some cases when an increase Was possible. THE FARMER’S POSITION. If there was one taxed class, that could not pass on its taxation, that was the farming class. Therefore, the farming community must be given real consideration. What consideration had it been given? What was going on in the marketing of New Zealand produce was inimical to the interests of the producers. Were tho producers getting a fair deal at the freezing companies’ end? If the statement recently made by Mr. A. D. McLeod, M.P., was correct, the big man was getting the big prices from tho freezing companies, and tho small farmer was having to take a lower price; and by that method the freezing companies averaged up their earnings during the finanCMT year. Mr. Wilford proceeded to quote a letter written to the Press by Mr. McLeod, and Mr. McLeod protested that Mr. ’ AVilford was misrepresenting his meaning. Mr. Massey: Mr. McLeod was saying what others had said. Mr. AVilford spoke of the crushing burden of company taxation. It had to be lightened, he said, if sufficient money was to bo provided for tho carrying on of business. Tho Primo Minister claimed savings. He would like to have details. Tho Government Departments were inc-easing expenditure at the rate of .£3,861.000 per annum. Mr. Massey. AVliat nonsense! More proof was required that savings 'had been effected, Mr. AVilford added. Mr. Massey: A’on’ll get it. Mr. AVilford contended that Mr. Massey had promised the country a ten per cent, reduction in income tax. Mr. Massey had said: “What we propose to do IT we can manage it —(Mr. Massey: Hear, hear!) —is to reduce the income tax by ten per cent.” AVhat was required to-day, Mr. AVilford went on, was not lower wages, but higher efficiency; arid if efficiency could be improveu there would be little need for talk from the Government about reduction of salaries. UNEMPLOYMENT. The unemployed problem was being glossed over. The Prime Minister bad said that “he cculd not go into details, but the Government, had the matter in hand.” Later he had said to the Farmers' Union deputation that he had seen there would be unemployment, and had made financial provision to meet I it, so that any single man could obtain employment at 10s. a day, and any

married man at I2s. "I would like to know.” said Mr. Wilford, “what provision was made.” Mr. Wilford finally moved his amendment, which was seconded by Mr. T. K. Sidey (Dunedin South). Mr. A. D.McLeod wished to make a personal explanation—evidently with regard to Mr. Wilford’s interpretation of Lis Teller—but he was informed that he would have an opportunity of speaking later. MR. PARR IN REPLY THE POLICY OF THE GOVERNMENT The Hon. C. J. Parr (Minister of Education) said that the amendmenttmoved by the Leader of the Opposition suggested that there was no policy in the Budget. The honourable gentlemen had addressed himself with considerable force to this complaint. A glance at the Budget would show that the accusation was rvithout foundation. The document contained policy on very many important points. Had the Leader of the Opposition forgotten the new tariff, the Highways Bill, the Motor Vehicles Bill, the settlement of the Urewera Country, the adjustment of taxation, the scheme of retrenchment in the Public Service, and a score of other matters that were mentioned in the Budget? Had the Leader of the Liberal Party been asl«p? The member had told the House that there would be a deficit at the end of the current year. But he had not mentioned that the estimated deficit would be far more than covered by the cash balance of over £i, 900,000 carried forward on March 31 last. The use of tho balance carried'forward from one year to adjust the accounts of the following year was a normal business procedure. Mr. Wilford had accused the Minister of Finance of overThe estimate was that Customs duties in the current year. The estimate was that Customs would produce about .£4,900,000, as against over .£8,000,000 last year. As a matter of fact more than half cf the amount estimated had already been collected, and there was good' reason for believing that tho estimate would bo exceeded by March 31 next. DEPARTMENTAL EXPENDITURE. Turning to the question of departmental expenditure, the Minister said that the Health Department had taken over the medical, nursing, and dental services from the Education Department, and had taken over certain inspecting duties for which the local bodies paid. '1 hese changes, which were shown in the Budget, explained most of the increase in the staff of the Health Department. Yet the Leader of the Opposition had quoted the increase as proof of the extravagance of the Government. This was an illustration of tho way in which he had manufactured his criticism of the Government. Mr. Parr referred to the financial difficulties created by the fall in the prices of produce, the reduction of exports, and the unexpected excess of imports. The Government had been faced with tho necessity of bringing its expenditure within its revenue. The Primo Minister had explained that savings to the amount of 312,000,000 a year had been mads already. An Economy Committee, consisting of five heads of Departments, had been set up, and had carefully and thoroughly examined every Department with a view to economics. This committee had prepared a report which stated that savings to the extent of 3)4.000,000 could be effected. Some of the fixed charges, such as interest and pensions, could not. be reduced, but the savings he had indicated would bring the expenditure of the State within the income. The Minister proceeded to say that items which might be regarded as extravagant did not date merely from 1914. The expenditure of the Government had been increasing over a long series of prosperous years, at least twenty years. Items had been added here and increased there X ar by year, and it was not reasonable to suggest that all the savings had 1 to be effected in the items of expenditure dating from recent years. Much of the increased cost of running the railways was due to tho increased cost of coal. The cost of repairs and equipment had increased enormously. Moro than half of the increased cost of the Department was due to advances in wages. The position was much the same in the Post and Telegraph Department. The expenditure of the Education Department had increased by 331,400,000 since 1914, but most of the extra money was due to tho., payment of increased salaries to teacheirs and the training of a larger number of young teachers. THE GOVERNMENT’S DUTY. After mentioning the tariff, Mr. Parr said that there were few countries in the world where the wage-earner and the man with the small income paid less taxation. The Government realised that in these times tho people who were earning 334 to 316 a week had a struggle to live. It realised also that the incidence of taxation required an adjustment. That adjustment was to be made. In conclusion, the Minister said that the Government intended to live within its income. Economies were being made every week. Each proposal had to be considered, in order that efficiency might be maintained. But 'he had no doubt that if the difficulties were faced in the' spirit of optjmism cb’cacterstc. of the Prme Minister, the Dominion would emerge successfully from all its difficulties. Tho debate was adjourned on the motion of Mr. R. McCallum (Wairau) and the House rose at 9.20 p.m. AN ILL-FATED MEASURE MOURNED BY LABOUR MEMBERS. The Hotel and Restaurant and Private Hotel and Boardinghouse Employees’ Six Days a Week Bill came back from the Labour Bills Committee of the House vesterday with nothing left but 'the “short title,” which, as a member observed, was rather long. Mr. P. Fraser (Wellington Central) said the Bill aimed at passing into law concessions that the union had already won from the Court. The union had thought it would be more satisfactory to have the matter of hours settled once for all. so that there should bo no need for renewed applications to the Court on tho subject. The Houso would have tho Bill before it again next session, when he hoped it would receive better treatment than it'had done on this occasion. Tho House should have been given the opportunity of dealing with the Bill in Committee, Mr. H. E. Holland (Buller) contended. The committee had decided, in effect, that the Bill, embodying the wishes of a Labour organisation, should not be seriously considered by the House. SETTLEMENT OF GUM LANDS “How much of tho 170,000 acres of gum land reserve which was thrown open for settlement seven years ago has been taken up?” Mr. P. Fraser (Wellington Central) inquired of the Minister of Lands. . The Hon. Mr. Guthrie replied: “The honourable member no doubt refers to areas of 71,164 acres which the Kauri Gum Commission of 1914 recommended should be withdrawn from reservation. Much of this area, although set aside asi kauri gum reserves, had been found not to contain gum, and is not very suitable for settlement. Of the areas withdrawn from reservation, about 63,000 acres, some 5000 acres have been taken up on settlement conditions. Probably a large part of the'remainder can be utilised for afforestation purposes, for which it is well adapted.” LAND TaFrEBATI) The Land Tax Amendment Bill, which provides for a rebate of ten per cent, for tho prompt payment of the tax, was put through all stages by the Legislative Council yesterday. < ,