HOUSE VOTES FOR EXTRA TAXATION

Evening Post, Volume CXV, Issue 33, 9 February 1933, Page 5

HOUSE VOTES FOR EXTRA TAXATION

GOVERNMENT HAS MAJORITY OF FIFTEEN

STRONG OPPOSITION BY LABOUR

LIVELY INCIDENTS IN DEBATE

Strong opposition to the Government's proposals to impose a sales tax and to impose extra taxation on-sugar, petrol, gold ; exports, and tobacco was voiced by the Labour Party in the House of Representatives last night, md the Official Opposition had the support of several Government members. The Labour Party called for the resignation of the Government, urging that the fresh imposts would add to the burden at present being car- :,,: ried by the working class. Opponents of the Customs resolutions giving effect to the taxation proposals kept the debate going until shortly after midnight, when: the Government carried the day by 43: votes to 28. There were some lively scenes during :,the Committee discussion of the resolutions. .

'"It seems to me," said the Leader ofthe Opposition (Mr. H. B. Holland), -"that these resolutions simply indicate that-the Government is determined to .go from bad to Worse. .They are going to'levy additional Customs duties which will;_ mean further; increasing the cost;of'living.to the rank and file,of the. people,:and not only have they done this, but they have included in these resolutions a proposal to levy a sales tax." ; _r.., W. E. Parry (Labour, Auckland Central): They should have included their resignation as well. Mr. Holland declared that tho sales tax should have come down in a sep. arate Billr, The Government was mak't ing the tax one hundred per cent. higher than it was in Australia., He . ventured to say that, the impost would be '■ the highest sales tax in the world. A sales tax. spread over most of the ';.■ working people the responsibility for finding.an immense part of the revenue and saved the wealthier elements from a graduated tax that they ought to pay. "The only decent thing left for .the Government to-do is to get out of . office," declared' Mr. Holland, With emphasis. .... / ■■; : . /There was an outburst ot _ cheering from.the Labour,benches and cries' of: "Put them, out." "Throw them-out." Resign! Resign!" .The Chairman of Committees ,(Mr.S. >■■ G.- Smith) called the Opposition ,to order., and said, he would allow no interjections... .-"',. -.'"■■-• .. Mr. R. Semple (Labour, Wellington East) continued to interject, one of his1 remarks being": They are too cowardly to get out./ Mr.- Smith warned Mr. Semple that he must cease interjecting. /-/, _ '-The Leader of the Opposition said' that surely the Chairman was not going; to prevent expressions of ap- ; proval. -Labour:members: Hear, hear^ We won't be gagged. 'The' Chairman said, the Standing Orders that speakers ; should be .allowed to proceed without interruption: _-. ;'■'. . i ; Resuming his speech, .Mr. Holland remarked on'the increase in the duty on-New Zealand tobacco, and said there should have been a reduction in- , "stead of an increase. '■_" ''"/- INCOME TAX. / / Reverting to the sales tax, Mr. Hol- . land asked if. the Government,had not beenr.able to find a better method: of ■: taxation. He.suggested that an alternative would be a steeply graded income tax. That would ensure the revenue coming out of the; pockets of the people who .could afford it instead of out of the pockets of the people, en the exceedingly small. incomes. In France it had been proved that the revenue from the sales tax exceeded the revenue received from the income tax. Mr. Holland entered another protest against the sales tax being • included; in. ordinary Customs resolutions. The Prime Minister: There is a Bill Coming down. Mr. Holland: I know there is a Bill coming down, but when will it come n down? The, Prime Minister might keep it hanging fire for another month. Mr. Forbes: Oh, no. Mr. Holland: In any case, these resolutions come into effect to-morrow. Tomorrow the' people will begin to pay. The Prime Minister can't hand, back the .duties in ohe event of the Bill not being passed. The Prime Minister knows that, and if he doesn 't, I do. Every member of this House who has any regard for the. well-being of the people of this country must .vote against these resolutions. The Government, if it acts in common decency, will resign and let somebody else take on-the job of running this country. Mr. Holland resumed.his seat to the accompaniment' of a round of applause from the Labour benches. "The Minister of Finance (Mr. Coates)' said' they .were , entitled .to some: alternative from the Labour Party. .Mr. *J. McCombs (Labour, Lyttelton): We have given it. Put the Government out. A. little later Mr. McCombs Taised an objection to Mr. Coates reading his speech, bnt ,this objection was promptly overruled by the Chairman of Committees. „ "VICIOUS LEGISLATION." Mr. McCombs, said that the resolutions Were being moved with the object of securing revenue to recoup the Consolidated Fund as a result of the demand made on it from the raising of the exchange rate. A more vicious piece of class legislation he believed , had. never been attempted in the Par? ' liament of Newl Zealand—taxing the poor to enrich the ' comparatively wealthy. Circumstances had* arisen that emphatically demanded the resignation of the Government. It repre..sented a-serious departure from established taxing principles, and the people as a whole should be consulted. '"I wish ■to protest-as strongly as I can against the plundering of the poor for the enrichment of the rich," he said. The Minister had explained other legislation, that was coming down. Destructive legislation was going to have the strongest opposition of the Labour Party. It seemed that every time trade and industry were recovering, down came the Government with further legislation to damage trade and industry. It was impossible, to look for a revival of trade and industry. FINANCIAL STABILITY. The Prime Minister said that Mr. -McCombs had made a characteristic speech. .*.' Labour members; It was true. Mr..Forbes said that, apart from the -change, the country was faced with it deficit of over £6,000,000. ' Mr. Parry: Have you a graph to ♦how vs' ' - : Mr. Forbes said that the taxation was not for the purpose of bridging the gap made by the exchange. The sales tax would have been necessary •even if the exchange had not been lifted. The tax was absolutely .necessary to keep the finances of the 'country solvent. No one liked the sales tax,, which was certainly unpopular, but the Government could not consider the question of popularity, althdugh the; Opposition delighted' in making political capital out of every action of the Government. The.Chairman of Committees: Order! The -Prime Minister is getting away

from t_ -resolutions before the House. . .Mr. Forbes: I am. replying to charges made against the' Government. The Labour Party was stating that the Government should resign. Labour voices: Heart Hear! Mr. /Forbes: They said that before the election, they said it on the platform, and they said it during the Motueka by-election. Labour voices: We know it is right. .The Chairman of Committees: Order! I will have' to name the hon. member (referring'to Mr. Parry) for disorderly conduct. Mr. Parry: Do iti . Mr. Forbes said the Government had listened: quietly to the speeches from the* Opposition benches and expected that the speeches i- retaliation would be. accepted in ;+;he same spirit. , It' was the responsibility of the, Government to maintain the solvency of-the] country. '■' j -Mr. Semple: You created the position. .- ..-.- / ; .'' ..-; Mr. Forbes said that the Government had an obligation to the civil servants, to the pensioners and othera. The Prime- Minister was _ again called to order and eat down. PRINCIPLES OF TAXATION. ■'/Mr. -P. Fraser (Labour, Wellington Central) protested against the way; in which the sales tax had been introduced.; It had been stated that stocks . would.be cleared if the matter was delayed, but that was hot an answer. The ; sales _ tax was analogous to the land and income tax, and every interest,,should have been consulted and the whole principle discussed before a decision was reached.. The Minister of Finance had stated that the Government would hear/representations, but that was analogous with skinning and , flaying a man and then discussing the technique with him. The tax would press; hardly ijpon those who were now on: the starvation; line, and their flight would be unbearable. Perhaps" they should be glad that chiff, bran, arid barbed wire were exempted, because theyimight be reduced to these.. He challenged members of the Government, to support-the meanest of all taxes which pressed- heaviest on the poorest section of the* eommuhity. Surely it was a fundamental principle of taxation that it should fall on the shoulders of those best able to boar it and should be in.a form, which was difficult to pass on. The sales tax violated :these. principles. The' Prime Minister said,"said that because lhe Government: was: up against it it could resort to, anything, < That .was only, a subterfuge and an excuse. Mr. Semple said that every step the Government was taking was leading to political disaster; the resolutions were the_ final step to a definite and complete political calamity. .The Government should resign and ascertain from the people whether they approved the proposals. "The Minister of Finance smiles, but it is a serious matter," said Mr. Semple. "The people will turn on the Government as sure as the sun shines to-morrow morning," Mr. A. Stuart (Government, Rangitikei): That's what you want. Mr. Semple: And chase tho like of you out of this Chamber. It _was time the Government made a definite- confession that the job was too big for it, continued Mr. Semple. It did not understand, or did;not want to understand, the real solution' of the difficulties. Mr. H.T. Armstrong (Labour, Christehurch East) also criticsed the proposals. The Rev. Clyde Carr (Labour,. Timaru) said that the Government- was intensifying the trouble brought about by its own mistaken policy in the past. "They brought themselves to the brink of the precipice, and now they arel taking a wild leap and carrying every-j body. with, them," he said, GOVERNMENT- OBLIGATIONS. .The Prime Minister, referring to the contention of members* of the Opposition that the spending power of the people. should be increased, said thatl stern facts had to be faced. The Gov- j ernment had obligations to the Public I Service, there wa.s the indebtedness of the country, and obligations to the old, age pensioners; these obligations could, not be met just by saying that the' spending power should be increased. It had to be realised that Jiere were figures which could not be sidestepped. The member for Wellington Central had referred to,a diabolical system of taxation, but he would like to remind him that Mr. Scullin, a good Labour man, had-brought in the sales tax in Australia; and yet Mr. Scullin had all the sympathy .for. the pdor and downtrodden. Mr. Semple: And _ got sacked for doing it. Mr. Forbes: He was a good Labour man.; .:. '.••'. .■,--..', '"■ Mr.. A. S. Kiehards (Labour, Roskill): He never reduced wa.ges. ' The sales tax was in operation in nearly, every country, said the Prime Minister. - . • ' :. . Mr. Semple:; Spreading Ike a disease. Mr. Forbes: We have avoided it in Now Zealand up to the present, and we are: entitled to some appreciation that the tax has been resisted to the time when we were right "up against it." . The Economy. Commission had recommended it twelve months ago, but it had not been put into operation. It was only when the ■ Government was faced with the position that money was needed to meet the country's obligations that' the question of putting on a sales tax had been faced. It had to be realised that since 1929 tho country was £56,000,000 short. Even the Opposition mombers realised that the country had to be kept solid, because suffering would b§ greater if the financial position were to crash. Labour members: Crash? DUTY TO COUNTRY. The Government knew that the measure was unpopular, but there was something more than the seeking of popularity, said Mr. Forbes. There was one's duty to the. country. It was the duty of the Government to do the right thing and let the country decide. Labour members: Yes, decide. Mr. Forbes said that the Government had gone to the electors and had said that it would have to bring in measures likely to be unpopular. Mr. D. G. Sullivan (Labour; Avon) said_that the Prime Minister's own confession was that the Government was unpopular. A democracy had no right

to enforce on the people legislation that the people disapproved of. Many goods in daily use in the home would be. affected. Would the Government members rob the relief workers of the miserable pittance they received today*? • "Is the Prime Minister the rural dictator?" asked Mr. J. A. Lee (Labour, Grey Lynn). "The Prime Minister admits he is the modern Hitler." Was the exchange part of his four-year plan? Were- the Customs resolutions part of the mandate he asked for? "I marvel at the calmness of the satellites of the twin dictators of New Zealand," concluded Mr. Lee. ' Mr. W. Nash (Labour, Hutt) said that it had been stated that the proposals had no relation to the exchange; but the-country would be £3,000,000 short as a result of the exchange and the taxation increases would amount to £2,500,000. The proposals would mean that two-thirds of the revenue would come from the poorer-sections of the people. . A R£____S. Mr. H. S. Kyle (Government, Riccarton) said that the Labour Party had voted for the primage duty. Not a word had been said about the exemption?, Svhich included bread, butter, meat, medicines, milk, and a long list of. other necessaries of life. When the Labour Party had supported the primage duty, the country was not in the serious position it was to-day. Naturally as a Tesult of-the depression the appreciations for pensions had increased. ■*'■_. Mr. Semple: As a result of your poli . • - •'"'.:* ■--.'"• •■"■. '" Mr.- H. G. R. Mason (Labour, Auckland Suburbs) said it was noticeable that newspapers were exempt from the Bales tax. It had been said that the Prime Minister did not mind unpopularity Mr. Semple: He _ a hero. (Laughter.) * ■ • The-Chairman of Committees: I will give the hon. member for Wellington East a last warning. ... He must leave the Chamber if he persists in disturbing the speakers.-* - . Mr. Mason said -hat the Government was evidently keen on maintaining its popularity with the newspapers. Mr. Coates: You can't say that at present. Mr. Mason' said that apparently the Government was trying to soothe the feelings of _he newspapers. • It s was most noticeable that such a large item as newspapers had escaped the clutches of a hungry Government. It was also noticeable that newsprint, was the only class of paper exempted. Mr. C. A. Wilkinson • (Independent, Egmont) said \that the Minister of Finance had apparently overlooked professional men, such. as solicitors, who were exempted from a taxation on their services. (Laughter.) The Government seemed to be going from bad to worse, and if it went to the country at the present time at would be rejected by the electors. It had created throughout the Dominion a feeling of' uncertainty.and unrest. / "CLASS TAXATION.' * Mr. Richards said that the. sales tax was nothing more than class legislation, as it gave assistance to the squatters and the rich farmers at the expense of the poorer sections of the people. It was time that" the Government got out and made- way for sopieone with a progressive policy. ' * ; Mr. H: Holland (Government, Christchurch North), referring-to the duty on gold, said that, gold'miners were in a much better position than they were a'fortnight ago.. The exchange had added- 18s an oz, so gold miners would be. about 6s per oz better off. Nothing could be fairer than the petrol'tax because it spread the burden. Mr. Coates said that the increase in the rate of exchange meant an addition of ,17s an ounce on the export value of gold. Goldhad appreciated 73 points while other industries haa" depreciated 33.poi_ts,,sothat as far as a legitimate contribution •was concerned attention had to be turned to gold. Replying toa question as to whether Customs duties would be based on sterling or on New Zealand currency, Mr. Coates said that they would be based on sterling plus 10 per cent. FORCED TO DIVISION. , The resolutions were agreed to by the Committee by 42 votes to 28, and the second reading was upheld by 43 votes to '28. The division list was as follows:— Ayes (43): Ansell : Linklater Bitchener Lye Bodkin McLeod Broadfoot McSkimming Burnett Macmillan Clinkard • Macpherson Coates . J. N. Massey Cobbe w. \V. Massey Connolly Murdoch de la Perrelle J. A. Nash Dickie Ngata Endean Poison Field Ransom Forbes Reid Hamilton Samuel Hargest ~ Smith Hawke . ■ A. Stuart Healy Sykes H. Holland ~ Te Tomo Holyoake ~. Williams Jull Young Kyle , Noes (28): 'Armstrong Munro Atmore W. NasE Barnard, ' ' O 'Brien _ Carr Parry Chapman Richards Coleman Rush Worth Fraser Savage H. E. Holland Schramm Howard .. Semple Jones Stallworthy Langstone Sullivan Lee Tirikatene McCombs , Veitch Mason Wright