GOVERNMENT REPLY

Evening Post, Volume CXXII, Issue 33, 7 August 1936, Page 5

GOVERNMENT REPLY

MR. SAVAGE SPEAKS

"BETTER THAN CASTOR OIL"

The Prime Minister said that Mr. Coates had spoken about the soothing syrup administered by the Government. That was probably a desirable change from the castor oil periods under the previous Government. Mr. Coates, said Mr. Savage, had referred also to doubtful railway projects. Was he referring to the famous loop, which, he understood, Mr. Coates now wanted to have completed? "When, we took office there was about £6,000,000 involved in lines that had stopped and on which interest payments are going on for ever," said Mr. Savage. "We were not responsible'for that.

"He goes on ,to say that the Government does not care .what happens to industry.

"I am advised that industry is going for its life, and that it cannot fill the orders, in spite of the disaster predicted by my friend.

"Then he said that there was a drain on the Consolidated Fund and reserves. I thought that he had cleaned up all the reserves long before, his term of office had ended. Where there was a threepenny bit lying round he picked it up. . i "Then he wonders why' certain public positions had not been filled, such as the Public Service Commissionership. Why didn't he fill it? He recalled a retired Public Service Commissioner to fill the bill. Why wasn't the position filled instead of a retired Commissioner being brought back? He is blaming us for it now. I think we have made reasonable progress. We came into office eight months ago. The state of affairs then was like the Sahara Desert. We had to start from practically nothing* to get where we are today." A LAPSE OF MEMORY? Mr. Savage said that Mr. Coatcs thought the Government had not filled the Bill so far as pensions were concerned, but he had not mentioned invalidity pensions. Why did he forget that?, The Budget gave pensions to about 20,000 people who had never had pensions before. Mr. Coates had said that the Government was forcing guaranteed prices on the dairy farmer. "For the last 18 months or two years I have been going up and down the country 'talking about what the Minister of Finance has brought into existence," said Mr. Savage. "I have, been telling the farmers what they' have to expect. I told them that they would get nothing less than the average over the last eight or ten years. The prices that have been fixed are a fairly.liberal interpretation of my statement. Mr. Nash has also told the farmers that if there is anything left in the funds to the credit of the industry he will consult representatives of the dairy farmers and see what will be the best thing to do with ■ it. We have definitely outlined a price. In addition we told the dairy farmers I that they will get anything that is left. On top of that we say that mortgages are to be adjusted on the basis of the price outlined. What is there left? It seems to me there isn't anything left. We want to see the dairy farmer get j

- the difference between the price over- ? seas and what it takes to maintain a j decent standard of life for him and l his family. We have taken everything -• into" consideration. The- dairy farmer . is entitled to an equal share in New I Zealand's ' production. I have told 5 them that in guaranteeing the price j we had to lay a foundation; the guarantee to farmers could only be sustained by a guarantee to other sections of the community. I am not going i back on it. I am going right on, with l my colleagues, to carry out the 1 pledges to the farmers and others, a There is no forcing about it. 2 "Mr. Coates and others have overf looked the fact that they are only i discussing one side of the subject when t talking about fixed prices. I think T most dairy farmers have a mortgage, t and we are not only fixing the price, 3 but we are adjusting the mortgage on ' a that basis. I Mr. H. G. Dickie (National, Patea): ' . Please explain that. ■ ' The Prime Minister: It would be im- : , possible to explain it to the hon. ; . member. . < ; Mr. Dickie: That is cheap, coming r from the Prime Minister. ' ' ' MORTGAGE ADJUSTSIENT. ! ( The Prime Minister: The basis for < . readjustment is to be the price the i r farmer will get for his produce. Any- . one who knows anything about land > £t luation must know what that means. The basis of valuation is, generally > speaking, the average of the prices of ] h the last eight or ten years. The objec- ' *- tive is to get a basis that will enable ] a farmer to get a living—the average ' ; man working under average condi- < r tions. That is the "basis of the Valua- ' ■ tion Department's activities, and that 1 •is the basis of the Government's 1 ■ policy. Above all things, what is in ' \ the business goes to the dairy farmer 1 >or the particular industry concerned. 1 ! There may be a period when there is ! a slump in the primary industries, arid 1 [ that might mean a drain on other mll dustries if We want the primary indus- '■ 1 tries to live. We want them to, be- ' ■ cause it is the only way I can see, up ' ; to the present, of meeting our obliga- i i tioris." i Mr. Savage referred to equality of i , distribution. Any gain by one section ' . of the community must be made at the : , expense of another, he said. There ; were, people who thought that all they . had to do was to get a printing machine and pump more money out of 1 ■ it- .vAt a fiiven time there was a cer- 1 ; taut amount of goods and services ' , available, and if one man got more '' than a fair share his friend would have ' to suffer. It was a redistribution of 1 : incomes that was needed. ' PEOPLE'S BUYING POWER. ] _The Prime Minister said that if the ; Government gave money to the people in equal proportions all round, he and others would have passed away long ; before the money problem was solved. What they had to ensure was that the ; people were able to buy to the same '• ; value as they produced. There was 1 not a living soul that could knock that 1 ; down. The Government's policy was ' quite clear to anybody who had given ' | any thought to it. The benefits of ' science and machinery could only come 1 ' to the people by way1 of shorter hours 1 and increases in income that would give the people the wherewithal *to : buy. 1 : "I am not thinking about running a ! printing press," said Mr. Savage. "I ; am not thinking about smashing the financial system. But lam thinking ; about transforming the system so that it will be the servant of mankind ' : rather than the master of mankind." \ The Hon. Sir Alfred Ransom (Na- i tional, Pahiitua): Explain the details ; The Prime Minister: Explain the de- ' tails! I think there won't be much j left out by the time I get through. We 1 have made a substantial beginning on ' ■ the road I have been travelling. We ) have reduced the hours of labour, and 1 we have restored the cuts in salaries i and wages made by burfrieftds oppo- < site. That was a curious way of solv- . ing the depression. The depression in < ; every country was due to the fact that -s we had not sufficient buyers for the 1 things that were being produced. It l was the same in New Zealand a s " in i other countries, but the Government of 1 that day sought to solve the problem i by giving the people still less money 1 with which to buy. That was a curious j way of solving a depression, surely. 1 However, we have altered that. . . i SOCIAL CREDIT. j Mr. Savage said that Mr. .Coates had 5 asked if the Government was going to, 1 go in for some form of social credit. 1 I "Well," he said, "I am not running 1 away from social credit. The whole ( of the money system today is built on j social credit. Without social credit 1 where would we be? We want to use r the public credit all right. We arc j going to build houses for the people 1 by using the public credit. I would 1 like to see the member for Kaipara ] going up and down the country, try- 1 ing to convince people that we j shouldn't do it, and sec how he gets ] on." '.' ■. 'Mr. Coates: I probably will if you * are going to use social credit. ' Mr. Savage: I. will be delighted to accompany my friend. ' Perhaps we \ will be able to ' draw an' audience be- \ tween the-two of .us. I naven't met , anyone who can tell, why we shouldn't , build lines of railways, if we want rail- , ways, or complete public buildings if • we want to. We pledge the public ■ credit in any case, even if we borrow ] in Timbuktu. We ought to be able - to do it here without going abroad." . Mr. Savage said "that if, for Instance, \ the Government wanted to build a , broadcasting station there was no rea- , son why it should not do so on the pub- , lie credit. The State controlled credit today. It had always had the power to do so, but the people in power in ' bygone days left it solely in the hands ' of private banking corporations. The ' present Government was not going to ! do that and it was not going to smash anything. ; < The Prime Minister said that the Government was anxious to enter into ( additional and definite agreements with ■, the Old Country.. England would , want to sell goods as well as buy, and ~ unless New Zealand was prepared to fall into. line. England would not be < very anxious to deal with New Zealand. . MUST BE TAXATION. Referring to the Government's taxa- j tion proposals, the Prime Minister said he knew there t were people who thought the country could be run 1 without taxing anyone. He disagreed j with that. There were certain public services, local and national, that had : , to be paid for, and the community as j a whole had to levy itself to keep them j going. There was no other way to do it .„. ~ .. V- ■ ' .

While the Government was accused of wrecking things, and, while it was accused of driving money out of the country, the deposits exceeded withdrawals in the' Post Office Savings Bank by £436,000 in the month of July. That did not sound much like people sending their money to Australia.

Mr. Coates: They're saving up for the Grand National.

"Perhaps my Right Honourable friend is right. I hadn't thought of that; ,they;re saving up for the Grand National," rejoined the Prime Minister.

The Prime Minister said he would agree with the Opposition in one thing. That was that the Government hadn't done enough. He wished it could have done more in the eight months it had been in office. He would,have been delighted to have made the old age pension 30s at least.

Stating that he would be a prophet for a moment or two, the Prime Minister prophesied that a-jout this time next year the House would be discuss-

ing a national system of superannuation. It would not wait until the end of Parliament's life to do that. He hoped with the assistance of some of the co-opted members and departmental heads to work out a national system of superannuation, including . a health service, that would place everyone'beyond the reach of poverty. He did not want anyone to say that he did not go to the doctor because he could not afford it. ' ' By the exchange of services with each other they could be a happy community in' these southern seas. Who was to stop them? This was not the rock of Gibraltar, but the most fertile country on earth.Referring'to defence, the Prime Minister said he thanked Mr. Coates for his offer to co-operate with the Government, and it would not be overlooked. He wished to assure him that when the Government spent money on defence it would be real defence. Spending: money was one thing- and making provision for defence was another thing. The Government, he added, was in constant touch with the Mother Country on this question. It was on the way' all right, and if members on the Opposition side helped it, he would be delighted to accept their assistance. USEFUL EMPLOYMENT. It was true that the Government had not been able to put all men to useful labour, and it was true that thousands were receiving sustenance who did not receive anything at all when the Government took office. It was the desire of the Government that all men should be usefully employed, and if the members on the Opposition side were prepared to help to that end he would be very glad of it. If it was good to stand together for the defence of one's country, it was equally good to stand together for the building of New Zealand. ' Mr. Savage said he was not going to say that mistakes would not be made. The Government's predecessors made very little else. The Government might easily cutdown taxation and revenue; it could. cut down everything and try to live by taking in each other's washing, but its object was to get thp job done. ' NO STOPPING PLACE. Mr. Savage said the way to solve the unemployment problem was to get the people fitted into industry and services. Why should some men work 50 hours a week while other men were drawing sustenance? He saw no stopping place in the future. If they wanted to stick in a rut, -then there would be a stopping place. He had a vision of the future. . He could see the time when the wool farmer as well as the dairy farmer would not be dependent upon a fluctuating market abroad. He thought the time would rapidly arrive when the people would enjoy the full fruits of their own production, and they would be- able to keep on increasing their output ,to their heart's content. He did not see why any brake should be put on them over the money system. "Yesr let us take the brakes off," he continued. People who were afraid,would not get very far. Mr. Coates had mentioned that the farmer was being compelled to do certain things. That came badly from him. He had had the farmer harnessed to his farm for five years under the Rural Mortgagors .Adjustment Act. He had his standard of life ladled out to him.' Every one in difficulties was invited' to come into that parlour. "I am hoping in the future to see the other side of the picture," continued Mr. Savage. He referred to the Mortgage Readjustment Bill which would help the farmer and give him 'a breathing space without doing an injustice to the mortgagee. The mortgagee's equity would be in his security, and would be based upon the guaranteed price. It was a question of doing justice' to both sides. . .-'.■■. The mortgagee's equity in-a farm or security was based upon butter selling at 117s a cwt. Without a guaranteed price it might be 80s in a fortnight's time. He was not saying that it would be. Experience had shown that prices were always fluctuating. He wanted to stabilise the mortgagor's and the-mortgagee's equity. Homes mortgaged in the towns'and cities had also to be dealt with. Some had been hard in their criticism after hearing only half the story that was disclosed in the Budget. They did not know what was in the adjustment' Bill that was to be brought down.' The Government was handling the position in a businesslike way. Men with business heads were doing the job and the representatives in London were those who were there before and were used to Tooley Street. The farmer was going to get so much per pound for his product, and was to be helped by a readjustment of his mortgage, and- if there' was anything remaining at the end of the season the farmers would be told to send their representatives to the Minister of Marketing to discuss how the Government would help with the balance standing to their credit with the Reserve Bank. STABILISATION. Everything in- the dairy industry in the present case was' going back into tha .dairy industry. The Government was saying to the mortgagor- and the dairy farmer tliat their mortgages would be adjusted un the same, basis. They would say to the mortgagee, "That's your equity; it should never have been any more mv any case." They could not see • how they - could get anything like stabilisation in any other way, and it would be better, for mortgagees and farmers when they got something like, stabilisation. To the wage earners and others he would say, frankly, that they had not come to the end of the way.- Long before this Parliament came to an end there would be a superannuation system that would put them beyond the reach of poverty without the means test.' , • , ■ A reference by Mr. Savage to the case of deserted wives brought forth the question, from Mi-. H. S. S. Kyle (National, Riccarton), ."What about deserted husbands?" • • • ■ . The Prime Minister replied, that he did not know whether they should have a pension out of sympathy. A member:, They are lucky. Mr. Coates: The Rt. Hon. gentleman is quite impartial, in this matter? ■ Mr. Savage: Quite impartial. Concluding, Mr. Savage said, that he regarded the Budget as the greatest Budget 1 in New Zealand's history. The adjournment of the debate was moved by the Leader of the Opposir tion (the Rt. Hon. G. W. Forbes), and the House rose at 9.45 p.m.