PARLIAMENT

Evening Star, Issue 22143, 25 September 1935, Page 7

PARLIAMENT

budget debate continued THE BANKS AND EXCHANGE MR RUSHWORTH CURIOUS [Pen United Press Association.] WELLINGTON, September 24. The House met at 2.30 p.m. Mr Te Tomo was granted four days’ leave of absence on account of urgent public business. Six days’ leave was granted Mr Tirikatene on account of urgent public business, four days to the Rev. Clyde Carr on account of illness in his family. The financial debate was resumed by Mr Richards, who said the advent of the. Democrat Party was undoubtedly designed to keep the Labour Party off the Treasury benches at the end of the year.

Mr Ruslnvorth said that, according to the Budget, the national debt increased by £646,000. but it was a question whether that was a full and complete statement. When the exchange was raised the Government was persuaded that it was necessary to indemnify the trading banks against the loss they would sustain, if the trading banks were making a loss of 25 per cent., was not the Reserve Bank making a similar loss, to say nothing of the deficit it took over? If that was the case, why was it not necessary for the Government to indemnify the Reserve Bank ? There was a mystery there, and if it meant that there was an outstanding liability from the Government to the Reserve Bank, reference should have been made to it. _ If there was not an outstanding liability, reference should havo been made to the fact that a very mysterious change had taken place, in that *be > Reserve Bank was able to carry out its transactions without any loss, whereas the trading banka made a loss. If the Reserve Bank did not make n loss, then it was questionable if the trading banks made a loss, and, if they did not, any claims they made under the Indemnity Act were in a sense fraudulent claims. He thought the House and country were entitled to a little more information.

Another point, said Mr Rushworth, related to the war debt. Until some throe years ago provision had to be made for £BOO.OOO for interest. What was the position to-day? Had the British Government wiped off its portion of the war debt entirely, or was it only suspended? Was the Dominion still liable for it, and was it mounting up? Some reference to it should have been made in tlie Budget. He went on to deal with credit and currency. He contended that control of the present monetary system was inefficient. He said the British bankers in 1914 inflated the currency and robbed all creditors, but after the war instituted a policy of deflation and robbed all the debtors, as the result of which great destitution had been wrought, and the persons who did that were still in charge of the monetary system. The only remedy, he held, was to have a monetary system scientifically constructed so that R reflected the real wealth which was being New Zealand’s monetary policy, he alleged, was imposed by the Bank of England, and it was imposed through medium of the sterling Bank of England. Mr Rushworth said that the Bank of England largely influenced the policy of the British Government. ■

Mr O’Brien said most of the things m the Budget were merely camouflage. Everything was shown in its best form. Nothing to the detriment of the Government was shown. The Opposition objected to such window dressing. There was another side to the picture. The Budget said there were 9,000 more employees in the factories, but the report of the Department of Labour slvowed that there were still 10,000 fewer employed compared with 1931-32, and there was an increasing tendency on the part of factories to employ cheap girl labour. The youth of New Zealand were gradually being pushed out by cheap girl labour. Then, too, when girls and boys reached an age when they should receive an increase of wages they were put off, and younger , ones engaged. They found that the young men of the Dominion were becoming unskilled labourers. Ho regretted that the old age and other 1 pensions were not restored to their original level, and that the Government was still retaining some 2J- per cent, of the reduction. He was also sorry that no provision was made for invalidity pensions. He contended that the farmer would receive little benefit from the farm mortgage legislation passed last session. The interest rates varied from £7 7s lOd for a 20-year term to about £4 14s for

a 50-year term The farmer would receive a benefit only if he took the 50year term, so that they would have mortgage-in-perpetuity. He contended that the State Advances Department would have handled the situation much better than a semi-private corporation. He urged the Government to abolish the 12s 6d gold tax. That amount often meant the difference between the loss and profit of mining companies. Mr O’Brien- went on to refer to Mr Coates’s long range public works jirogramme. He suggested that the Westland Main South road should be considered.

Mr Coates: It is very prominent in the programme now under consideration.

Mr O’Brien said be was very pleased to hear it, as that area had been without a road quite long enough, as there was a large area of valuble land which could be opened up in that locality, Mr Coates: You have a good . air service there now. Mr O’Brien: Yes, but we can’t take the cows nip by air. Mr Clinkard defended the gold tax, which, he said, was levied when exchange was raised, and when gold was already realising a high price. He stressed the importance of the tourist traffic and urged its development in every possible way. He contended that the inauguration of an American shipping line had greatly benefited the tourist traffic, and suggested that the curative properties of Rotorua Sanatorium should be made more widely known. He thought an attempt should be made to classify the unemployed and give first-class men the best that could be given. The present system tended to bring all men down to the lowest level. Mr Clinkard contended that it was the 50 per cent, cut in the price of exports, and not the 10 per cent, cut in wages that caused the large increase in unemployment, and he said the country people would not be caught by Labour’s promises. Mr Howard asked who was satisfied with the Budget? Mr Kyle: The old-age pensioners arc. Mr Howard: No; I understand the old-age pensioners are coming as a deputation this week. Ho continued that the Civil servants were riot satisfied, either. 'When were the conditions of relief workers going to be improved? The works at 12s a day were to be piece-work jobs, and none of them would receive 12s a day. He urged the Minister to make the oldage pension increase retrospective to April 1. Mr Kyle contended that Labour would not be able to carry out its promises if it got into power. There was far greater confidence to-day than there was five years ago. This was due largely to the way the present Government had carried cut its policy. > The position was improving, and he did not - think the Minister of Finance had . received sufficient credit-for the way he had handled tho situation. He was of opinion that the Civil servants were quite satisfied with the Budget, and contended that the increase of 7$ per cent, from October 1 was much better than 5 per cent, retrospective to April 1. Referring to the competition between American and New Zealand shipping, he asked why people did not boycott the American vessels? If that were done that company would not run away with as much as it was running away with. He thought the matter should be looked into right away, to see if a better position could not be reached. He contended that greater assistance should be given veterinary surgeons in the Dominion. The country required veterinary officers, and they could not qualify in New Zealand. He was hopeful that assistance would be given to likely young men to go to Australia to qualify, because there were positions available for them in New Zealand.

Mr Langstone said .the Budget was not a true statement of the way New Zealand was standing to-day. Fortyone thousand of the 80,000 farmers had had to go to their creditors. That

affected £90,000,000 worth of mortgages. He referred to wage reduction and the effect it had on the country. He criticised the Unemployment. Board’s policy, especially -for subsidising the building of premises for wealthy companies, and compelling poorly-paid girls to_ pay unemployment tax on meals received during their work. He predicted that after the election the Government Party would not have 20 representatives in the House. The debate was adjourned, and the House rose at 11.55 p.m.