FOUR YEARS HEAVY SPENDING

Evening Star, Issue 23383, 28 September 1939, Page 15

FOUR YEARS HEAVY SPENDING

STARTING WAR HANDICAPPED WORKS GUT OF 20 PER CENT. , URGED AND SOME REVIEW OF AWARDS [From Oue Parliamentary Reporter.] WELLINGTON,. September 27. New Zealand, according to the Leader of the Opposition, is starting its war effort financially handicapped by the heavy spending policy of the Government and its high internal commitments. Discussing the War Expenses Bill in the House, Mr Hamilton asked why the Government was not prepared .to give a complete picture of all its legislative proposals, as it was difficult to discuss them piecemeal. For instance, there was a Reserve Bank Amendment to come, which might be far-reaching and debatable. He suggested that the Minister of Marketing should state how far New Zealand had proceeded with the sale of its produce to the United Kingdom. Mr Nash; That will take a little time, hut I shall be glad to give the information as soon as I hear something. Mr Hamilton commented that this was a big thing, affecting the wellbeing of the whole Dominion, and it would be wise to consult the producers quite openly so that they would feel quite satisfied that they were fairly treated. One was hearing many rumours about the method of handling the produce and about the freezing works which were apt to be disturbing. He had looked up the war expenditure of 1914-1918, which totalled £BO.000,000. There were accumulated surpluses which brought the net total to about £60,000,000. Thus it could be said that the average annual cost was £16,000,000. “ It was not a cheap war,” continued Mr Hamilton, “ because wo sent 100,000 men overseas, and it is a question whether we have to enter into such large commitments this time.” What the Opposition thought would have to be done, continued Mr Hamilton, was that, with £75,000,000 available on the normal Budget, the Minister would have something up his sleeve to at least get through the remainder of the financial year without increased taxation. Already the taxpayers had been called on for. £2,500,000 more than last year,- and now the Minister was asking for- further taxation which on an annual basis was £3.726,000, making the increase this year £6,266,000. Anti the taxpayer would willingly pay this provided he was satisfied it would be carefully expended.

. “ There are some weaknesses in the Government proposals,” said Mr Hamilton, " because its financial resources are already partly depleted. The Government’s management of finance in the last four years has caused our resources to be fairly strained. We are entering the war not with the coffers full and taxable capacity at full and plenty of reserves. We had been spending fairly freely and committing ourselves to added expenditure internally, so that we are starting off the war fairly well handicapped financially. Our Reserve Bank, which was almost at 100. per cent, reserve strength .when the Government’took office, now carries a Government overdraft of £23,000,000 or £24,000,000, and on top of that a fair amount of capital has left New Zealand.

Mr Nash: Your party caused a lot of it to go. Mr Hamilton retorted that most was outside capital temporarily domiciled in New Zealand, but a good many millions had gone away. Reserves had been used up, and also departmental balances and ready cash mopped up. He could not complain that the country was not prosperous, but the taxable capacity of the people was not so sound as it ought to be. Proceeding to make definite suggestions, Mr Hamilton declared that public works expenditure ought to be curtailed by £5,000,000 to £10,000,000, though it was a petty political business to ask members to nominate what they would cut out. If the Minister would reduce public works expenditure from 10 to 20 per cent, the Opposition would support him and take the out with everyone else. It was the Minister’s job to decide what were the most urgent works. Many men on Public Works would be needed for the primary and secondary industries.' The Government would not be doing its duty if it failed to place them in these spheres. Various awards should come under review.

Men worked on farms at 11s a day and men went into camp at 7s, which, with allowances, was about 11s. Thus the two most essential classes were getting about the same. “If that is fair,” added Mr Hamilton, “ some other costs should come under review. We should discuss the 40-hour week, which is not universal, especially on the farms.”

Mr Langstone: Why this attack on the workers? Mr Hamilton: Why put men into camp at 7s a day? Is there any particular hardship in other people making their contribution? If the military men and the farmers get 11s a day, is it right that others should get 255? This should come under review.

Mr Speaker suggested that the general conditions of national life were outside the scope of the Bill.

Mr Hamilton remarked that it was difficult to avoid discussing these aspects. New Zealand’s war effort, ho continued, might be increased if the ships were loaded quicker. It cost £4OO a day to keep a ship in port, and sometimes it took six weeks in New Zealand ports before they could be turned around. If half this time were taken it would be a great saving of shipping. He urged that there should be a general national effort. Members of Parliament were not particularly highly paid, but none would complain of an added load provided the sacrifice was general and fair.