HOUSE DEBATES FINANCE BILL

Gisborne Herald, Volume LXVI, Issue 20025, 25 August 1939, Page 11

HOUSE DEBATES FINANCE BILL

SECOND READING

LABOUR POLICY RECORD IN BORROWING MOUNTING TAXATION i OPPOSITION OPITK.'IS.M DEFENCE BY MINISTERS (Por Press Association.) WELLINGTON, this day. Before proceeding with the second reading of the Finance Bill and the Land and Income Tax (Annual) Bill in the House of Representatives yesterday. the acting-Leader, the Hon. P. Fraser, suggested that the discussion on both these measures should be taken concurrently, as many matters in the one affected the provisions of the other. If the Hou.le put through the Finance Bill that night, he said, they would perhaps take the Land and Income Tax (Annual) Bill to-day. There wo.uld be no effort to stop reasonable discussion. He moved for urgency. The Opposition forced the motion to a division, but it was carried by 41 votes to 22. The voting was on purely party lines. Mr. Fraser 'then moved the second reading of the Finance Bill, explain•ing the provisions of the measure in detail.

The Leader of the Opposition, the Hon. Adam Hamilton, said the House was at a disadvantage in discussing the Finance Bill becaue of the absence of both the Minister of Finance, the Hon. W. Nash, and the Prime Minister,, the Rt. Hon. M. J. Savage. The. Government was creating borrowing records, he said, and outlined the Government borrowings from 1935 to 1939. Borrowing was up over £15,000,000 in two years. Where was the Government going to get the money from? Then, he added, there was an increase of £13.500.000 on public works expenditure in three years.

The Government hacl two main sources of revenue, taxation and borrowing. Taxation had been taken to excess, and borrowing was now being taken to ultra excess. If the Government wanted to live extravagantly, then it should tax the people to pay for it. That would be a shock to

the people. ■ The Government, however, had chosen the borrowing method, giving a false idea of prosperity. Attitude to Public Debt “What should be the correct attitude to the public debt of New Zealand be?” he asked. It was clear that a large section of the Labour members looked forward to a debt crisis that would give them the conditions and opportunities for which they were looking. He outlined the gradual building up of the public debt over the last 100 years, and said he could not State too emphatically that a wrong view of the debt question might shake the 'whole foundation of the Dominion’s economy. Our obligations were just obligations. For a country to enjoy all the amenities that our borrowing from the Motherland had made possible and now to allow agitation to be started against debt obligations was, to put it mildly, unconscionable.

Mr. J. Hargest (Nat., Awarua) said one could not help feeling that New Zealand was to-day in the bands of irrespsonsible gamblers controlling the country’s affairs and that the legislation brought down in the last three years was designed to bring about a purely socialistic State. Overseas Credit Problem He criticised the Finance Bill and the public works expenditure, and, speaking of New Zealand’s secondary industries, said that some of the most reputable manufacturers in New Zealand with plenty of money could not get overseas credits. He also criticised the administration of the railways, and said that the load on the taxpayers for railway services was heavier than it had ever Ibeen before.

The Minister of Railways, the Hon. D. G. Sullivan, replying to Mr. Hargest, said he had not boasted about the railway finances, but had merely given information and facts. In pre-

senting the position, Mr. Hargest had taken no account of that tout had set out to discredit the control of the railway system.

Dealing with the purchase of road transport services, the Minister said that huge sums had to be written oft. Having regard to the improvement in the services, and better wages and conditions for the men, the Government considered it had done very well indeed to show any net profit on the undertaking. Mr. Sullivan added that he was sincerely concerned about the manufac-

turing industries and desired to make them a great success, but regarding Mr. Hargest’s criticism concerning the supply of raw materials, the manufacturers knew exactly where they stood and overseas suppliers knew exactly where they stood, too.

Mr. Sullivan said the Opposition had given plenty of gratuitous advice to the workers to increase production, but had not said a word in condemnation of the people who had sent their money overseas, thus dealing a body blow to New Zealand's finances. The Minister said the wheatgrowers and millers generally approved of the Government's wheat, 'bread and flour scheme.

In conclusion, he contended that the Government had done a good job (or the country since it had been returned to office. It had built roads, railways and bridges and had generally put the country into business again after business' had been brought to a standstill by the policy of previous Governments. Intolerance of Criticism Mr. W. P. Endean (Nat., Remuera) said it was regrettable that the Government was intolerant of criticism, as had been demonstrated by the Minister of Railways' criticism of Mr. Hargest.

Mr. Endean proceeded to criticise the railways administration, , stating that the Minister’s claim that the services given by the railways were greater than the revenue received was absolutely fallacious. No private enterprise run on the same basis as tiie railways were being run by the present Government couid hope to exist, lie said, and there was not a line in New Zealand that was paying to-day. The net railway earnings since 193 G had dropped by £300,000, and this was due to the- economic embarrassment created by the Government’s present policy. The Minister of Public Works, the Hon. R: Semple, said .he had been accused of being the greatest spendthrift in the Government. Unless New

Zealand could increase production to provide for an increased population, we would have a very sad future, he said. Public Works Services He outlined the work which the Public Works Department was doing in connection with irrigation throughout the Dominion to enable production to be increased. Tlie Leader of the Opposition had stated that the Minister should be stopped from spending public money. This was most unfair, said Mr. Semple, because every item of the estimates was approved by the House before it could be spent. "I will undertake to prove to any properly-constituted tribunal composed of engineers and accountants that the Opposition charge tha* £24,000,000 per annum is being spent by the Public Works Department is untrue,” said Mr. Semple. “The charge that a portion of the £24,000,000 (£12,000,000) which is being spent by the department is being squandered is incorrect and unfounded,” Mr. Semple added. “I am prepared to prove, in comparison with the methods in use when I assumed office —during the Labour Government’s administration--that (1) there has been a saving to the nation of tens of thousands of pounds; (2) that service has been given, in some cases, in one-third of the time; (3) and that scores of lives have been saved on public works constructional jobs and on the highways. “Millions Squandered”

“On the other hand, I am also prepared to prove that during the past administration of public works millions of pounds of public works money were squandered and lives needlessly lost.” If the Opposition could prove their assertions that millions of pounds had been wasted, he was prepared to resign from public life and forfeit £IOO to the crippled children’s fund, conditionally on the Leader of the Opposition, if he failed to prove the charges, did likewise. He was prepared, if the challenge were accepted, to hand his resignation to the Speaker, with authority that it be accepted and his seat declared vacant if the charges against his department and his administration were substantiated. Mr. A. E. Jull (Nat., Waipawa) said the Minister of Public Works had made quite a good speech. (Opposition laughter.) Fie did not suppose there had ever been a Government in the history of this country which was so thin-skinned.

Mr. Jull suggested that Mr. Semple should be more moderate in his language. He gave the Minister full credit for being one of the most active Ministers who had ever occupied that position and of attempting to save large sums of money in the work of his department. Work Appreciated

He appreciated quite a lot of the work that Mr. Semple had done, but said that the Minister had talked of saving hundreds of thousands by the use of hand machinery compared with hand work. Who would attempt to do that work by hand? he asked. He considered that no one would, so there had been no saving. Mr. J. A, Lee (Lab., Grey Lynn) defended the State housing propi amme, and said that there were inferior houses built by past Governments that had cost more. He did not condemn the houses built in the past because they were needed and the Government of the day had done a good job in providing them, but the Opposition should admit the times rad advanced and the type of house being built was in keeping with the present requirements. Mr. S. G. Holland (Nat., Christchurch North) said that the Government had justified its expenditure because .of the increase in national income. While the income had increased, however, the Government overlooked the fact that it now was falling rapidly and taxation next year must increase still further,.

Mr. A. S. Richards (Lab., Roskill): Where would vou economise? Mr. Holland: Speaking off my own bat, the first thing I would do would be to reduce the size of Parliament. I would also spread the public works expenditure over a longer period than is provided for in this bill. The debate was continued by Mr. Richards and Mr. W. A. Bodkin (Nat., Central Otago! and the prospects at midnight were for a very lengthy sitting.

The debate was continued by members of the Opposition with an occasional speech by a Government member from midnight until 2 a.m.

An outstanding point of the debate at that hour was an amendment by Mr. H. S. S. Kyle (Nat., Riccarton), who moved that the bill be referred back to the Government for further consideration on the grounds that the authorities for borrowing for public works and highways were excessive and that the public finances should be so arranged as to bring the expenditure within such bounds that New Zealand was living within its income.

i’he •>mendment was defeated by 39 to 23 votes.