DOMINION WAR EXPENSES BILL

Gisborne Herald, Volume LXVI, Issue 20054, 28 September 1939, Page 14

DOMINION WAR EXPENSES BILL

HOUSE DEBATE TAXATION PLANS DEFENCE BY MINISTER EQUITABLE APPLICATION OPPOSITION INSISTENT ALL POSSIBLE ECONOMY (Per Press Association.) WELLINGTON, this day. In moving the second reading of the War Expenses Bill in the House of Representatives yesterday, the Minister of Finance, the Hon. W. Nash, gave a number of examples of the effect which the 15 per cent increase in income tax for war purposes provided for in the bill would have. Companies having a taxable income of £IOOO, he said, would have to face an increase of £2O, and a company with a taxable income of £50,000 would pay an increase amounting to £29GB. As tar as Increases paid by individuals were concerned, he said, a man with a taxable income of £7900 would pay an increase of £SOB, and a man with £IOO taxable income would have to pay an increase of £1 11s 3d. A married man with two children with an assessable income of £7900 would have to find an increase of £419. The increase in these scales ot payment, he said, were equitable, applying to everyone according to their ability to meet the extra demands made on the country through the outbreak of war. The Leader ot the Opposition, the Hon. Adam Hamilton, drew attention to the steady increases in income taxation which had taken place from time to time, and urged the Minister ot Marketing to say how he was proceeding with the arrangements tor the sale and purchase of the Dominion’s produce. Mr. Nash: I shall be glad to do so, but the negotiations will take time. Costs in Last War Mr. Hamilton said it would be as well for the Minister to give the producers as much information as possible concerning the expenses and financing of the war. He referred to the financing of the last v/ear, stating that the cost to the country had been' somewhere in the vicinity of £15,000,000 or £16,000,000 annually. It had not been a cheap war, he said, and about 100,000 New Zealanders had gone overseas.

The Minister of Finance had some £75,000,000 already voted for his use this financial year, said Mr. Hamilton, and with careful management it might be expected that the Government would at least have been able to get through the present year without increasing* taxation. The taxpayers would very likely willingly pay it if they were satisfied that the Minister was being careful with his other expenditure. However, the country’s financial resources were already depleted through the Government’s policy, and we were entering the war with our coffers by no means full.

Public Works Outlay

He suggested that there should be a reduction in public works expenditure, especially in non-interest bearing works. The Minister of Public Works, the Hon. R. Semple, should be able to save at least £5,000,000 lo £10,000,000 in this direction, and if he reduced his expenditure from 15 to 20 per cent the Opposition would support him. Mr. Hamilton also suggested that there should be a review ot the rates of pay under awards. Men on farms were being paid 11s a day and those going into camp 7s. It was only right that a man getting 25s a day should come under review.

The Rt. Hon. G. W. Forbes (Nat., Hurunui) supported Mr. Hamilton’s contention that there should 'be a substantial reduction in public works expenditure, and he urged the Government to do everything possible to convince the country that it was prepared to do its part in the prosecution of the war. Without that evidence the Government could not expect the whole-hearted co-operation and enthusiasm so necessary to carry out the job. No one would wish that sufficient money would not be raised to enable New Zealand to play her part worthily. There might be differences of opinion as to how the money should be raised, but on general principle he thought the people would be prepared to sacrifice a great deal, to assist the Government in doing the job as they wished it to be done. • Possible Deflation

Mr. A. H. Nordmeyer (Lab., Oamaru) contended that additional taxation and rigid curtailment of expenditure might cause deflation, which in the long run might cause more harm than controlled inflation. Generally speaking, he said the Government’s proposals had been well received and after some of the extravagant rumours as to what might happen probably, a sight of relief spread over the country at the comparatively small burden imposed on the community. When the House resumed in the evening, the acting-Prime Minister, the Hon. P. Fraser, in the course of a brief statement, asked for urgency for the passing of the War Expenses Bill and also the Customs Act Amendment Bill.

He explained that he did not propose to keep the House to a very late hour last night, but wished to proceed as far as possible with the two bills, otherwise it might mean a very much later sitting to-morrow. Remainder of Session Mr. Hamilton asked if Mr. Fraser would give the House an indication

of the Government’s programme of business for the remainder of the session.

Mr. Fraser: I undertake to give that at 2.30 o’clock to-morrow.

Mr. Hamilton: If the Minister gives that undertaking and also states he will not keep us too late, I see no reason for objecting to urgency.

Urgency was granted and the House proceeded with the second reading debate on the War Expenses Bill. Mr. W. A. Bodkin (Nat., Central Otago) said it was correct to say that no one could state definitely what demands would be made during the war, and consequently the Government should make all economies possible, If the Government created the impression that it was dissipating the resources of the country it would frighten investors. He asked Mr. Nash to. include in the bill a clause to exempt from its provisions the estates of soldiers who might fall in the present war. Dr. D. G, McMillan (Lab., Dunedin West) suggested that the _ public should be given an opportunity to subscribe to an interest-free loan for war purposes. We had a large number of wealthy people, he said, whom he felt satisfied would welcome the opportunity to show their patriotism by subscribing to such a loan. He was satisfied the Minister of Finance would get sevei'al million pounds if he were to adopt this suggestion.

Lack of Leadership

Mr. S. G. Holland (Nat, Christchurch North) complained that so far during the progress of this war there had been an entire absence of leadership by the Government, to which the country was entitled. He alleged that soldiers in uniform were being' sneered at in the streets of Wellington and other of the Dominion, and even returned soldiers were receiving white feathers. It should be an offence for this to be done. He himself had received one, although he had served m the last war and had also volunteered for service in the present conflict. Mr. J. A. Lee (Lab., Grey Lynn) said he realised that we would not solve our problems by bringing everyone's income down to 7s a day. Such was the stupidity of our financial system, he continued, that during the last war, apart from the huge wastage of life, the people of Great Britain actually enjoyed a higher standard of living than ever before, but after the war came deflation. We should end this war -without debt, he said, so that we could avoid similar deflation which had caused so much misery and want, not only among the civilian populations, but also among returned soldiers themselves. .

Mr. J. Hargest (Nat., Awarua) said that in the last War we had made the mistake of sending overseas such a large expeditionary force. The danger df sending away too many men was that production was affected, and also that the men. who were sent overseas were often too young and could not stand up to the strain. These men became most expensive soldiers.

He appealed to the Government to see that it obtained value for the money it spent on uniforms, boots, etc., and allowed no exploitation in this direction.

Special Force Equipment

The Minister of Defence, the Hon. F. Jones, said that the Standards Institute was taking an active part in seeing that the uniforms came up to the specification, and he felt sure that our men would have well-fitting, smart uniforms. Detailing the expenditure on the equipment of the Special Force which wa's at present being recruited, the Minister stated that the first eschelon of 6000 men would be a charge on this financial year for a period of six

months. The second, of 5000 men, would be a charge for four months, and the third, also of 5000 men, for two months. Altogether 12,000 men had to be provided with uniforms at a cost of £lO per man. The remainder would have territorial equipment. The total pay would foe £1,575,000.

The Minister next dealt with the activities of the air force, stating that at the recent Pacific defence conference, New Zealand had agreed to provide 650 pilots and 650 air gunners, observers and other ranks every year. The war had caugh't the country in the midst of its preparation to carry out this plan. Work had to be considerably speeded up at New Plymouth, Taiefii and other aerodromes throughout the Dominion. The cost of mobilisation of the Territorial Air Force; he said, was £75,000. The purchase of civil planes for the training of personnel cost £125,000, and increases in the regular air force cost £150,000. Altogether the total cost would be £'1,050,000. The Minister added that he felt sure New Zealand would foe able to redeem the promise it had made to the United Kingdom, so far as the air force was concerned.

He also referred to the establishment o : f a man-power committee consisting of representatives o ; f several interested departments which controlled recruiting and decided which essential industries must be carried on and which men in key positions should be retained in their jobs. This committee reported to the Defence Council and the Government. Members of the House, he concluded, would appreciate that although the Government had asked for a fairly big sum, it could account for everything it had spent and was carefully watching every penny. The House was still sitting at midnight. The debate was continued by Messrs. If. E. Combs (Laib., Wellington Suburbs), C. A. Wilkinson (Fad., ■Egtmont), A. N. Grigg (Nat., Mid-Can-terbury), the Rt. Hon. J. G. Coates (Na't., Kaipara), and the Minister of 'Finance replied at 1 a.m. The second reading of. the bill was then put through the committee stages and read a third time, and the House rose at 1.30 a.m.