BUDGET DEBATE

Hokitika Guardian, 15 July 1926, Page 4

BUDGET DEBATE

OPENED .1?V Mil HOLLAED. WELLING TOE, July 13. In the Hone of Representatives this evening the debate on the Financial Statement was opened by Mr Holland, | eiuler of the Opposition, who advocated shortening the matter in the Budget, as in summary form it was much more readily comprehended. The Budget was more remarkable in what it did not contain that for what was in it. Someone had called it a “mark-time Budget,” and he thought that was the most appropriate description. We had debts, some of which had come to us from the war, and some prior to the war. which had to he met and could only he met by taxation. That taxation should be placed oil the shoulders best aide to bear it', and he did not thing this had been done, either by the present Government or its predecessors. He then proceeded to discuss the public debt, which on March 31st. last was shown at £238,855,,478. Apart from the war debt this liability had increased during the last fourteen years by £0!),40!).981, which was the Reform Party’s contribution to the public indebtedness. on which interest and sinking fund charges now constituted heavy annual charges. He next attacked the free income tax debentures, which he described as the most pernicious system ever introduced into our finance. This was costing us sonic .C1,723,(500 in interest annually and he said the House was entitled to the fullest information concerning the position oT these debentures. At the present time we were not balancing our Budget. and lie wanted to know what Alinisters proposed to do about it. Mr Lvsnar: What would you do

about it? Mr Holland said lie was not in a position to do anything about it, hut he wanted to know whether the Government was going in for a wholesale policy of borrowing. So far as borrowing for public works was concerned he stressed the necessity of the works undertaken being of economic value, and thought.the House should tie told what works now in hand had not been of such, value. He next criticised the gift of a battleship to the British Navy, contending that it was done under had finance. It would have been better had the Government, of tliat day made a. levy on the rich people of the Dominion and paid for the ship in that way rather than borrowing from Britain to give Britain a. present. Coming to tax reductions, lie declared that taxable, incomes had, since 192122. increased by nearly £28.000.000, while taxation had been reduced by 12J millions, and not n small farmer in the country got the slightest "benefit from, those remissions. Individual benefits to “big men” were not enumerated. hut “small men” were assisted to no more than a few shillings, if they got any benefit at all. Last year £150,000 taxation was remitted, and twenty-eight taxpayers 'took £07,228 of this benefit, showing clearly that all through these-remissions they Were designed to help the wealthy classes. So far as relief to soldier settlers was concerned lie'did not object. We were only giving them hack what we owed them. The trouble was that rich landowners had got off with what the soldier settlers ought- never have been called upon to pay. In all probability these writings down of two millions and a half would not be the last. The Government could not say they would be, and most of this money had gone into the ‘ pockets of rich landowners. The patriotism of some of the people was k;j, . great that when, they got'a chance to unload their land they sold the poorest to soldiers and kept the best for themselves. He thought the report of the Rural Credits Commission would be valuable. In this connection, lie pointed out that the Bank of New Zealand was now promising to do wluit- it, a short time ago. said the .State could not do. When the Rural Credits Commission's report came down, would the Legislature follow, or would it not?. He saw no signs of the Government festering secondary industries. These industries should lia such as were suited to the conditions of the country. If such industries required a protective tariff, they should have it, but lie maintained that so long as our tariff produced revenue it was not protective. He dwelt upon the limber industry, preserved fruits industry and others, which ho said, were suffering from outside compctiton. We now were importing goods to the value of seven millions and a half, the*hulk of which could he produced in New Zealand with reasonable protection. If motor-cars and motor-lorries were used by the rich only, then they might fairly he subjected to heavy taxation, but these vehicles were used by all classes. They were .used largely in industries and heavy taxation on thorn simply raised the cost of commodities, and, as a result, the cost of living. We could raise within the Dominion all the wheat we required, yet we were from, one to two million bushels short, all because the industry was not properly organised. The finance of th<? Government as disclosed in the Budget was not satisfactory, and in due course further criticism of it would follow from the Labour benches. MINISTER. IN REPLY. ° The Hon W. No.sworthv said the best reply to .Mr Holland’s criticism was that the Government had the endorsement of the people behind it at the election. Since then there had been .another emlorsemnt in the success of the last loan. One hundred and niiiteen millions of British capital was offered to find one six-million loan. No better certificate of confidence could l.e given than this endorsement of London financiers. AD Holland had talked about the borrowing policy of the Government, blit by how much would the public debt of the country be increased if the policy of the Labour Party was carried out? He trembled to think what the consequences would be. Coming to taxation, he maintained that the burden was not inequitably distributed, and he asked Afr Holland how he would make up the deficiency of the exempted small taxpayers Would be make a capital levy ? 1 ho exemptions now made by the Government were so great that an increase of these on lines demanded by Arc Holland would mean that scarcely anyone at all would pay taxes. The Budget fully explained the modus operandi by which the public debt was to l>e repaid .and this was a more effective method than previously had obtained, and it since had been adopted by Britain, which must -lie credited with some knowledge of finance. He defended the present Customs tariff, contending that ther were no duties on foodstuffs except those necessary to protect our own industries. The Labour Party evidently did lint know wberv. they stood on the question of oroteetion and free trade. On these subjects they hedged, but went all out for nationalisation, and goodness only knows where that would lead us. At the rate we were going in the matter of importation of motor cars, he sometimes thought it would have been a good tiling if a few years ago wo had decided to shut them out altogether. The hulk of our public debt was due to the war, much of it reproductive. He wanted to know if too much of that class of money had been borrowed, and he challenged the Opposition to say

what public works should he stopped. It would he folly to stop our hydroelectric devlopment and other forms of public improvements. These must he completed to get tne benefit of them. When that was done we could taper in our public works policy, but our hydro-electric schemes were going to lie highly profitable, and it was because London financiers knew we were investing our money profitably that they were so eager to lend to us. Ihe principle r*f meat and dairy control was defended. He denied that Reform stole the idea from the Labour Party. It was evolved out of the brains of Reform. It must be remembered that they were progressive, not the old-fash-ioned Tory Party. The aftermath of the war left them with many problems, and the Government had done its best to face and solve the difficulties. He was satisfied they were right in enabling producers to market their products in the way most agreeable to themselves. He stressed the importance of consolidating the Empire by inter-imperial trade. This might mean a tariff barrier against all other nations and free trade within our Empire. This would not help the secondary industries, but that was not so important as increasing protection and export. One primary industries required a big population before they could thrive, aiid it u*as just a question whether people would not ho better off if we had no duty at all on hoots, and those engaged in that industry were otherwise employed. Air Forlies moved the adjournincni of the debate, and the House rose.