STATE ADVANCES BILL.

Hauraki Plains Gazette, Volume XXXIV, Issue 4599, 10 September 1923, Page 4

STATE ADVANCES BILL.

SPEECH BY MR. POLAND. Mr Poland, member for Ohinemui'i, spoke in the House on July 19 ow the above as follows :■ — "Sir, the last speaker quoted the ca«e of a young man who marries on a wage of £3, or at the most £3 5s per week, and a ; t the end of three monUjhs had such ambitious ideas that he wanted a house for his family—looking well ahead of him, I presume—at a cost of £1250. I hope that that case is typical of the optimism of thousands of young men in this country. I do not want to deal wi'tjh the fact that this man mentioned by the honourable member married on £3 5s per week. If he did he deserves i medal, and also better pay, and I trust there are thousands more young men in this country who will follow in his footsteps, and that the Government will assist them in their very laudable desire to provide homes. I suppose no one can fail to congratulate the Government upon the. advance made in the legislation which is now before us. The Minister of Agriculture said that this is a democratic measure. Of course ft is a democratic measure, it was brought in by the Liberal Government in 1894, and since then it has been considerably amended on many occasions. Tonight we are dealing with a further amendment of it by the present Government, which amendment will certainly put it into the forefron't, of legislation of this nature. I do hot intend .to deal! with the advances-to-workers portion of the Bill, because that has been very fully dealt with, and dealt with by men who know more about; the needs of working men in the cities in regard to housing t,han I can possibly pretend to know. The Government recognise the needs . of the workers, and they are proposing tp advance up to 95 per cent, of the total cost of the house and section to a maximum amount, of £1250. That is an advance on the present 75 per cent.; but I agree with those members who say that the housing legislation of 1919 was more favourable to the worker than the present law. The honourable member who spoke last, and who said that this is tjhe most generous legislation ever introduced in any part of the world, cannot remember the legislation of 1919He was not here, but he should surely know .that had the legislation of 1919 been carried into effect, and administered sympathetically, we should certainly have had the finest legislation in any part of the world for providing homes for workers. The legislation now proposed is not equal to the legislation under the Workers’ Dwellings Act by. which a man had only to find a £lO note. That was long before the legislation of 1919 was brought in, which was simply an improvement on it,he Workers’ Dwellnigs Act brought in, by the Hon. Mr Millar about 1910. All that has been forgotten. Now, here we are to-night lauding the Government for the fact that they have increased the total amount t,o be loaned to a settler to £3500.' But I would point cut that in 1894, when this legislation was first brought into this House, the provision was for £2OOO ; two years later, in 1896, it was increased to £3OOO ; and it remained at £3OOO until the year 1913, when the preserft, Government reduced it to £2OOO again. And ;t has remained at £2OOO or less until to-day. We are now ortly proposing to increase the total sum to be lent to a farmer to £5OOl more than it was in 1896, and we know what the value •f a farm in 1896 was as compared with the value to-day. So that today we are not giving-the same generous provision to a farmer that was given twenty-seven years ago. Then, Sir, with regard to the rate of interest : 4% pei- cent, has since 1894 been the rate of interest charged in tjiis country under this Act, and up to the years 1912 from 60' per cent, to 70 per cent, of all the loans obtained, through the Advances to Settlers Department was obtained to pay off a mortgage, and those mortgages were paid off with money borrowed at the rate of per cent. Last year we passed an amending Act giving the Government power to charge 5% per cent, on money borrowed from the State Advances Department, to pay off a mortgage. Now, the position is this : that the Advances Department is encouraging the borrowing of money to pay off mortgages because they are getting an additional 1 per cent, from the borrower. They are getting 5% per cent, instead of 4%l per cent., and they are anxious to get applications for loans on encumbered lands. So that from that point of view the State Advances is improving its profits by charging a much higher rate of interest; than has been' charged in the past, and the effect is not going to be as beneficial to the borrower. One of the finest features in; connection with the Act was that ilt kept down the ruling rate of interest. It is now increasing it by 1 per cent.,, and under the Chattels Act passed last year we are charging a farmer who has need of money to buy stock or purchase farm implements, 7 per cent., reducible by % per cent, if he pays his interest promptly. And in order to get that money at 6% per cent,, he must repay the principal as well in five years’ time. That is not only in this Bill, but in the statement the Prime Minister made when he announced that he proposed to increase the total amount pf money available under this Department, for the whole of its different purposes co £20,000,000. To-day it is about £15,000,000, and it is proposed to gradually increase it to £20,000,000. That will only give us, as already stated, some £5,000,000 for advances to meet the requirements of the whole of the settlers,, the whole of the workers, and the whole of the local bodies, and all the farmers who require to borrow under the Chattels provisions. Think of it, Sir. £5,000,000 ; when t,he farmers and the landowners of this country have mortgages aggregating oyer £2001,000,000' this Government proposes to do away with the necessity of an agricultural bank, to do away with the necessity of any other borrowing institutions, by simply increasing the amount available from

this Department by another £5,000,000. It js absolutely absurd to think that either the housing requirements of the people, pr the requirements of the set,tiers of the country, whether it be on encumbered lajnds or first mortgage, or under the chattel security, are going to be met by a paltry £5,000,000, and it shows one clearly that the Government do not realise the requirements or necessities of the farmers,, or the need for increased production. Then let us deal with this question of the percentage to be loaned. The Prime Minister says that it is perfectly safe to lend—he is quite satisfied to lend —the worker 95 per cent, of the money required to buy a section and build a house on it. But he says it is not safe to lend to the farmer that much. If a worker wants £1260 to buy a section and build a house the Government will lend him £llB7 10s. But if the farmer wants the same amount of money to purchase a farm* the Government will only lend him £937 10s,, It says to him; “You are not to be trusted to the same extent as the workers; you can only get 75 per cent., but with the worker it is quite safe to give him 95 per cent.” Why is the farmer to have only 75 per cent, lent out t> him ? Why not lend him 95 per cent- ? It is true, and every reasonable man must consider it so, that the security of a farm purchased at Government valuation under which the farmer Is paying not only his interest every six months but repaying the principal he has borrowed also every six months, is a better security than the house built at £lOOO and the section worth £lOO, because the security in the house is deteriorating from the moment you build; but in the case of the farm, if you have a man of character and a worker, the value increases. And under this provision for lending the Minister of Finance has told us 'the character of the applicant is going to be an important factor. Then if you have a ipan of character who goes on a farm and starts to work his farm and improve it, you have him improving the value of the security and reducing the loan, but in the case of the house the value of the security is deteriorating the whple of. the time, ’though the loan is being reduced also. So I ask the Government before this Bill goes through to nut the farmer on as good a footing as the worker, and to say to any man who is taking up a farm and whose character is right, who is able to put up 5 per cent., and who has to satisfy the Advances Department through the Board of the Department +,hat he is a reputable man and likely to succeed on the farm with financial assistance,, that he shall be put in the same position as the worker under the Act. That is a reasonable thing to ask. When the Chattels Act of last; year was before us the Prime Minister told us that the valuers give first consideration to the character of the man who is making the application, and that ‘s quite right, because the greatest part of the value of the chattel security is the character of the individual. A valuer cannot always judge of that, but, in a great many instances it ca’a be judged by the local valuers who know .the man and make it their business to find out what his character is. If you have a good man and a good worker on the land I consider he is more entitled to consideration than even the ordinary worker is because, after all the talk about the of the worker, surely the ordinary farm-, er of this country is as hard a worker as is to be found in any walk of life. The men who are working our farms are the greatest workers in the country ; everyone admits that. The man on the wharf will admit; it freely. He will admit that he does not work one ha’f so hard as the man who works his dairy farm or any small farm. The man who has a dairy or an agricultural farm works not less than from ten to sixteen hours a day, and his wife and children work also. Every day in the year they are working and they are producing, and it is these people who are producing 90 per cent, of the whole production of this country who want help, and they are the class of people who deserve assistance. We have men working bn shares on dairy farms and they want’ homes for themselves on good terms where they can bring up their children and become independent, and these are people who are entitled t,o get assistance from the State. In the case of men of that class I say the Government should be satisfied to advance the whple 100 per cent., and as these men will be regularly paying their interest and gradually paying off the principal as the years go by the whole investment yvill be on a good basis and perfectly safe. Under the Land Settlement Act the Government find £97 15s of every £lOO of vakie, and if a man takes up Crown land he lias only to find £2 101 s of every £lOO of capital vallue. Take the Act, passed in 1910 called the Land Settlement Finance Act. The Prime Minister laid on the table yesterday a report with regard to the working of this Act. I have not yet had the opportunity of scanning that paper, but I will undertake t,o say that not one of those- settlements was a failure. The Right Hon. Mr Massey.—Yes. Mr Poland. —Well, we shall see. I know of several in my own district and in the Waikato, and I do not know of one failure. The Right Hon, Mr Massey.—l had a deputation to-day asking that they be placed under the Land for Settlements Act. Mr Poland. —That may be in the South Island, perhaps. I know of a large number in the Waikato district, and every one has been a great success. Under the Land Settlement Finance Act a farmer who took up land put down 4 per cent, of the capital value, and the Government found 96 per, cent, of the money, The present Government, when itj came into power, killed that Act, and it is inoperative at the present moment. Under that Act it,he land had to be valued by the Government Land Purchase Board, and the price had to be agreed upon by the purchaser. The Purchase Board had to be satisfied that the applicant was a man of char* acter, a man likely to make a success pf a farm, and I know of no. instance

where those settlements have been a failure. Well, if (that could be done by the provision of 4 per cent under our present valuation system, I am sure there is no danger at all under this Act in lending 95 per cent., because under the system of land valuation of the last few years the valuer has not taken into account; any of the inflated vailues put on land. They have been most conservative, and I commend them for it, but I say that under that conservative system of valuation the Government are perfectly safe in lending bona fide reputable men 95 per cent, of ithe cost of the faints. In that way we would not only make thousands of farmers independent of the money-lender, but increase the production of the country, which is what we all want; to see. I again ask the Prime Minister to consider whether he is not able tp allow these men up to 95 per cent, of the valuation, and let the farmers have the same right as is given under the Bill to workers.