LABOUR BACKS GOVERNMENT

Sun (Auckland), Volume III, Issue 807, 30 October 1929, Page 6

LABOUR BACKS GOVERNMENT

House Ratifies Extra Levy PROMISE OF EARLY RELIEF Food and Fertiliser to be Exempted THE SUN'S Parliamentary Reporter PARLIAMENT BLDGS., IV May. WITH Labour openly on the side of the Government and willing to vote the Bill through, the Reform Party fought a hopeless battle today against the Customs Amendment Bill, which provides for the imposition of an additional one percent. primage duty. From the start it was inevitable that the Bill would go through, but Reform staged another forlorn hope, though not of the same dimensions as its campaign against the Taxation Bill last week. The Opposition amendment was defeated by 43 votes to 23, and the Bill was put through all stages. The Rt. Hon. J. G. Coates, Leader of the Opposition, took the first step in the offensive in moving his amendment that taxation apply to luxury goods only, and roused the Leader of the Labour Party, Mr. IT. E. Holland, to attack him fiercely on Reform’s attitude to taxation in the past: Reform then went hard for Mr. Holland, claiming that Labour was fulfilling its part of the bargain by which the United Party taxed the farmers. Although the debate was dull as a whole, party rivalry and recriminations gave it spice now and then.

The Bill was introduced this afternoon by Governor-General’s Message, and the Minister of Customs, the Hon. W. B. Taverner, took it under his wing. The two per cent, duty is to apply only until March 31 next on foodstuffs and other groceries and fertilisers, according to the Bill. After that one per cent, duty Vill be reverted to. On other articles, the termination of which will be prescribed by Order-in-Couneil, the two per cent, duty will remain for an indefinite period. In addition to confirming' the formal resolution passed by the House on August 1 increasing the rate to two per cent, the Bill contains the usual saving provisions regarding trade treaties with South Africa. When the Bill was Introduced the Leader of the Opposition, Mr. Coates, asked the acting-Leader of the House, the Hon. G. W. Forbes, when the second reading would take place. Mr. Forbes replied that it was proposed to put the Bill through all stages that day. He wanted to get the business through, and did not want to prolong the session unduly. Mr. Coates said that he . did not care whether the House was coming to the end of the session or not, if the Opposition felt that the legislation was not in the interests of the country, it would stay till Christmas if necessary. The Opposition hoped, as in the past, however, to extend the same courtesy, good nature and tolerance to the Government. Mr. E. J. Howard (Christchurch South): Whatsoever. (Laughter.) .. Mr. Coates said that courtesy and tolerance would be extended even to the Labour Party. Mr. Forbes said that he proposed to go straight through with the. legislation. All the Government proposed to do was to bring down members’ business for them. Mr. J. A. Nash (Palmerston): Is there much to do? Mr. Forbes: Not an undue amount considering the state of the session. Mr. Nash asked if there were any transport legislation, but the chairman of committees, Mr. S. G. Smith, ruled him out of order on the ground ol irrelevancy. Mr. W. Downie Stewart (Dunedin West) asked how the Customs figures were to date, as a quotation of these might have some bearing on the merits of the primage proposal. The chairman ruled him out of order as referring to the finances of the country, but Mr. Stewart thought that for the benefit of the House and the speed of passage of the Bill a statement should be made. He also asked whether the Bill would be a temporary measure. INFORMATION SOUGHT Mr. H. E. Holland, Leader of the Labour Party, wanted the Minister of Customs to explain the Government’s proposals, but wanted him to make a statement at a time when his remarks could go verbatim into Hansard, instead of in committee. Newspaper reports of such important statements as the Minister would make would not be adequate for the information of members. Mr. D. Jones (Mid Canterbury) supported Mr. Stewart in his request, and there followed an argument between him and the chairman, Mr. Jones finally being ordered to sit down protesting. Mr. Coates immediately rose to a point of order, saying that the chair-' man’s ruling was not in accordance with practice. The question was a very important one and affected the finances of the country. He suggested that Mr. Speaker’s ruling should be obtained, either that or the chairman should rule to his suggestion and the Minister could make a statement. The Minister’s remarks could go into Hansard at this stage. The Minister of Justice, the Hon. T. M. Wilford, agreed with Mr. Jones and Mr. Coates in their contention. There had always been a right for any member to ask questions of a Minister on the introduction 'of a Finance Bill. They were allowed to ask questions, but not to make speeches. Whether | the Minister replied or not was another matter, as there was no standing order providing for that. He could delay his replies to questions till the second reading, and then have his remarks recorded and satisfy everybody. Mr. Coates was supported by Mr. J. A. Young (Hamilton). Mr. Smith claimed that members had misunderstood his ruling, which was that there should be no general discussion on finance. He had no wish to infringe the rights of members. Mr. Jones then asked for a statement from the Minister again, and suggested that the second reading debate should start at so that the Minister could have a chance to get the necessary information and give it to the House. The statement would assist the Opposition and Minister, so that the session might be sliorti ened. If the information was not

in the possession of the Reform Party it might assume that it was not necessary to impose the tax. Mr. Forbes said that one thing the Government* intended to do was to put business through in reasonable time, but not to bustle anyone. The Minister would give figures for the six months’ period. He did not know whether tl\p figured relating to general finances would 'be available, and he would have to consult the Minister of Finance on that. He had no objection to starting at 7.30 on the second reading. PRIME MINISTER’S STATEMENT After proceedings in committee had been reported to the House, Mr. Forbes made the following statement on behalf of the Prime Minister (the Right Hon. Sir Joseph Ward): —- “In his speech in the Financial Statement debate, the Prime Minister, referring to the proposal in the Budget to impose on all imported goods an additional primage duty of 1 per cent., stated that he hoped the proposed increase of duty would be of a temporary nature, and that when the financial position permitted, the former rate of primage duty would be restored. After careful consideration, the Prime Minister desires to state—and in this decision the Cabinet has concurred —that in regard to foodstuffs and other groceries which are enumerated in schedules to the Bill, and also in respect of fertilisers, the extra primage duty will terminate at the end of the present financial year. “With respect to other goods, power is being taken in the Bill to terminate the extra duty if and when the financial position justifies such a step. The Prime Minister hopes that these concessions will be appreciated by the House and the people generally, and particularly by the farming community, insofar as the concession relates to fertilisers.” Exception was taken by Mr. A. M, Samuel (Thames) to the fact that the Prime Minister had said that the Bill would last only to the end of the present financial year, but it would last indefinitely. The concessions so called would not be regarded with favour by those concerned. REVIEW OF ESTIMATES The Minister of Customs, Mr. Taverner, said that the amount of the primage duty was estimated at £300,000, and the anticipated total Customs revenue was £5,450,000. He then read the following report from the Comptroller of Customs, Mr. George Craig:—• “The chief items of revenue are spirits, tobacco, cigars and cigarettes, and motor vehicles. The revenue so far received on spirits, during the present financial year, has been greater than that collected during the corresponding period of the year 1928-29. This was expected owing to the lower clearances during the latter year on account of the abnormal quantities entered for home consumption prior to_ the introduction of the tariff in 1927. As a matter of fact the duty collected on spirits during the period mentioned is less than that received during 1926 (the last normal year). This bears out the view that the consumption of spirits is gradually decreasing. "There has been slight decrease in duty collected on tobacco, cigars and cigarettes. This is due to the increased local manufacture of tobacco at a lower rate of duty, rather than to decreased consumption. “With respect to motor vehicles considerably more vehicles were imported during the first six months of the pi esent year than in the corresponding period of 1928. It seems evident, and inquiries which have been made verify the opinion that importations during the remainder of the year will be considerably less than during the same period of the last financial year. With respect to other goods it is remarkable that increased importations consisted largely of free items such as manures and raw materials. • "Importers and banking and other ■ financial authorities who have been consulted are not optimistic as to the likelihood of increased importations during the remainder of the year This is attributed to probable lower prices this year for some of the farm products and to the increase i'n the bank rate in England and slackness in trade in New Zealand.” Mr. Taverner said that it was anticipated that with the primage duty customs would be down £250 000 at the end of the year. The Bill was then read the first time and deferred for second reading till AN EMERGENCY MEASURE Mr. Taverner was the first to speak m the evening, and after quoting the Budget remarks of Sir Joseph Ward lie said that the legislation was necessary to give statutory confirmation to the resolution passed. The first primage duty had been imposed in the Finance Act, 1915, and had been in-

cluded in the Customs Act, 1921. so that it had been in force 14 years. Mr. Taverner therefore felt bound to remind members who opposed the Bill that they had, during their period in Office, plenty of time to repeal the duty. The first imposition was an emergency measure, and the same argument held good today. The Government had to find some means of getting revenue. Mr. F. Langstone (Waimarino): j Why not tax insurance companies? Mr. Taverner did not wish it to be inferred that the avenues for raising money were not explored, but it had been found that the primage duty was the simplest, easiest and most reasonable method. It was not a question of squeezing the last shilling out of those providing revenue, but the Government desired to ease the position from March 31 next. In response to requests from members, he would give the following information:—Customs revenue in 1925-29 was £7,954,232 and the revenue estimated this year in the Budget was £5,400,000, but the estimate of the Comptroller of Customs was £5,450,000. These figures were approximations. On the other hand, it was "very necessary for financial purposes to cover that figure and not drop below the estimate. There was no question of budgeting for a surplus. He then gave the six months’ figures, saying that in 1929 the revenue for the first six months was £4,391,345 and for the corresponding period of 1928-29 £3,792,530, a net increase of £598,515. He might say that the figures were subject to a slight correction, as they were those of the Customs Department and not of the Audit Department. Regarding the imports mentioned in the Comptroller-General’s memorandum, Mr. Taverner said that one large item was motor-cars, and for the first half of last year imports totalled 7,000, while for the corresponding period this year the number was 15,000. The country could not absorb a like number in the last half of this year, and that was where one part of the revenue would drop. It was expected that £50,000 only of the Increase over 1928 for the first six months would be retained at the end of the year. Mr. Taverner stressed the point that goods .already on the free list would not be subject to provisions of the present Bill. THIS YEAR’S REVENUE Summarising the position, the Minister said the total revenue which would be collected this year, if the revenue foi* the last six months was equal to the revenue for the, similar period last year, would be £8,552,747. The Minister said he had subtracted £IOO,OOO from that amount to allow for the anticipated falling-off in duty derived from motor vehicles, leaving the estimated total for the current year the £8,452,000. Mr. Coates aroused satirical laughter front the Government and Labour Benches by claiming that the Opposition was to be thanked for the concessions made in the Bill. Ml'. W. E. Parry (Auckland Central) : You don’t know what’s in. Mr. J. S. Fletcher (Grey Lynn): Don’t you kid yourself? Amid interruption Mr. Coates taunted Labour about its Order-in-Council principles, and said that it was voting for a Bill providing for that. He appreciated the efforts of the Government to accede to the requests of the Opposition. Mr. Parry: You’re not in the know. Mr. Parry continued to interject, amid laughter and noise, until Mr. Speaker threatened to name him. ' Mr. Coates continued that he thought the Government deserved a measure of criticism for the casual manner in which it had placed the Bill before the House. A clear statement of six months’ figures was expected first, and he was not hazarding anything on saying that Mr. Taverner had had the figures for the last few days for that was the practice in the past. The Government should have made clear to the counti-y the necessity for an increase in the primage duty or any other form of Customs tax. ' Mr. Taverner had referred to former acts and had endeavoured to justify his policy in that claim, but that was one of the weakest arguments ever put up. Pie would have been on sound ground if he had said that the increase in taxation was necessary to balance the Budget. He might also have usefully referred to the high cost of Government.

Mr. Coates stressed the necessity of getting more information, and said that if the present rate of Customs increase were maintained the Estimate would he found to be doubled. Besides the Estimates of departmental heads were always conservative. It was rather unfair that the House should not have had an opportunity of studying the figures. Mr. Coates held that it was impossible that taxation could not be passed on, and his side of the House was opposed to the principle. The primage should be removed as soon as possible. It may be said that Reform was here 14'years and did not do it, but during that time they made wholesale reductions in Customs duties and did not put the primage duty up, although at timdte they were as hard-pressed as the lion, gentleman’s Government. MR. COATES’S AMENDMENT As an amendment Mr. Coates moved “that, on the assumption that there should be increased l'evenue in the Customs tax, in the opinion of this House such increase in taxation should be obtained from luxury items, particularly those of foreign origin, and not on articles affecting the cost of living and production.” Mr. A. Harris (Waitemata) drew attention to the United Party manifesto, amid cries of “Ho,” and said that the Bill was not in keeping with the section of the manifesto which said that the tariff would be based on a reduction in the cost of living, and those food supplies not locally provided would be put on the free After the Acting-Leader, Mr. Forbes, had said that he would accept the motion as one of no-confidence, the Leader of the Labour Party, Mr. H. E. Holland, rose and took up the cudgels on behalf of the Government, giving a thoroughly clear indication that the Bill was going through with the help of Labour. He said that Mr. Coates had denounced the primage dulv which the Labour Party bad never favoured: but why did Mr. Coates favour the imposition of the duty when lie was in power. Mr. Coates had said that the extra duty would result in costs being increased three times, and yet. while he knew of that why did he not take off the first prim-

age duty. He knew if he did he would have to get from £250.000 to £400,000 extra from the wealthy taxpayer, but he did not do that. Regarding the amendment. Mr. Holland said that the Labour Party was concerned with the necessities of life and not overmuch with luxuries. It had had substantial concessions. He went on to criticise the peculiar morality of Mr. Harris, w ho said that the tax was justified as a war measure, and now described it as putting a hand, in a friend's pocekt and robbing him when he was not looking, and as "brigandage." Mr. Holland then chuckled as he turned up the old division lists, in a 1921 “Hansard,” which he claimed was the book of doom for some people. He gave examples of members of the Reform Party voting against foodstuffs being placed on the free list. Mr. Coates’s amendment, if carried, would not materially alter the position and yet Mr. Rushworth favoured the amendment. Mr. RuShworth was returned in the Bay of Islands by Labour and Liberal voters on condition that he voted out Reform, so the most charitable view Mr. Holland could take of his attitude was that he did not know that to vote for the amendment was to put the Government out and Reform in again. The Government was quite right in taking the amendment as a vote of no-con-fidence. The Leader of the Opposition must take it as such. Mr. Coates: Yes, and you must vote for it. Mr. Holland said that it was a question whether the amendment was big enough to vote the Government out on. To vote Reform back was choosing the worse of two evils. “I’m prepared to vote the Government out tomorrow,” said Mr. Holland, “provided the Labour Party can take its place. That is the position we have taken up since the election. We won’t vote an immensely worse Government in.” He went on to say that Mr. Coates had not stated the case for his amendment, and had not given details of the benefits under it. “LABOUR CARRIES THE BAG” There followed close on Mr. Holland’s heels Mr. D. Jones, the Reform fighter. Mr. Jones felt like proposing another amendment if there were not one already before the House. That was a vote of sympathy for Mr. Holland. Mr. Jones could not help feeling sorry for Mr. Holland as he wandered on and on trying to explain himself out of an awkward position. Mr. Holland and his party were carrying the bag of the Prime Minister, and they took the attitude of voting for the lesser evil than the Reform Party. It was no wonder the Labour Party was slipping back in New Zealand when Mr. Holland agreed with the United Party to tax the farmer. He had to swallow the primage duty as his part, and now he was going to walk into the Government lobby to carry out his part of the deal. Mr. Holland knew that if he had said that the Labour Party was going to vote against the Bill it would have been withdrawn. Mr. Holland had said that the Reform Party had not made the wealthier taxpayer pay, but the United Party was not making him pay, but was sheltering him, and the Labour Party let him. Mr. Holland simply was drawing a smoke screen along to hide himself in a very difficult position. Just when the second reading debate threatened to last for a few hours more the division on Mr. Coates’s amendment was taken at 12.40 a.m. and the amendment was lost by 43 votes to 23. The division list as might be expected was as follows: THE DIVISION <LIST Ayes (43). Armstrong McDonald Atmore McDougall Black McKeen Bodkin Makitanara Broadfoot Mason Chapman Munns Clinkard Munro Cobbe Murdoch Ue la Pcrrelle O'Brien Donald Parry Fletcher Poison Forbes Ransom Fraser Savage Hawke .Semple Healy Smith Hogan Stallwcrtliy Holland, 11. E. Sullivan Howard Taverner Jenkins Veitch Jordan Wilford Lye Wilkinson McCombs Noes (23). Anscll Dysnar Campbell Macmillan Coates Massey Dickie Nash Field Rushworth v Hall Samuel Hamilton Sykes Harris Waite Holland, H. Williams Jones Wright Kyle Young Linklater The second division was called oil the second reading, resulting in the motion being carried by 43 to 22. The House completed the committee stage of the Bill without further opposition, after the telegraph office closed at 2 a.m. this morning. The Bill was then read a third time and passed. Mr. Forbes intimated that the Public Works Statement would be taken today. The House rose at 2.5 a.m.