FINANCE TASKS.

Taranaki Daily News, 2 June 1922, Page 5

FINANCE TASKS.

A HARD YEAR AHEAD. PREMIER REVIEWS POSITION. BIG DROP IN REVENUE. “BUT THE CORNER TURNED.” By Telegraph.—Press Association. Invercargill, Last Night. The Prime Minister delivered a political speech in the Municipal Theatre to-night. The Mayor (Mr. J. F. Lillierap) presided, and the building was crowded. Mr. Massey, who was very well received, said the responsibilities of the country had been enormously Increased by its part in the war. The public debt had practically doubled during the war period, but they were able to meet their obligations, though they had had a serious time. The cost of living had risen enormously and necessitated additional payments to public servants totalling £4,500,000. The cost of the requirements of the chief departments had increased from 100 to 300 per cent. Nothing would benefit the country so much as a reduction in taxation, which was an enormous burden, but, concur‘rently with the rise of expenditure, the national income had decreased tremendously. Their duty was to endeavor to make the burdens easier. They had to reduce the cost of Goverenment, the cost of living, the cost of production, and then followed a reduction of taxation. They must increase the output of the country. The problem had been tackled, and up to the present, not unsuccessfully. RETRENCHMENT POLICY. The Expenditure Adjustment Act passed last session with little opposition, that was merely camouflage, reduced all the higher salaries from the Premier down. They aimed at getting back about half the public service bonuses, but he did not know if they could do so. Retrenchment was most unpleasant work. Not only were salaries increased, sut departments were swoP len during the war, and now all surplus officers had to go. He had never tackled anything so unpleasant, but t much had been done, though much, unfortunately, remained to be done. Dealing with taxation, the Premier said taxation here was nearly as possible half that in Britain. He quoted a comparison with the Australian States, showing that the income tax in the latter was substantially more severe than in New Zealand. The last loan was a very satisfactory transaction and showed the confidence of British financiers in the Dominion. He thought the corner had been turned. Money would be cheaper still, and in his opinion mortgages in broad acres would before long be a favorite security in the Dominion. Referring to the rebates on land and income tax, he said the experiment was a great success; the money came in as well as at any time before the slump. He could not say what would be done next year, but if he could reduce taxation by the amount of the rebate he would be glad to do it. It was possible the rebate system would be continued. He hoped the Taxation Committee now sitting would be able to offer useful suggestions. POSITION IMPROVING. During the last five or six months there had been a great improvement in the financial and commercial position, partly due Jo the meat pool, which already had done splendid work. There was no occasion for the wool slump if shipments had been properly handled at Home. The wool accumulations had nearly gone, and soon the market would depend on ordinary supplies. He predicted that the new season would, open jwith wool prices higher, than now.

The present year, from the Government finance point of view, was going to be the worst of all, because the improvement in the conditions would not have time to take effect. The accumulated surplus carried forward from previous years would be required, and were available. They could expect a £2.000,000 drop in income tax. At Feilding he put it plainly that there was a deficiency of £330,000 on the year’s accounts. Referring to criticism of railway freights, he showed that New Zealand's, though high, were the lowest in the Empire, while he hoped that soon it would be possible to reduce the rates. During the past session, in tariff revision, they did something for secondary industries, and he was pleasea to note at the splendid winter show at Dunedin some results of that encouragement, which had not been given at the expense of the primary industries. He was glad to notice when he Was at Home the increased disposition to give preference to" Dominion produces, which he hoped would be translated ere long into more effective Imperial preference. He did not think free trade within the Empire by any means impossible, but they must have closer relations in trade, finance and defence. THE DEFICIT EXPLAINED. Reverting to last year’s deficit, Mr. Massey emphasised that they had £500,000 worth of coal in stock as a result of the necessary importations to keep the railways going. He hoped it would never again be necessary to go outside the country for coal. If they had not spent the money on coal they would have had a surplus, and similarly, if they had not given taxation rebates, they would have had a surplus, but in both instances the right thing was done. Further relief of taxation effected last session was increasing the mortgage tax exemption of small men from £4OOO to £6OOO, which, the Commissioner of Taxes informed him, affected 10,100 persons. The soldier settlements were costing a very large amount, but we did not admit that the tax was going to be heavy. The settlers had struck hard times, in which many experienced fanners had come to grief, but most of the soldiers were triers, and we were sure the majority would face their difficulties and come through. There would be losses in connection w?:n repayments.

He believed those who had taken up sheep farming would be all right, but where men had bought land at too high a price there would be failures. The Government had never turned a trier out, and was going to see them through. He urged the people not to discourage the soldier, but urge him to stick to his land, and when the slump was over and things settled down they nreuld have many thousand useful set*

tiers added to the producing population as a result of what had been done for the returned soldiers. MONEY FOR SOLDIERS. Dealing with what the country had done for the returned men, Mr. Massey quoted a return as follows: Land purchased under the Land for •Settlements Act, £5,816,840. Advances for purchases of private or . native land, £6,724,149. Advances towards the purchase of Crown leaseholds, £1,618,939. Advances towards the discharge, of 'mortgages, £433,007. Advances for the purchase or erection ’Of town dwellings, £7,747,318. Loans -for businesses, etc., and other •financial assistance under the Repatriation Act, £2,197,956. Advances for purchases of stock under the Discharged Soldiers’ Settlement Act, £3,903,468. A total of £28,441,317. Of the amount of £19.759,606 advanced under the Discharged Soldiers Settlement Act for the purchase of homes, there had been repaid £1,477,Of the loan of £1,803,194 under the Repatriation Act for the establishment of businesses, the purchase of furniture, etc., there had been repaxl £911,110. The total repayments were £2,388,261. Land held for settlement and ready for selection totalled 430,000 acres. Jhe Prime Minister quoted a return showing expenditure under permanent charges -for the year ended March 31, 19122, compared with the corresponding period of 1914. This gave a total of £12,874,161, compared with £4,236,088, an increase of £8,638,073. Mr. Massey also quoted a detailed comparison of the income taxation with New South Wales and the Commonwealth and Victoria and the Commonwealth in each case. Dealing with pensions and other humanitarian expenditure of the Government, Mr. Massey quoted a speech by Mr. C. E. Statham, in which he eulogised the Government as a friend of the widow or the fatherless. Turning to economies effected by the Government, the Premier read a return showing the saving effected under the •Consolidated Fund was .£4,592,336 and for other departments of the service £1,054,499, a total of £5,046,835. Increased charges had to be, however, £610,685 and. scale increases in classified salaries £226,443.