PROSPERITY ASSURED

Wairarapa Times-Age, 11 August 1938, Page 7

PROSPERITY ASSURED

ACCORDING TO FINANCE MINISTER FINAL SPEECH IN DEBATE DEBATE REPLY TO OPPOSITION CRITICS (By Telegraph—Press Association.) WELLINGTON, This Day. Opposition criticism of the Government’s financial policy was replied to by the Minister of Finance, the Hon W. Nash, in winding up the Financial Debate in the House of Representatives last night. The extra amount anticipated from income tax this year, said the Minister was due to the fact that it was expected to collect more from a lot of people who had previously evaded taxation. Another factor in the yield from taxation was the higher incomes earned by the people. The member for Hurunui, the Rt Hon G. W. Forbes, had talked about the Government’s disregard for the future of the Dominion, Mr Nash said. Mr Forbes had said that people had approached him and expressed their anxiety about the future. No doubt these people were anxious because they had seen prosperity and were afraid it would not continue. Prosperity would inevitably last for another three years after the election, and he hoped for all time. Mr Forbes appeared more concerned about opinions from London. At times London had said some nasty things about the Government, and no doubt more nasty things would be said between now and the election. The Minister said that Mr Forbes had also asked for a straight forward explanation of the reduction in the public debt. “What more information can be given?” asked Mr Nash. “I went out of my way to give every figure. There is not a figure associated with the public debt that has not been set out so that every member can understand the position. The Budget shows that sinking funds have been used to pay the debt.”

“INFINITELY BETTER OFF” The Rt Hon J? G. Coates (Opposition, Kaipara): “How much better off is the country?” “Infinitely better off because it has a better Government,” said Mr Nash. “If I had £5OO in the bank and used £4OO of it to pay off a mortgage my debt would be reduced from £5OO to £lOO. That is what this Budget does.” The statement had been made by the member for Parnell, Mr W. P. Endean, that the country was living beyond its resources, said the Minister. That was not correct. Mr Endean had also quoted from a confidential circular sent out by one of the largest stock-broking firms in Australia, suggesting there were doubts in the minds of investors as to investments in this country. According to Mr Endean one of the officers' of this company had visited the Dominion and stated that the Government could get all the money it wanted at a higher rate of interest. If the Government were to allow interest rates to slip no doubt it would please the friends of the Opposition. “One month this firm states that the prices of our securities are firming,” said Mr Nash, “and next month, in. view of the approach of the election, it sends out a damning statement about our investments.” Mr H. S. S. Kyle (Opposition, Riccarton): “That was after the Prime Minister talked about kicking over the traces.” COSTS AND INTEREST RATES

Mr Nash said that Mr H. G. Dickie (Opposition, Patea) had stated during the debate that costs in the freezing industry had gone up by £750,000, but if that was so it would be necessary for the Government to investigate the balance-sheets of the freezing companies. Their total net profits in 1935 were £175,329, with an average dividend of 6.8 per cent. The next year the net profits fell to £159,060, although the dividends increased to 7.4 per cent, and last year there were net profits of £197,000 and an average dividend of 7.7 per cent. That showed that the farmers with the exception of the sheep-farmers whose prices had fallen, were now better off. Reference had been made to money having been sent overseas, the Minister said, and he had no doubt that there were people who would send money to Australia if they could get 41 per cent there as against 3J percent in New Zealand. x Mr W. J. Broadfoot (Opposition, Waitomo): “They can get 4J per cent here now, can’t they? I believe the Government Life (Insurance Department is offering that rate.” Mr Nash: “I did not know that was so.” THE UNEMPLOYMENT TAX. “The Leader of the Opposition, the Hon A. Hamilton, stated that if the previous Government had remained in power the unemployment tax would have been abolished,” the Minister continued, “but we have spent £5,000,000 collected from that tax, and I would like to know what expenditure he would have cut out. He must remember that there are two sides to a Government’s finances.

“Mr Hamilton also compared our income tax with that- in Britain, but with the exception of three lines they pay more in Britain than we do, and the people are charged for certain services by the local authorities that are covered in this country by the Consolidated Fund. “The Government claims some credit for having reduced interest rates. The interest rates have declined on the average each year since 1935. The Oposition claims credit because they fixed a rate of 4 1-8 per cent for State Advances loans, but the fact that all rates have come down is largely determined by this Government’s policy. There is now more money out at 41 and 5 per cent, and less out at 6 per per cent than formerly.” The Hon Sir Alfred Ransom (Opposition, Pahiatua): “The capitalists are responsible for that.” Mr Nash: “Although there are some very good people among the capitalists I never knew one who preferred 41 per cent to 6 per cent.”