EMPLOYMENT FUND

Wairarapa Times-Age, 11 August 1938, Page 8

EMPLOYMENT FUND

FINANCE MINISTER DENIES

UNFAIR USE REPLY TO MR COATES. MORE ABOUT SLUMP PSYCHOLOGY. (By Telegraph—Press Association.) WELLINGTON, This Day. A denial that there had been any improper use of moneys from the Employment Promotion Fund to obtain an estimated Budget surplus for the current year was made by the Minister of Finance, the Hon W. Nash, in his reply to the Financial Debate in the House of Representatives last night. “One thing which the member for Kaipara, the Rt Hon J. G. Coates, point' ed out,” said Mr Nash, “was that the present world trade outlook tended to show that the figures in the Budget are doubtful. This shows that his mind is clearly running along the line that there is another slump coming in New Zealand. He pointed to various trends overseas, such as falling commodity prices, and suggests that the same influences must extend to New Zealand. “We could have a slump here within a year if we cared to follow the psychology of the past. If we anticipate a recession people will start with-hold-ing their money, and the slump will come. The member for Kaipara merely argues that because there has been a recession overseas it will normallj come to this country. We do not agree with that argument.” CREDITS iTO DEPARMENTS. Mr Coates had stressed the use made of employment funds, the Ministei said, and had suggested that if the' funds had been properly used there would be a Budget deficit of, abou’ £600,000. Several individual votes from the estimates had been quoted. It was true that there was a credit of £60,000 to the Land and Income Tax Department, but that department was now charged with the task of collecting the employment tax and levy, and the sum was on the estimates to cover the costs of collection. The Labour Department was receiving £280.000 from the Employment Promotion Fund, Mr Nash continued, but that department was doing all the organising work in connection with employment promotion. The vote of £12j)00 for the Native Department was to cover the cost of supervison in Native employment schemes. There was also a credit in the vote for the Air Department, but it was there only to cover labour charges in the consrruction of aerodromes. With regard to the sum of £131,000 credited to the Agriculture Department, the greater portion was for assistance to fruitgrowers, while the balance was largely to cover the destruction of noxious weeds.

“There has been no unfair use of the employment funds,” Mi' Nash added. “Some additional moneys have been used in connection with public works, but that point can be dealt with later. It is true, of course, that the moneys in this fund next year will be devoted toward the social security scheme.” MONEY FOR HOUSING. Mr Coates had also asked where the money for housing was coming from, the Minister continued. It was being provided by means of treasury bills, and a perusal of the Public Accounts (87, Part III) would provide all the necessary information. Mr Coates: “I pointed out that there was £2,000,000 odd in treasury bills outstanding.” Mr Nash: “I think £BOO,OOO was due to one of the banks and this sum was met on April 18, shortly after the close of the financial year.”

Doubts had been raised as to the accuracy of the estimated revenue from Customs and sales tax, the Minister continued. Revenue under both these headings was working out very well and was in keeping with the estimates. Certainly there would be a reduction under these headings, but that had been anticipated. The same argument did not apply to income tax, because of the fact that the tax was paid on last year’s incomes. “The member for Kaipara made the point that every trader is likely to be affected by any shortage in the sterling funds,” said Mr Nash. “I would say that they were also affected by a storing-up of those funds, because at one time we were accumulating sterling balances while the people here were going short of things which were essential

“The position of the London funds must have an effect on the internal economy of the Dominion,” the Minister added, “but it should not be allowed to determine the economy of the Dominion. However, I agree that the position of the funds must be watched.' Mr Coates: “The Minister has not referred to the point I raised regarding the payment of maintenance out of loan accounts.” “It was stated that the vote for maintenance of public works and services had dropped from £1.009,000 to £668,800,” said Mr Nash. “The question was why there should be such a disparity or such a difference. I will be glad to go into that point a little later, but at the moment I have no notes in regard to it.”