HIGHER TAXATION

Wairarapa Times-Age, 3 August 1939, Page 7

HIGHER TAXATION

AND HEAVY BORROWING FAILURE TO CARRY OUT PROMISES. MR HAMILTON OPENS DEBATt' WELLINGTON, r lhis Day. “This is Ihe breut'li ol' promise Ihidp'el. ’’ said the Leader of t he ()|)|>osit ion, M r 11amilton. when opening' the financial debale for the Opposition in the House of Representatives last niglit. Mr Hamilton detailed tt list of promises made by the Government. and claimed that in each ease il had failed to make its promise good.

“The Government promised not t<> increase taxation,” Mr Hamilton said, “but it has actually been increased by £16.000.000 a year. It promised to use the public credit, but new loans are being raised in London and in New Zealand and further internal borrowing is contemplated. The Government promised to reduce overseas debt, but it has just borrowed £9.000.000 in London. It said it would not increase the cost of government, but actually it is up by £28.000.000 a year. “What has happened to the Government's promise to cure unemployment?" Mr Hamilton asked. “Last year £6.500,000 was spent on the relief of unemployment. To provide free doctors it promised to sot aside £1.200.000, but actually only £.lOO 00(1 has been provided for that service." "If the medical men agreed to provide the service the money would be there,” said the Acting-Leader of tin* House. Mr Fraser. Mr Hamilton said that the Government had promised to increase production, but because its policy had made unproductive work more attractive production was falling. It had promised houses for 12s 6d a week, hut the rents of Government houses ranged from 16s 6d to 32s fid a week. BLOW AT LIVING STANDARDS. The Budget was one of contradictions. While the Government claimed to be trying to raise the standard ol living generally, the taxation proposals of the- Government were a direct blow at the standard of living of a typical New Zealand family. The Budget drew attention to the necessity for tapering off public works, but the public works proposed were on the same large scale as hitherto, so that the statement in the Budget was just another example of platitudinous talk that had no expression in practical or constructive effort. The Government talked about the necessity for reabsorbing men into industry. but one of its most recent acts had been to introduce a scheme for the relief of unemployment in which between GOO and 800 men were to be provided with work constructing tracks for hikers over the Cashmere hills in Christchurch. In addition, the Budget singled out the primary producer for further increased costs-. Examining the increase in the cos! of government, Mr Hamilton said that Parliamentary votes, both permanent and annual, had risen from £25.890 000 in 1935-3 G to £3B 042.000 in 1939-40. In the same period public works expenditure had gone up from £10.450.000 to £23.917,000, and unemployment and social security costs from £4'882,000 to £9.000.000. The G.ivernment. had actually increased the cos: of running the country by 70 per cent and had robbed almost every hen roes’ in an endeavour to stem off the day of reckoning. New Zealand had certainly sown its financial wild oats in the past few years. The Prime Minister had said that borrowing meant debt in perpetuity Mr Hamilton added, and as recently as December ot last year he had scouted the idea of borrowing overseas, but now the Government had actually done that. Mr Lee (Government. Gray t.ynn): “Because of the gangsters and loot pads who raided us." BIG INCREASE IN DEBT. During the past four years. Mr Hamilton said the Government had increased the public debt by £46 000.000 taking into account the £24,000.000 to be borrowed this year. That was the Government whose Prime Minister had stated that borrowing was debt in perpetuity. Reference wa.s made by Mr Hamilton to what he described as unfavour able financial alterations during the past year. Those included the increase in the Reserve Bank overdraft and the note issue, decreased post office deposits, the drop in London funds, the increase in the local body interest rate, the deficit in the Dairy Industry Account, the increase in the national debt, increased unemployment expenditure and borrowings, and a flight of capital. These were very serious changes in the financial structure of New" Zealand, and it was no wonder the Government was in a tight corner. 1