POCKETS NOT FULL

Waikato Times, Volume 125, Issue 20921, 28 September 1939, Page 8

POCKETS NOT FULL

DEPLETED RESOURCES NEW ZEALAND AND WAR LOWER EXPENDITURE (By Telegraph.—Special to Times) WELLINGTON, Wednesday The view that some of the £75,000,000 the Government proposed to spend in this financial year could have been transferred to the War Expenses Account was put forward by the Leader of the Opposition, the Hon. A. Hamilton, during the debate on the War Expenses Bill in the House of Representatives today. By that means, said Mr Hamilton, the Government could have got through at least the rest of this year without calling on the people for more money. Expenditure proposed by the Government this year was £75,000,000, said Mr Hamilton. Similar expenditure in 1914-1915 totalled £15,900,000 and in 1918 £18,364,000. War expenditure in the last war amounted to about £16,000,000 a year. It was not a cheap war as there were about 100,000 men overseas and it was a question whether New Zealand would have to enter into such heavy commitments this time. Resources Depleted The taxation increases just made were not the first this year, he continued. The Budget provided £2,500,000 more taxation and with the new taxes this meant that the people had to find an extra £6,226,000 lor the year. “This is a hefty increase,” said Mr Hamilton, “but the people will willingly pay if they are satisfied that the Minister is careful with his other expenditure.” The Government’s weakness was that the country’s financial resources were already partially depleted, added Mr Hamilton. New Zealand was entering the war, not with its pockets full and its taxable capacity high, because after four years of spending the country was handicapped badly. The Reserve Bank was already being leaned on fairly heavily and it was a question how much that could be extended safely. Money had left the country, departmental balances were depleted and the internal loan had taken money out of private hands. Cuts Suggested Expenditure on public works and social services had increased from £25,000,000 to £38,000,000 since the Government came in, he continued. The public works expenditure was largely on non-interest bearing works. Roads and railways between them were to take £12,000,000 this year, and surely that sum was not essential. If something could not be saved out of this amount the public would not be satisfied.

The Government could cut this sum down by from £5,000,000 to £10,000,000, and if it did so it would have the full support of the Opposition. Beside a cut in public works expenditure there should be cuts in relief expenditure and some adjustment should be made in wages and conditions under industrial awards. The country’s two essential services, defence and farm labour, Mr Hamilton said, were assessed at about 11s a day, so there was plenty of room for others to be adjusted. Sacrifice should be universal and nobody would object if it were fair. Soldiers' Income Tax

Mr Hamilton questioned if there was any need to borrow when savings could be made in other directions. “Has the Minister made any arrangement with Great Britain about loans?” he asked. The Hon. W. Nash: No, none. Mr Hamilton: Will soldiers have to pay income tax? Mr Nash: We propose to relievo soldiers overseas from paying income tax on their pay. Mr S. G. Holland (Opposition— Christchurch North): On seven bob a day they won’t be paying any tax. Mr Nash: Would you suggest that a man liable for £2OOO tax here should be free if he is overseas? Mr Holland: I would free him. Mr Nash added that similar arrangements for the relief of soldiers overseas from death duties would be made to those made during the last war.

Mr Hamilton concluded by saying that some definite undertaking should be given that war taxes would immediately be withdrawn at the end of the war. The country should then revert at once to pre-war conditions.