STATE LENDING.

Auckland Star, Volume XLIV, Issue 186, 6 August 1913, Page 7

STATE LENDING.

LIBERALS STTSPICIOTTS OF AMENDING BILL.

POPULAR CONTBOL DIMINISHED.

(By Telegraph.—-Parliamentary Reporter.)

WELLINGTON, Tuesday.

Liberals in Opposition suspiciously upon the Government's attempts to improve the State Advances Act. They submitted the Hon. Jae. Allen's bill to a hot fire of criticism in the House to-night. It centred mainly on the proposal to do away with the Minister's right to a ©eat on the Board of Control, and the presence of two members appointed from outside the Civil Service.

STATE ADVANCES. The Minister of Finance, tn moving the second reading of the State Advances Bill, stated that one feature waa the elimination of the Minister as a member of the Advances Board. He wae not at all sure about the wisdom of making the borrowing power cumulative in respect to the Department. To-day the borrowing power of the office was seven millione. Losses had been caused on the raising of local bodies' loans by the State, totalling £22,000. Th« bill would stop this.

A REGRETTABLE PROPOSAL. Sir Joseph Ward stated that the bill would allow progress payments to local bodies on account of their loane. This would throw heavy responsibilities on the State, as it would pile up commitments. He heard with great regret the proposal to remove from the Board the Minister, who was responsible to Parliament for the borrowing and lending of millions. No board of State employees, however excellent, should have unfettered power. The voice of the people was to be removed entirely, and the administration left in the hands of a body of State employees not responsible to Parliament' or the Minister. What was by the lose of £22,000? The figure really represented the difference between the repayments of interest to the State and the amounts actually paid by the country for money which was loaned at a slightly lower rate to the local body. The understanding when the bill was passed was to deliberately give aesietance in this way to local bodies. It was proposed in the bill to so arrange sinking funds that they must continue for 40 years aftor the termination of the loan, inetead of being eo-tenninous. A MINISTER'S PRIVILEGE. A Minister ought, without impropriety, to be able to send for a member of the Board to diecuss its policy and the relation of its operation to the country generally; but if he wa3 removed from the Board he would, ipso facto, be deemed not to have any right of interference with its affairs. It was a tremendous reversal of the power of the people. He urged the Government to give the public some representation on the Board.

The Prime Minkter replied that the Lending Board at present Included tiro outsiders. It wae not because of their incapacity that they were to be superseded by two departmental heads. Sir Joseph Ward would know as well as anyone that within th-e service there were equally as capable iufiino&s men as conld be obtained outside. He named the Commissioner in charge of the Insirrance Department and fche Oomtnfeeionex of Taxee as men of that stamp.

THK POLITICAL INFLTJEJvCB CRY. Rightly or wrongly —ho believed, wrongly —there wae a feeling in the country that political influence had something to do with loans from the Advances Department. lie believed that 99 out of every 100 people in the Dominion were not aware of the fact that the Advances Board -ivae in every sense of the word an independent Board, and not to be got at in any way by the House. The proposals in the bill would, he believed, remove all future possibility of that misconception. He contended there was a lose in connection with the loans to local bodjes last year, largely the result of the increased borrowing at a time of financial stress, besides which large turns of money borrowed for local -bodies was non-interest bearing' for some time before it parsed from the hands of the .State to the local body. He agreed, hovrevnr, that no lose actually occurred upon the money passing on to local authorities. LOCAL LOAN LIMITS. So far ac local authorities were concerned, the advances would, under the propositi ho cuDiul&ti vp. Mr. Witty: Unlimited. The Prime Minister: Of course there will be the year-to-year limit. The Hon. Mr. Maeeey, in reference, to ihe sinking , fund proposal, explained that, instead of having a slaking fund of one per cent, the Public Trustee wonld set apart sufficient for the purpose of meeting olaLm? under the Publk; Debt Extinction Act, and then re-invest the balance in the ordinary way. SOME REMINDERS.

Mr. Russell severely compared the present attitude of the Government regarding borrowing and the attitude of the same party towards borrowing when in Opposition. By a fortuity of circumstances, that party now found themselves on the Treasury benches, and were taking power to borrow £3,250.000, and a million to be expended every v*»ar for purposes which Mr. Maeeey and" his friends so loudly denounced when in Opposition. (Government laughter.) Again, the Minister of Finance had previouely declared that the Public Debt Extinction Fund was futile, a delusion and farcica-1. (Liberals: Hear, hear.) Ajs for the Prime Minister, he had declared, also, that the fund was futile, and that there wat; nothing to prevent a future Government from collaring it, The Prime Minister: Well, we are not going to coilnr it. Mr. Russell: Xo, we will take good care of that. NOT FAIR TREATMENT. The member for Avon expressed the opinion that the (Jovernnjcnt were not treating the Advances Department fairly. He proceeded to review the operations of the Department during several years past, showing that the combined oflicce had made a handsome profit, yet the present Government had done its best to throw stigma on the Ward Covernment concerning the Department, and ( had t-ilked as ihy.igh members n.« a 1 ! body of men were nnt honest enough to be trusted to contr.i flic tip'Tatiou" ot ; those State Department.-. Whit need; was there to say that everything must! be remover] from' political influence? The f Minister ought to remain on the Adfnuicas Board. Ho suggested the Board ! should consist of the officials and two I outside gentlemen nominated by the I Government and elected by. the Home.

A MINISTERIAL ANSWER. The Hon. Mr. Hemes contended that the argument raised by the last speaker concerning the attitude of the present Government party was quite misleading. The average man in tlxe street did not know who represented him on the Board. Far better to have a skilled officer on the Board.

Mr. Mac Donald declared that every bilJ the Government brought down removed some more responsibility from the Cabinet, and gave Ministers more time to run around the country.

"Surely this bill is the irony of politics," declared Mr. Laurenson, who pointed out that the Government which so long talked of extravagant borrowing proposed in their measure to get power to raise £2,200,000 per annum. A real test between Liberal and Conservative was the former's belief in trusting the people, and the Conservative policy of taking as much control as possible from the people.

Mr. Witty asked to whom the House could appeal if things went wrong on the Board. The Minister should not lose his grip of the Board.

Mr. Isitt, attacking the same clause of the bill, accused the Government of continually filching control from the people. Members conld be elected to Parliament by the people, but there the people's governing power stopped. The private member's day w*e becoming an absolute farce. The Government was not in office to serve the people, but required the people to serve them. MINISTER IN REPLY. The Hon. Mr. Allen, in reply, denied that the Government in office had ever declared against a policy of borrowing. What they did say was that borrowing should be made in reason, and not with extravagance. As to the removal of the Minister from the Board, the position had been altered because the Minister's inclusion in the Board was farcical. Sir Joseph Ward attended only once or twice, and his successor never attended. He himself had never attended. It was wiser also, he contended, that the Minister should not be a member, because of possible influence, especially at election times. The Minister had, however, the veto all the time, because h-3 controlled the Rource of supply. The Minister declared also that he was not opposed to the principle of the Public Debt Extinction Act, nor to the sinking fund. He opposed, it last year because it was a screaming farce. (Opposition laughter.) Interest had been collared out of other funde to pay the interest in the Public Debt Extinction Fund. As to accumulation, he concluded that if any Department had good reason to pass on accumulations it was the State Advances Department. The bill was read a second time.