NATIONAL DEBT.

Auckland Star, Volume LIX, Issue 51, 1 March 1928, Page 9

NATIONAL DEBT.

THE POSITION TO-DAY. EXFLAIHED BT MIHUTOU STILL PAYING FOR THE WAR. (By Telegraph—Own Correspoadeat.): DUXEDDff, this day. While agreeing that publie borrowing should be reduce to a minimum, the Minister of Finance, the Hon. Downie Stewart, in his address last night, said that no heavy or immediate reduction in the Dominion's annual borrowing conld be made by a stroke of the pen. The reduction must come gradually.

"What we are aiming at," said, the Minister, "is, first, to borrow each Tear only the minimum amount necesasry to carry on the heavy programme of public works we hare in hand, and secondly, to pay off as much as possible each year of the dead-weight war debt, and thereby year by year lessen the annual increase in the public debt. The effect of this policy is shown in the fact that, whereas in 1925-26 the public debt increased by £11,000,000, in 1926-27 it increased by under £7,000,000. For 1927-28 I hope to show that it will increase by only £6,000,000. Thereafter, if circumstance* prove favourable, each year the net increase in borrowing should fall, until wo ultimately reach the point where the amount of war debt or other debt | off will equal the new money borrowed for public works."

When critics compared New Zealand's gross debt per head of £170 19/5. with Australia's debt of £167 16/8 per head, it must be remembered, said the Minister that New Zealand's debt included over £30.000.000 raised for the purposes of State advances, which had no counterpart in the total for Australia. Again, New Zealand had over £18,000.000 of investments, including reserve funds, Bank of New Zealand shares and other items, the chief of which was the accumulated surplus in the public debt redemption fund of over £13.500,000.

The Minister examined the iaereaae in the public debt between 1904 and 1927 to show that while nearly 40 per cent of the borrowed capital in the pre-war years was devoted to other objects, such as land settlement, defence and loans to local bodies, since 1914 the money had been concentrated on public works" The yearly average of the borrowing had been £2.730.000 from 1904 to 1914, £2.520.000 from 1914 to 1920. £5.280.000 from 1920 to 1927. Adjusted approximately to pre-war values the yearly averages for the three periods were £2.730.000, £1.700.000 and £3,500.000, or per head of population, £2 14/, £1 »/ and £2 12/ respectively*