STATE BORROWING.

Auckland Star, Volume LX, Issue 36, 12 February 1929, Page 8

STATE BORROWING.

ECONOMIC RESEARCH URGED.

EXAMPLE OF AUSTRALIA,

(By Telegraph.—Own Correspondent.)

CHRISTCHURCH, this day.

Comprehensive research in relation to State borrowing was advocated for New Zealand in the course of an interview by Professor D. P. Copland, dean of the faculty of commerce in the University of Melbourne and a graduate of Canterbury College. . Valuable research, tne professor eaid, had been conducted in Australia by the Development and Migration Commission, which was set up in 1926 to report on settlement schemes to be financed out of tjie £34,000,000 made available to Australia by Great Britain under the migration agreement. It was hoped that by the expenditure of that amount by the State Governments over a period of 10 years Australia would be able to absorb 450,000 immigrants there. For the first time attention was drawn to economic costs involved in settlement schemes and an attempt had been made to estimate the financial results of loan expenditure.

Turning to New Zealand, the visiting professor said this Dominion's public debt was increasing just as rapidly as Australia's. The local bodies' debt in particular had been increasing exceptionally fast, having been doubled with in 13 years. In Australia there was more fundamental criticism of loan expenditure than in New Zealand, due partly to the examination of public loan expenditure om.de by the commission.

Speaking of the loan proposals of the Ward Government, Professor Copland said: "Public borrowing for developmental purposes naturally creates employment and economic prosperity while the loan money is being expended, but unless the projects upon which the funds have been spent produce a total income which will meet the interest on the debt then there ifl ultimately an economic loss to tho community, then the demand for labour in proportion to the growth of population declines. In other words, public loan expenditure which is not economically sound ultimately aggravates unemployment."