WAR FINANCE

Auckland Star, Volume LXXVI, Issue 118, 21 May 1945, Page 3

WAR FINANCE

HUGE COST TO NEW ZEALAND

BANK GOVERNOR'S ADDRESS

"The cost of the war to New Zealand so far is over £500,000,000," said the Governor of the Reserve Bank, Mr. W. P. L. Ward, in a broadcast address last evening. "There are only two commonsense ways in which we can meet this cost; that is, by taxation and war loans."

The people of New Zealand had been taxed for war purposes alone to an amount of £202,000,000, said Mr. Ward. The costs were so heavy, however, that the people could not be expected to pay them y all by taxation. They had, therefore, been ar,ked to . übscribe to war loans. Every loan floated had been successful, and a total of about £239,000,000 had been raised to the end of March. When the present loan reached its target, as it was bound to do, the total of war loans would be about £265,000,000.

New Zealand had so far received £84,000,000 worth cf munitions, guns and equipment under Lend Lease. New Zealand, on her part, had had to shoulder the burden of supplying United States troops in the Pacific with munitions, ships, food and so on under a system known as Reverse Lend Lease. The astonishing amount of £58,000,000 worth of goods had been supplied under this arrangement, and the sum was still growing. This would offset the amount received under Lend Lease.

New Zealand's expenditure for the armed forces for the year ending March 31, 1945, was about £133,000,000. The main items were: Expenditure on Navy, over £7,000,000; Army, £57,000,000; Air Force, over £35,000,000. Reverse Lend Lease, £24,000,000. The approximated figures for 1945-46 would total £100,000,000, the drop of over £30,000,000 being mainly under the heading of war stores. As a result of the decreased war expenditure it had been possible to reduce this year's loan to £25,000,000, which was £15,000,000 less than last year's loan.

Dealing with the question as to whether the people were able to lend the money required without unfair sacrifice, the speaker said that the readily spendable money in the country up to the present date had increased by over £90,000,000 since the war began. Deposits in the Post Office Savings Bank and the Trustee Savings Banks had increased by approximately £65,000,000. Only those who held this money could make the loan a success.