CRITICISM BY MR NASH

Press, Volume LXXXVI, Issue 26120, 24 May 1950, Page 8

CRITICISM BY MR NASH

METHODS USED BY PRIME MINISTER

STATEMENT “GROTESQUE AND MISLEADING”

“There does not appear to be any limit to the steps Mr Holland will take to misrepresent the financial position of New Zealand,” said the former Minister of Finance (Mr W. Nash) commenting yesterday on the statement on the Public Accounts issued by the Prime Minister (Mr Holland). ‘‘The latest published statement of the alleged financial position is as grotesque and misleading as could possibly be presented. To take all capital items and place them in the current income and expenditure accounts is misleading and mischievous. I am satisfied, that on mature examination, no thinking citizen except the most biased partisan, will approve Mr Holland’s methods.

“When the Consolidated Fund and the Social Security Accounts are shown and compared with the Estimates approved by Parliament, as they have been for many years past, they show a surplus for the year. If the capital National Development Fund Account is shown in the form recommended by the Treasury since the establishment, of this fund it will show receipts and expenditure for capital purposes.

“Instead of following recognised practice Mr Holland, to enable him to show a large deficit, has apparently arranged with the Treasury—with the approval of Audit—to amalgamate capital receipts with the receipts of the Consolidated Fund, the Social Security Fund, and the War Expenses Account —four totally different accounts —and to make matters more misleading, and with a view'lo confusing the public he has included expenditure on capital works as ordinary expenditure. This would correspond to a commercial organisation putting its loans and expenditure for capital purposes in with its trading and profit and loss accounts.

Consolidated Fund Surplus “The figures as published show a surplus in the Consolidated Fund, even after the deficit in the War Expenses Account (which will require examination) and presuming the balance of the Social Security Fund is maintained at £8,682,000, which Mr Holland's party said was too much. Had the Social Security Fund met all the charges incurred during the year with a transfer as proposed in the Budget presented to Parliament on August 18 of last year it would still have a credit balance exceeding £4.000,000.

‘The following table shows the capital works programmes submitted to Parliament in the 1949 Budget:—

Estimates, 1949-50. £ Housing .. 9.250,000 Education buildings .. 2,250 000 Electrical supply .. 6,350,000 Highway construction .. 2,500,000 Land settlement .. 4,250,000 Railways (improvements and construction) .. 2,990,000 State coal mines .. 2,000 000 State forests .. .. 1,250.000 Telegraph extensions .. 2,500,000 Christmas Island phosphates .. .. 125.000 Other works .. .. 1,803,000 Total .. .. £35,268,000

Capital for Works “The capital required for these works was obtained from public and Government sources, the Reserve Bank apparently providing, according to Mr Holland, £15,000,000 to supplement public and other contributions,” said Mr Nash. “Keeping the finances for the works programme separate, the £11,000,000 provided for repayment of loans can be dealt with separately If Mr Holland says that these works should have ceased, how would he overcome the demand for electric power, houses, schools, and the other essential capital works mentioned? The actual sum expended is £4,000,000 less than the figure of £38,371.000 given by Mr Holland in his survey of February 1 last. But still Mr Holland makes his present figures agree with his earlier survey. Does Mr Holland suggest that the construction of State rental houses, hydro-electricity works, purchase of land for settlement of servicemen. provision of schools, highway construction, improvements to railways, development of State coal mines, telegraph extensions, and State forests, should have ceased because the full sum required by way of loan from the public was not subscribed? ‘Mr Holland, in his alleged economic surveys, has completely ignored the fact that during the last six years the Government has repaid £24.400,000 of credit created by the trading banks. No, person whether an ‘economic doctor or other type can see the minute effect that the Reserve Bank credit mentioned would have on the cost of living or living standards of our people.

The other side of the picture is that from 1940 during the last decade, which includes the years of war, New Zealand has had less recourse to bank credit than either the United States, J he . United Kingdom, Canada, or Australia. said Mr Nash. “It is difficult to understand why the accounts are so misrepresented other than to provide excuses for increasing instead of reducing living costs or to provide excuses for the National Government not living up to the extravagant promises made to the electors last year.”