NEW ZEALAND’S FINANCES

Press, Volume LXXXVI, Issue 26121, 25 May 1950, Page 6

NEW ZEALAND’S FINANCES

MR FRASER COMMENTS “RASH AND UNSUSTAINED STATEMENT” (New Zealand Press Association) WELLINGTON, May 24. “Mr Holland’s new recipe for the presentation of the Public Accounts is at least as interesting, although not so successful, as those in the new edition of the famous Mrs Beeton’s cookery book,’’ said the Leader of the Opposition (Mr Fraser) this afternoon. “It would be very interesting to know r what view the Treasury and the Comptroller and Auditor-General takes of the innovations specially prepared and introduced to justify Mr Holland’s rash and unsustained statement that there will be a deficiency of £26.000.000 in the Public Accounts —a statement made in such a tremendous hurry for the obvious purpose of scoring as early as possible off what the Nationalists think are prostrate political opponents. “The annual report of the Comptroller and Auditor-General will probably explain the extent of his acquiescence and his reasons, if any, for his acquiescence. if he did acquiesce. It will no doubt also explain the capitulation in the whole or any part of the Treasury. Or was it the compelling of Treasury officers to adopt the new set-up V' Mr Fraser said that it must have been a terrible ordeal for them to be asked and to agree, if they did agree, to scrap the form of public presentation of the accounts which had been in use for so many years.

“Mr Nash is proved to be most accurate in his Budget Estimates both of the Consolidated Fund and the Social Security Fund,” said Mr Fraser. Mr Holland, he added, had apparently though it beneath his notice.,or at least irrelevant, to explain that the sum of £11,000.000 for Reserve Bank credit was just a substitute for £11.000.000 of previous debt, and that there was no increase in the debt. “In regard to the total Reserve Bank credit of £25.000.000. the repayment of the loan was £11,000.000. and the provision for housing was £9,250,000. The Labour Government carried out its housing programme generally with a similar provision. The remaining amount expended of £5,400,000 or £6.000.000 (determined by the actual amount used in housing) was for maintenance and development work, including educational buildings, roads, and a large hydro-electric system. “The question at issue, then, is not any recklessness of finance on the part of the Labour Government, whose finance has proved sound, but it is: ‘Was the effect of the use of the amount mentioned of Reserve Bank credit of real and actual detriment to the country? Was the impact of this sum injurious to the community by causing conspicuous inflation?’ “The fact is that the tendency to inflation was quite effectively held in check by price fixing and was infinitesimal during Labour’s term of office. Surely it was a hundred times better to risk slight inflation, which was controlled up to the abandonment of stabilisation. than to stop house building, hydro-electric systems, and development work generally, causing stagnation. unemployment, and widespread distress.’’