The Public Debt

Press, Volume CIII, Issue 30483, 3 July 1964, Page 10

The Public Debt

Sir, —Your sub-leader of June 29 advanced what seems to be a reasonable excuse for tolerating a huge and mounting public debt and the consequent interest bill. But no mention was made of depreciation on the assets to which the editorial referred. Some assets, such as the old Bank of New Zealand building in Colombo street, are written off before they reach the end of useful life. Others, such as the Auckland harbour bridge, become almost obsolete or inadequate before the original debt "has been paid Off, and many others are probably demolished before their costs have been amortised, even if the actual loan money and interest has been paid. Depreciation figures fairly prominently in most balance sheets and I think some mention should have been made of this point in the editorial concerned.—Yours, etc., D. BROWN. July 1, 1964. [“Depreciation," as defined by an accountant or an inspector for the Inland Revenue Department, is not always reflected in the market value of an asset. Inflation is on the borrower’s side, for the money the Government borrowed 10 years ago is worth less today, while the assets in which the loan was invested may be worth more. Some of the Government’s assets, such as roads and buildings, may deteriorate through use, but they are usually well maintained; and maintenance expenditure comes from current revenue, not loan moneys.—Ed., “The Press.”]

Sir, —It is hard to understand your reasoning in your leading article on this subject, especially when the Auditor-General who is looking after the public’s interest has stated that it is high time the Government should cease borrowing, especially overseas, as you state everyone in New Zealand owes over £4OO in the £lOOO million debt which has now been increased for years and costs the poor old taxpayer who after all said and done does the paying over £45,000,000 to service so your statement that half of the debt the Government is in effect transferring money from one pocket to another, in other words only jugglipg with figures but that does not alter the fact that it is still the taxpayer who has to do the paying.—Yours, etc., S. W. HICKMOTT. July 2, 1964.