Govt. Borrowing Attacked

Press, Volume CVI, Issue 31093, 23 June 1966, Page 14

Govt. Borrowing Attacked

t.V.Z. Press Suociatton) WELLINGTON, June 22. Opposition speakers in the Budget debate ton i g h-t continued their attack on the Government’s borrowing policies, while Government members countered by citing examples of the country’s prosperity.

The Minister of Works (Mr Allen) said that the “young man in a hurry”—the Leader of the Opposition (Mr Kirk) —had been in such a hurry in his party that he had not noticed developments in New Zealand.

The Deputy Leader of the Opposition (Mr Watt) said the Minister of Electricity (Mr Shand) was “scheming, conniving and plotting” to find a way of increasing electricity charges. The Budget was called "sound and honest” (Government), and “tired” (Opposition).

"There has been no attempt to buy votes in this election year.” said Mr W. B. Tennent (Govt.. Manawatu). Mr M. A. Connelly (OppRiccarton) said the Government had exhausted every avenue for borrowing internally and practically every avenue for borrowing overseas.

The Budget was “a tired! document from a tired Minis-, ter of Finance,” said Mr W. E. Rowling (Opp., Buller). In i no way did it solve the prob-; lems facing the country, or in- ’ spire any sector to increase productivity. Borrowing was the Govern-; ment’s only refuge, Mr Rowl-[ ing said. The amount borrowed and available for effective use was gradually diminishing. Next year the interest on the public debt would be 8 per cent of Government expenditure. Mr Rowling asked what provision was being made for repayment of the £25.2 million borrowed from the International Monetary Fund. He also wondered what likely major

conditions would be laid down by the fund if New Zealand sought further drawings. The least the Government could do was inform the pub|hc of the implications and, probable consequences of its I actions. Mr Rowling said the Government was devoted to taxation by proxy. He advised I people to consider house ■ rents and transport, postal .and power charges. i Mr Tennent said that taxa-' tion increases were in proportion to the national income. Total taxation had been in a fairly constant pat-: tern for a considerable time..; | Mr Tennent said the think-1 ing person would regard the

Budget as sound and honest. Mr Tennent said the Government had borrowed more than was needed for capital works. Instead of spending ithe extra amount, it was using it to reduce the Government’s indebtedness to the Reserve Bank, or was “freezing” it ‘ The external debt had risen by £29 million in the last six years, but the gross national product had risen by £540 [ million. j Mr Tennent said he was certain the flow of imports would be adequate to meet Ithe country’s needs in the next 12 months. ' The problems of the country could be tackled by heavy

taxation, rigid import control or a combination of both. The Government did not favour any of those methods. Mr Tennent said the exchange control measures just introduced would halt practices which were “not cricket.” It was a measure which would be watched with a view toward lifting it when its aims were accomplished. Mr M. A. Connelly (Opp., Riccarton) said the Government was taking a record amount of taxation this year. “In this Budget a total of £459 million will be taken in taxation—£lB6 per head, man, woman and child,” he said. Mr Connelly said the Government was collecting £134 million more in social security tax and general taxation than when the last Labour Government was in office. “The extent to which this Government has borrowed should be made public,” he said.

The gross borrowing of the present Government had been shown as £76 million but the Controller and Auditor-Gen-eral’s report said that the Government’s gross borrowing this year was £lOB million, Mr Connelly said. In the last year the Government had paid £47 million interest on its loans.