The Dominion. WEDNESDAY, MARCH 24, 1909. WAYS AND MEANS.

Dominion, Volume 2, Issue 464, 24 March 1909, Page 6

The Dominion. WEDNESDAY, MARCH 24, 1909. WAYS AND MEANS.

Most of our contemporaries, in discussing tno Government's offer to tho British Navy, have made only brief allusion to the question of ways and means, and then meroly to point out that only an extra £60,000 or £70,000 a ye.ar is necessary to meet the annual interest payment on a loan of two millions. One of the Christchurch papers, however, has regarded the matter as one requiring something quite different from a long-term loan which a future generation shall deal with as best it can when the time comes for meeting the liability incurred. Its suggestion is that the loan should be wiped out in 20 years. The annual charge necessary to wipo out the interest and capital of a 3 per cent, loan of £2,000,000 in 20 years works out, roughly, at about £133,000, or about 2s. 9d! per. head of the population. Whilo praise is due to the suggestion that the loan should bo actually extinguished in a finite time, we cannot believe that 20 years is a sufficiently brief period, and this for two commanding reasons. In the first place, a Dreadnought laid down this year is almost certain to be hopelessly obsolete long before 20 years have passed; and if there were no other reason for a shorter term of repayment, it should be sufficient to urge that our liabilities should bo cleared off before the ship drops out of the front rank in tho Navy. It is bad enough for the country to be paying year after year ( the interest on railway material that disappeared for ever long ago, leaving nothing behind it: it will be infinitely more painful if the children of to-day find themselves when men paying the interest on what may be termed a patriotic loan for which there is nothing to show but scrap-iron. Accordingly the financing of the proposal should proceed on tho basis that tho ship shall be replaced when it falls below the first class of active vessels. That involves the extinguishing of the liability in something like ten years.

As we pointed otit yesterday, the main objection to an ordinary loan—a permanent increase of the public debt—is the impropriety of leaving posterity to foot the bill. There is something peculiarly repugnant in tho idea that the present generation should accept tho Empire's applause for its self-sacrifice and quietly leave a future generation to bear tho real burden. In any event, posterity is certain to have troubles and liabilities of its own. If wo are to make a sacrifice, it should be a real sacrifice, and not a makebelieve,. The suggestion was made by the Chi'istchurch journal referred to that tho loan should bo discharged by means of a

special tax. This is a point which we dealt with on Monday, before the Government's decision had been announced. As we then showed, the taxation per head in Now Zealand is already over £5, as against £2 15s. in Great Britain, The burden of taxation is already far too high in this country; it is already, and has been for years, at a war rate. The steady growth of the burden has hcon largely duo to extravagance, and waste. Instead of increasing the load upon the people, the Government should abandon wasteful methods. Sound and economical administration in the Railways Department alone would save half a million a year. Even if the railways only paid their way, the saving would yield the annual amount necessary to meet the annual chargeabout £235,000—necessary to pay off in ten years the interest and capital of a £2,000,000 3 per cent. loan. Economy— urgently necessary in any case—is now all the more necessary if the country is to prepare itself to meet the naval needs of the future. Wo have been assuming throughout that the Government intends to float a special loan to carry out its proposal, and for that purpose the authority of Parliament will be necessary. Nothing could be more improper than to mingle this special expenditure with the ordinary accounts. When Parliament is asked to deal with the question, it must consider the formulation of a settled policy in respect of naval defence, and it is to bo hoped that there will be men in the House patriotic enough to insist on the early discharge of the new responsibility. The necessity of finding a very large sum every year—it would bo about £335,000 if the Dreadnought is to be completely paid for in ten years, that being the sum of £235,000 added to the present subsidy—would do much towards sobering the country into a recognition of the urgent importance of economy and good government.