The Dominion. WEDNESDAY, MAY 11, 1910. PAYING OFF THE PUBLIC DEBT.

Dominion, Volume 3, Issue 814, 11 May 1910, Page 4

The Dominion. WEDNESDAY, MAY 11, 1910. PAYING OFF THE PUBLIC DEBT.

In various quarters the public is being invited to accept the Prime Minister's reference at Winton to the necessity for paying off the public debt as a singularly fine proof of statesmanship. The proposal, of course, is neither new nor surprising. It is, indeed, a very proper one, and has been advocated for so long that its constant reiteration has almost become wearisome. It has been the opponents of the Government, however, who have been the chief advocates of systematic effort to extinguish the public debt of the country. The Prime Minister's political record may make it difficult for the public to believe that this passage of bis speech is not mere idlo padding not worth a second's serious consideration as a genuine promise of reform, but worth a good deal of thought as to what lies bc : hind the .sudden appearance of a reckless financier as a counsellor of thrift and cautious foresight. In 1803. he said that the Government had decided to do without borrowing: since that date his party has borrowed thirty millions sterling. In the. same year he said that less taxation should be taken from the people : since then the taxation per head has increased by over thirty per cent. In 1895 he said what he is saying to-day, that a beginning should be made with tho repayment of tho public debt: is it likely that his habits in the past fifteen years have made it more easy for him to do this to-day than it was then ? In 1894 he devoted a paragraph in his Budget to a declaration of the impropriety of distinguishing between loans as portions of the national debt: last year he was equally 'insistent on.the other side. In 1908 he was profoundly convinccd of the necessity for reducing the Civil Service, not because an arbitrary cut was necessary, but hccausc tho time had been reached when the waste that had crept in could be sharply cut away: to-day he tells us that the need for this economy no longer exists. For years ho declared that the only sound policy was to obtain 3 per cefit. from the railways, and that to seek a higher return would be to do injury to the country: today ho supports his colleague MrMillar's repudiation of his old teaching. So we might go on for pages with facts that make it very difficult to place any faith in his competence or his will to carry out' the policy which ho apparently recognises is best for the country, so long as that policy necessitates tho cxereise of care and economy.

It is rather staggering to note the remarkable change of front of some of the newspapers which support the Government as a result of the Prime .Minister's announcement on the subject of sinking .funds..; Wc >.ro told, for example, that "the sooner the truth regarding the frightful handicap wo are placing upon the people of another generation comes to be recognised the better"; and this from a quarter 'which for many years, has faithfully obeyed, the "Liberal" party's command to declare In season and out of season that tho .Government has been, perfectly wise in its borrowing and that the people who have complained ofthe legacy boing prepared for posterity have been traitors .'to the country, anxious only to injure our credit abroad! Comment would only spoil the delicate flavour of this critic's solemn warning of what it considers either a newly-discov-ered or a too-much-neglected fact'. Nor is it possible to do justice in criticism to tho equally delicious assurance that omission to begin' a debt-repayment policy "discounts our public credit and impugns our reputation for sanity." The Prime Minister's proposal is to make the period of liquidation extend over 75 years, the annual sinking fund amounting to about £150*000. It is a very great pity that he did not propose to do the trick by reducing the cost of government to tho quite sufficiently high figure at which he found it when Mr. Seddon died. This would give him about £1,600,000 a year as sinking fund, and this sum would extinguish the debt in about 40 years. Probably this would be too much to expect, but that a very substantial saving could be made no ono who has noted the enormous growth' in the cost of government can doubt. If the PimiE Minister brings down an actual Bill on the subject next session, which lie may easily do without having any serious intention of lifting the country out of the morass of debt, we trust that the friends of good government will fight hard for two things. The first is the making of the sinking fund a real one, and not a sham. The sum of £156,000 a year is ridiculously small in view of the vast sums that the Government is able to waste every year. The second carc of members should be to see that the sinking fund, if established, is placed beyond the reach of the present or any future Minister of Finance. ■ The only assurance that Sir Joseph Ward can give that the funds will be safe if used to financo the lending and other Departments of the Government is that "things have changed greatly during the last thirty years.' ' We need a better assurance that a Government which, owing to' Parliament's surrender of many of its financial and other functions, possesses limitless means of succumbing to tho temptation to manipulate the finances has in sonic occult way developed the power to resist giving way to that temptation. It is all very well to say that a sinking fund used for every day purposes of Departmental investment cannot he "annexed." It can be annexed, and it will bo annexed; not, of course, directly, but by ono of the many simple* processes of juggling funds from one pocket to another. .The country will be much better off with no special sinking fund at all than with such a make-believe as is possible unless proper safeguards arc provided. Every true friend of the country would welcome any genuine scheme for the extinction of the burden which has been heaped upon the nation 'by the extravagance of twenty years of a Liberal Administration that began with "sol£-rcli-ance" aa a watchword.