OUR WAR FINANCE

Dominion, Volume 34, Issue 108, 31 January 1941, Page 6

OUR WAR FINANCE

Now that he has been relieved of the onerous duties of Minister of Marketing, Mr. Nash should be able to concentrate his attention on vitally important financial problems. It is to be hoped, further, that he will take the public more fully into his confidence concerning these It is as important here as it is at Home that those in authority should be able to carry the people with them in any and every branch ot the war effort. One of our greatest problems is war finance. the Minister originally estimated that this year the war effort would cost the Dominion £37,500,000. A later estimate placed it higher. O the aggregate, nearly one-half represented the cost of equipping and maintaining New Zealand forces overseas, and the British Government undertook to provide the money for that purpose. There remained £l7 750,000 to be found locally, and the Minister outlined proposals which, it was estimated, would bring in £14,120,000, leaving only £3,630,000 to be borrowed. In the first nine months of 1940-41 the expenditure was £15,380,000, of which only £8,000,000 came from taxation, leaving a verv large balance to be provided in the final quarter. Actually, according to the Minister’s statement, the sums borrowed £9 000,000, but it is not clear whether that included the £Z,6UO,OUG lent free of interest, or only the £1,400,000 of these paiticular, loans' that were later converted to war stock. When dealing with loan transactions during the yehr, the Minister, in his speech at Dunedin, said that of the £19,037,000 obtained in Jus wav, the sum of £7,090,000 had been allocated to war expenses. it the free loans were included then the balance must.be the resu t o iie compulsory war loan, of which a final instalment is not yet due. must be assumed that Mr. Nash included that instalment when he gave the total borrowings for the current year. • , It should be our duty as a nation, by a united effort, not only to pay our way, but also to do something to reduce the degree of financial assistance sought from the Motner Country. It may not be possible to meet these particular obligations in sterling, but any money made available by a favourable trading balance would help to lighten the staggering load placed on the people at Home. That course would be naturally advantageous. It would assist the British authorities on the one hand, and, on the other, reduce the dead-weight overseas debt to be carried by New Zealan after the war. That will be one of the tests applied to the. Govern--ment’s war finance. The object cannot be achieved solely by increased production for export. There must be, at the same time, a strict limitation of internal expenditure, and. unfortunately, the figures given by Mr. Nash in Dunedin show plainly that, in this respect, the Government has failed to make any progress.