THE FINANCE.

Evening Post, Volume LXXVII, Issue 140, 15 June 1909, Page 8

THE FINANCE.

GOVERNMENT'S PROPOSALS CONSIDERED. MR. MASSEY'S CRITICISM. "A MOST DANGEROUS PRECEDENT." When the debate upon the Premier's financial proposals was resumed in the House of Representatives to-day, Mr. Massey stated that before discussing the loan proposals he wished to refer to the amendment, which he ha-d intended to move on the second reading of the Bill concerning defence matters. The Premier had assured him that he would be given an opportunity later on of moving this amendment, and he accepted that assurance. In the Loan Bill itself there were certain proposals to which ho strongly objected, and he intended to make his opposition very ! clear when the Bill was in committee, j He recognised that it was impossible to ] do without loan money, for the policy j [of the Government was a policy whiea could not be continued without borrowI ing. He hoped that members would not. J run away with the idea that it was only I intended to borrow a million . and aquarter. Clause 9 provided for the raising of £75,000 for certain purposes tv hich had to be added to £1,250,000 The House further had agreed years ago that in regard to a General Loan Bill the costs and cnarges connected with flotation should be added to the amount of the loan. With a loan of £1,326,000 this meant an increase t o something hke £1,400,000. The Government had not treated the House fairly in the mat- ■' ter. They had been called together at a moment's ngtice and asked t 0 discuss a most important matter without having been gl ven -he necessary information to discuas it properly. They had not even been given the table showing the public indebtedness. Sir J. W ai -d : Because it was imposI sible to give it. ™J!& MaS3 l y : ""?y not? Xt certainly conld have been done. Continuing, he referred to clause 3, which asked for ?j?jl cr r»7 > i_ * n m a PPK>priat«ms up to 14th October. They had been given to understand that Parliament was to meet in beptember, and the proper thine fo & l do^ c -, WM tO , . brin S down an Imprest Supply BUI, making it unnecessary for the Government to call Parliament to- 1 gether before the middle of October. It seemed to him that many members were I not impressed with the necessity of I keeping a proper control upon the pursestrings. They were all responsible to LwT °%n% n as he was, bnb I™ i l han x^ c ?, to the treatment proFwat J7 {^Government he would 1 walk out of Parliament. It was proposed to extend the amount of £15(T00!) which was allowed to be expended 'for I general purposes to £200,000 This moant that thay were asked to give the Government a blank ohe«ue, and to of ™T? ?" ** >80luteI 7 ""limited power net Th t0 the . ™en*f« of the Cabinet. There would be simply no control ' toV X Pf n<il^ re " ntil lament m^ ture Th' hC u ™ ulh ° rised expenditme. They would have no possible opportunity of knowing to i what u S e S the voted , put. Ihe same thine applied tn thn ' clause 8, which deals with moneys raised being credited to the Public * Works Fund, and wphed for works and purposes scheduled, he stated that the The Premier : Not railways Mr. Massey :If you are able to fc T hi WOr f^ wh * not railways? However, Continuing, Mr. Massey said that the SIS? e^\^SLt Sfjd nner himself would be away, but his colleagues, during his absence, could start any works that they liked! Probably when Parliament met again they would find that most of the money authorised had been expended. He doubted if the clause would bear the interpretation put upon it by the Premier, for it did not refer to specified roads and bridges. The estimates should have beer, sent up to Parliament and dealt with in the ordinary way. "Let us go home," he continued, "and let them run the country in their own way. If we let them have sufficient rope it will not take long for them to hang themselves, and it will be a most interesung process. The Bill opened up the whole question of administration. He realised that" at this juncture administration was more important' than legislation, but still a certain amount of legislation was necessary in the interests of the country. He regretted that ■ the finances of the Dominion were m an unsatisfactory state. The Premier had anown a surplus of £184,321, but there were liabilities of £287,132. If members would look at- the appropriation account, they would see that there was an unexpended balance of £200,000. lhis simply meant that if the unappropriated balance had been expended there would have been no surpltie. The Government, had it so wished, could ml e ?P ended more than it had done. The Premier : That is not so. WERE SALARIES HELD OVER ? Mr. Massey said that public servants had come to him and informed him that their salaries had been held over the end of the financial year in order, presumably to swell the surplus. The Premier : That is a gross perversion of the truth. It is absolutelycontrary to. fact. J I Mr. Massey stated that other members could tear out what he said. The Government had not made sufficient pro- £ S fT S? r a T l^ day - From his Place m the 'House ho had warned them time after time, but they had never looked xorward to a period of depression. They had continued to spend and ppend, and they were -still spending, though ho must admit not to the same extent. Now that a serious position had arisen, the Government, instead of facing it, were showing a dispositon to run away from The members of the. Government were shirking their duty, and he was sorry to say that a majority of memJ, es , o . th . 6 House was helping them to shirk then- duty by saying that the business ot Parliament should be suspended for three or four months on account of the fact that the Prime Alinister was going Home. LOAN RENEWALS. t T h ?^ ri f 8 Minister credit to the fact that he had renewed a number of loans without increasing the rate of interest. Ue (Mr. Massoy) presumed that many of those were short-dated loans. He always understood that when they raised loans by way of short-dated debentures, it was because money was abnormally dear, or there was some rea son flhy they could not go on the London money market ; but it was alwav* understood, too, that when the ,hoH dated debentures matured they W oi,ld be converted mto inscribed stock Ha did not ffiant to say tk*Mt»t waa p^ I

done, bat it was seldom done, and in I consequence these short-dated loans were mounting up to a tremendous extent and though he could not speak with authority he felt a-bsoktely certain that they must be very seriously handicapping and embarrassing tf»e Government's finance. Ho hoped sincerely that no attempt would be made to raise this money by way of short-dated debentures, because the more money floated in that way the greater would be the difficulty ot the Dominion. Even if the rate of interest was not increased there was a very serioua expense to the taxpayers He found that through the last conversion, stock had been floated amounting over £1,200,000. The admitted cost of those transaction was £36,928, which with another item of £8454, meant that I^Tf £ u o >^° and £50 > 000 had been added to the Public Debt, for which the Dominion had not benefitted to the extent of a, single shilling. If those were legitimate methods of finance, it was no wonder the Dominion had a, h»ge public debt, and a debt for part of which no value had been received. ' 1 REVENUE NOT THE ONLY INCREASE. Dealing with the Premier's etatement at InvercargiU as to the increase of revenue by , £1,416,626, Mr. ,M asse y point out that Sir Joseph Ward forgot • J - h , w . Mdienc e that during the period of his administration the expenditure' had increased by £1,663,173— in other words, that during that period there was an increase of expenditure over revenue of some £246,000. It was somewhat significant that that was just [ the sum which the Prime 'Minister proI posed to save by his retrenchment scheme ! in connection with the Public Service j Joseph Ward: We gave £600,000 | a year in concessions. ! Mr. Massey: I have heard that old t story before. Sir Joseph Ward : It is a, fact. Ji- ' • rr n f? 8 . v : I * m speaking of the administration of the public business ' ot the country, and I think the right hon. gentleman wilhfind that my figures aro absolutely correct h thfm J ° Seph ' Ward: I don ' fc dis P ut ° THE PUBLIC SERVICE. 'Mr. Massey, dealing with the Public service, said that what had been done ■recently in the way of retrenchment seemed to him to bo of a purely temporary character, and that as soon as the present difficulty was got over and the country recovered, there was nothing to prevent whoever happened to be on°the .treasury benches at the time— possibly in a few years— from again going in for the extravagant practices which had characterised the present Administration. deal fS - By ° Vghfc t0 6° a Sre^ deal further m connection with the lubhc service than anything that had yet been proposed from the Treasury That ww a matter which should have been dealt with this session and that was why he opposed the prorogation. FINANCIAL STRINGENCY. In regard to the financial stringency lie said the trouble seemed to be that there was not sufficient money in the country for the requirement/ of the people doing business here, for the farmers and manufacturers and merchants, leaving the Government out of the 2™; He thought that at I nvcr ! cargdl the other day the Premier said the colony was under-banked. He (Mr bSw y 2- dld </ ofc , know whether ™* : Ranking would make any difference, but he did say this, that they ought to en,?S c /" 6Ve f y Wft y where possible the inLvocfuction of capital. (Hear, hear.) le was rather surprised to find the Prune Minister admitting in one or h£ T*?T J^.^ring the S period o f the present Administration a number of toancial companies had taken their cap- £ North the PCOP C 0 - He referred to wf « ™ m 9? mm J 3an y- fche North Britsh, the New Zeafand Trust and Loan the New Zealand and River Plate Com '%%?' a ? d n he Ota S° and Southland Investment Company. He (Mr. Massey) ! did not know what the aggregate capital be *r ,l°- mpanieS itmust be something vory considerable, and he over again that the Advances to SettSS SSSTt. redUCed the rate ° mteieot lh e department was doiua- a big business, and lf 3 thought there w as not a member m the House who did not teT-f 1 , 0 * * c rate of interest washier fiftTen'ye^ 611 ™* f ° r tlAst ADVANCES TO SETTLERS. Mr. Massey then dealt with the AddKlt*° S t ta ZSZ S Departmont, and the difficulty of obtaining advances. His constituents had come to him askina his assistance in obtaining advances from the department. The 'Prime .Minister : The department has not raised the rate of interest Members of the Opposition: 'The-/ cannot get any advances at all n«H j' Massey continuod that the loans and advances of this and other StaS JESSoir g departments had been »mited to ou?Ji,f 00 r S: Minister: We have paid Mr. Massey was i prepared to admit that, Ji J 'P reßmt loans were limited to w2tL ? ir n en people were ke pt fh^L X tbe ? I\mon1 \ mone y for months after they had been informed that their applioSn? SS M ad , been ? railt€d - were obtainable from private sources at up to 6 per cent when the amount was not large, but the difficulty came in when amounts of, say , £ 50 00 and over were lai ' Sei the sum "q^red Sf hhe^ cr Ithe1 the rate ° f interest asked This difficulty the Advances to Settlers" Department could not meet. There was no Advances to Settlers Department in Australia, but there money was at present much cheaper than in New Zealand. SETTLERS LEAVING. However, there was another reason for the stringency of the money market \ ■number of our very best settlers had taken advantage of the good prices offering for land until very recently, and iZSiR Id °ufc, Packed up, and taken their capital to other countries. Mr. Massev 'here read a published interview with a Wawarapa man who had been to Queensland, and who said that lvj knew twenty Pi™%% * landc « with a total capital of £150,000^00 had g«no to that State lhe Prrnie Minister : What is the with e ours ? UCenSland lnnd - «-P-ed Mr. Massey maintained that some of 1 Of ° Ul \Pe°Ple were leaving tt f ea j and .' ™ d they were the peopl! v?nr w g '^ en cm P lo ynenfc ii n P past years. Was ,t any wonder that there was a scarcity of employment ? . I THE FREEHOLD. Nothing had done more to create a depression than the wretched Land Bit of two years ago, with its attack upon the freehold and attempt to abolish it h,A £ ° Wn con , sUfcue ncy his attention had been receaUy called to a block of third-class knd, but capable of great improvement, which under ordiuary c;rcumstances wold hare supported anuinber of famzlies. Until the passage of the Land Bill it could have been opened for settlement at 7s 6d per acre A number of settiers had inspected it, but when they found that it had been set aside as a national endowment, and would only be let on the renewable lease at about 15s an acre, they would not look at it. He hoped something would be done to remedy the stupid, idiotic mistake of the Land Bill. They must restore confidence to the. settles, and give them to understand that they would not be penalised. That would go a-grsat j

f way towards restoring confidence and f ■prosperity. I >J 1- J. Bnnin gs : Now you are right. I Mr. Massey : Yes, and I hope you will support me. I RAILWAYS ADMINISTRATION. Referring to railway matters, Mr Massey Si fid that last year the excess Smd r£? y re T en , ue ovei ' expenditure was ±-014,000, and the previous year it had • hnT fS 8 ' 0 ??, P ona- C aJal expend? X u ab »f ln e the year we had purV^, d «i be Ma -nawatu railway at a cost J of £1 000,000. When the public got to lwnow that during the past year we had' £4 r ™ e^n th f public indebtedness by £4,500,000, they would be startled. INCREASED ADVANCES. The Prime Minister : You wero just calling out for an increase of money for advancing purposes. Mr. Massey said that what he suggested was that instead of relying on the Government lending departments we shoirld encourage the introduction of private capital. He repeated that thecapital invest*. J in our railways was now very little short of £29,000,000 nnn ° n t* t S ? m , the revenue was £800,that the railways had the benefit of the open lines vote, being assisted to a cer*Wl eXte "V rOm . the Public Works which was borrowed money. The Government declared that the railways paid 3| per cent., but he did not think they were paying 2| per ccn t. There was a very serious loss in connection ™ °« r liailways Department. timebell! aSSey WBS interru P ted b y *c A COUNTRY MEMBER SPEAKS sai? r ;n n W> C> , Buchana " (Wairarapa) said some people on the Government benches never lost an opportunity of shrieking at the capitalist Now cani fal departed from the colony to a vXv LT Th ° loan «»iie- S Joseph Ward : When did they det an ce fc m on °cy n C ° mpameS W ° uld nofc hJwf' B , nchanai l condemned the leasehold system and the system on which vaY lons b / the Government DeSS T± wei : 6 based - He said it loXed iarfm^nf " CeS he ,q a °ted) as if the department was used to putting difficulties v, the way of people to prevent tossy?*" 11 * fche iTee^ vaiue s S3J contarf S t e o Ph f a^ rd ! That » ****** Mr. Buchanan also condemned the. S?rSo ng , ° f G r r " ment -"Sanl work? ffflf.r W f l °. P u aSS moße y for What S«i l Tv y f been VVhat chance had he for getting any of that money for authod?ed 8 £. y « Idistnct, which had not bee^carHed body 'eke* 11 = The chance as an yr ' ' Bueh * n . an referred to the hardSnrh™ an *° d . by the Gover nmenf s reder P ? Hf fl° heme ' which had bee » reni»« + d , lrectl y nec<s '«ary by the Government s own mismanagement. UtasSop!^ the House ad^ uraed