LOCALLY AND ELSEWHERE

Evening Post, Volume CX, Issue 103, 28 October 1925, Page 9

LOCALLY AND ELSEWHERE

UNDUE EXTRAVAGANCE

A CHARGE DENIED

MR. NOSWORTHY REPLIES TO

SIR JOSEPH WARD,

(BY TELEGRAPH'.- -PRESS ASSOCIATION.) ASHBURTON, 27th October. The Minister of Finance, (the Hon. W. Nosworthy) to-day made a statement in reply to Sir Joseph Ward's speech at Invercargill. He said:— . \

"In the Press reports of Sir Joseph Ward's speech the 1 Government is practically charged with excessive borrowing since the end of 1919, which marked the close of the National Ministry. It has, I think, already been amply demonstrated that the Government exercised great prudence in the expenditure o£ loan money, but I would point out that since Ist April, 1920, up to 31st March/1925, the Public Debt increased by £26,600,000, an annual average of a little more than £5,000,000. It must not be overlooked that the expenditure on public works was reduced to the minimum during the war period. Further; in making comparison with the prewar rate of loan expenditure, it is necessary to take into consideration'the fact that prices and wages have increased "by at least 50 per cent, in the interim. Over the period mentioned, the debt under certain heads, mostly war expenses, showed a decrease of £75,000,000. Added to the net increase, this' meant that approximately £34,000,000 additional moneys had been , borrowed for other accounts. Of this sum £27,000,----000 was borrowed for productive purposes, including £16,500,000 for interest-earning public works, notably railways, telegraphs, and electric supply, and £7,000,000 for State advances. A further'£3,7oo,ooo, mostly expended on immigration and roads, must be regarded as indirectly productive, while the remaining £3,300,000 was spent for the most part on publio buildings, including schools. . ■ •

"It might be here mentioned that though the debt has been increased by £26,000,000, the interest and sinking fund charges met out of taxation show, no increase during this period. "In regard to the important question of taxation, Sir Joseph Ward is reported to have said: 'Next to Great Britain, New Zealand is' the most heavily taxed country in the world per head of the population.' Without., going further afield than Australia, the 'latest available statistics shows that the amount per head for the Commonwealth works out at £12 6s 7d for the year ended June, .1924, compared to our rate of £12 3s 5d for the last financial year. I would like to analyse the £12'3s 5d per head for this Dominion, and see where it all goes to. Firstly, 5s 6d represents tire tax and motor registration fees, which go to the maintenance of main highways and are not available for general purposes. Secondly, the war debt and war pensions absorb £4 4s 3d, leaving £7 13a 8d for other purposes, compared with £5 2s 9d in 1914. ■ If a deduction is made to counteract the fall in the value of money over the war period it will be found that the direct burden on the taxpayer, apart from war costs, has not relatively increased. The speech under review made particular reference to Customs revenue and to the big increases under that heading since 1920. The increased revenue, however, is almost; solely due to increased.exports. Broadly speaking, Customs duties for revenue purposes are levied on luxuries only, and half the revenue for 1924, was derived from the importation of jewellery and fancy goods, spirits, and alcoholic liquors, tobacco, motor * vehicles, and tires/ Apart from luxuries, Customs duties are levied almost solely for the protection of our own industries, and here it might be added that the suggestion made by Sir^ Joseph Ward for adjusting rates, are more, or less truisms, in that ho has practically enumerated the guiding principle underlying the present tariff. :■'■■'■

"Sir Joseph Ward refers to the increase of £8,000,000 in expenditure. After tho war charges have been deducted, about £1,000,000 of this will lie found under the heading of special Acts, and is due lo the increase in pensions, apart from war pensions, amounting to about £600,000, to increases in hospital subsidies and such ilike charges. This leaves a £7,000,000 incjease in annual appropriations, but this in no way represents the relative increase in the burden of the taxpayers. Annual appropriations include the working expenses of the Railways and Post and . Telegraph Departments, whose increased expenses are covered by increased receipts and impose nothing on the taxpayer as such. £520,000 of tho increase is purely nominal, being due to a change in the accounting system.

"Finally, it is necessary to make allowances for tho world-wide fall ,in the value of money. When these allowances have been made it will be found that the comparative result obtained works out per head of mean population as follows:— £s. d. | 1914-15 3 5 6 1924-25 3 0 9 These figures afford further proof that there has been no administrative extravagance in expenditure during the last tlecade."