BORROWING POLICY

Evening Post, Volume CV, Issue 121, 24 May 1928, Page 8

BORROWING POLICY

MR. POLSON'S ATTACK "FUSS ABOUT FOURPENCE" , LAST LOAN INTEREST (By: Telegraph.—Press Association.) ...■ HAMILTON, 23rd May.; Mr, W. J. Poison, Dominion president of tho Farmers' Union, vigorously at* tacked- the Government 's borrowing policy when addressing the provincial farmers * conference this afternoon. Mr. Poison said that during the period since'the war wo had been increasing the National Debt at the rato of nearly a million a month. The gross Na- , tional. Debt at 31st March, 1921, was __206;32_,000; tho amount borrowed since that date was £44,680,000, bringing the total debt to £ 245,850,000 in 1927.; Mr. Poison also detailed the local body debt, whi.h, less the amount borrowed :by local bodies from the Government, in 1927 had reached the extraordinary total of £64,000,000. It was quite obvious that renewals of these loans : must mean an increased rate of interest, in spite of the recently-made -oast'about the success of tho last New Zealand loan. This loan Mr. Poison described as a fuss about 4d, because the net yield to the investor was £4 19s Bd, whereas in the case of the Commonwealth's last loan, more recently floated than New Zealand _,_ tho net ' yield to investors was £5, a difference of 4d. Banking authorities showed that in the last few years all issues participated in the general improvement, New Zealand among them. "In the next four years the Government is maturing £87,475,000 worth of loans which have to be renewed," said Mr. Poison. "This means an increased interest- charge on renewals alone in the next four years of over £400,000. In addition, new loans estimated by the Government mean another million in interest in the next five years. In a speech in reply to me, the Hon. W. D. • Stewart admitted that exports must pay for imports, and should show a sufiicient surplus to pay also for oversea loans. This is just my point.' Now he claims credit for the import of capital without debit for borrowing. This is most extraordinary bookkeeping for a Minister of Finance. He forgets that he borrowed 12s 6d worth and must pay' back £1, and suggests that he borrow : ed £1 and need only pay back 12s 6d. Taking theso figures into account, we 1 find the borrowing rate of the country has enormously increased sinco the war. In the-reply of Mr. James on behalf of tho Government to my Masterton speech,-it is staled .that-1.-ignored the. fact that import values ara. loaded with 10 per cent. The loading is intended to cover in part vthe cob.; of transport, freight, ins-ranee,; -etc. ;jlr. James .is apparently undpr the, impression thatwe * get our,' transport done for'iothing. , rf To eliminate it would falsify the figures, arid as*a fact, 10 per cent, is not nearly enough' to cover the charges. In the 1924-25' Year Book the Government \ Statistician gives an estimated balancesheet of debits and credits of New Zealand. He estimtes freight, insurance, and exchange at 20 per cent, of the imports. , The aggregate of the imports v from 1921 to 1927 was £317,000,000. : This gives £28,817,000 as the added amount for freight over the period. If the basis adopted by the' Government in this trade balance statement is correct, then a sum of £29,000,000 must be added to the imports to get the balance of freight '.-hai-pSvierv the period.; This,. would make my figures all the more formidable. It would be interesting to know why these statements from the' Year Book were/dropped after two v years." •