MR. M'DOUGALL, M.P., AND REFORM FINANCE

Evening Post, Volume CIX, Issue 123, 27 May 1930, Page 8

MR. M'DOUGALL, M.P., AND REFORM FINANCE

(To the Editor.)

■ Sir,—ln- your report of the University debate on "Who Should Rule? United,Reform, Labour,", I notice' that Mr. M'Dou°-all,- M.P., makes the astounding statement that "the ■ United Party went to the'country' they did not antici-, pate that there would be a deficit of £4 021,252 left by the Reform . Government." As your morning contemporary reports the lioubiu-üble■gentleman as making the same statement, I can only conclude he has been correctly reported. But surely, Sir, he does' not expect to get awayj; with that extraordinary miss;statement or fact. When the Reform Government went to the-country in ■ November, 1928, there was nothing to indicate that there was any deficit in sight in the national accounts. ■ The United Government took charge on. 10th December, and became responsible for the finances of llw Dominion for the remaining' three and a half months of the financial year. In the Budget Statement, delivered by Sir Joseph Ward in the House of Representatives on Ist August, 1929, the deficit for the year was stated at £577,252, but; this was met out of the . balance of the accumulated surpluses, and, after making other payments amounting, to £271,439 thus reducing the balance brought forward on Ist April, 1928, by £848,691, Sir Joseph gave the balance of the accumulated surpluses as £2,453,541 (vide 1929 Budget, page .7).' , " :' '•'"'<•'- Now, in regard to this so-called deficit of £577,252, which would notI.have, occur-, red had. the Consolidated Fund received \ the benefit of the Post and Telegraph revenue, as it did in former years, as I will explain later Sir Joseph Ward,, while emphasising that this deficit "is mainly the outcome of the Budget of my predecessor in office,"-goes on to state (vide Budget, page 1) "the expenditure was 'uuexpeete'dly increased by £150,000 for additional in-; terest arising out of the large conversion operations I was called upon to deal with immediately upon assuming office.;^ Actually, these "conversion operations,' with the arrangements for the £7,000,000 loan, were entered upon in January, 1929, and would not have been undertaken m the usual course of events before May, but for advices received from London that provision should be made for 1929-30 loaii requirements in the earlier month. In all common fairness, therefore, it cannot ba -? said the Reform Government was responsible for that .£15G,000, so, that the £577,----•252 is reducible by that amount and stands therefore at £421,252. But, even, that amount would have been wiped out, but forthe change in the accountancy methods of the I. and T. Department adopted by the ■Reform Government. Sir Joseph Ward himself states (see Budget, \ page 2):—In total the revenue is not compar* able with that received in 1927-28, as last year the total revenue and expenditure of the Post Office were not comprised in the Consolidated Fund, which included only interest on capital as an item,-, of revenue. '-.■■■■ Now, the receipts of the' Post and Telegraph Department for the financial year 1928-29 amounted to £3,445,545, and the expenditure to £2,290,158, the latter including the: £428,000 paid into the Consolidated Fund in respect of interest on capital liability. The actual balance of' receipts over payments thus amounted to £525,357, which, eliminating the £156,000 charge for "conversion operations" from the £577,252 deficit) would have left the' Consolidated Fund in credit to the extent of £107,135. But, as I have already pointed out, the Reform Government had lefty ■■ as. the balance of the-accumulated surpluses £3,302,232 on 31st March, 1929, and the "deficit" of £577,252 was, with,other sums, met out of that amount, leaving a. , balance of £2,453,541 still available on 31st March,11929. That-is a very different state ~. of affairs to that claimed by Mr. M'Dougall, M.P., who should study the public accounts a little more closely before venturing an opinion upon the Reform Party V' management of the finances.—l am, etc., ERNEST A. JAMES.26th May,