WAR WAS BLAMED

Evening Post, Volume CX, Issue 42, 18 August 1930, Page 9

WAR WAS BLAMED

BUT iWBOSGfrY

WHAT PILED Ul* THE DEBT? By "Observer." The war has been blamed for a great deal—perhaps for a little too much. The public debt of Australia in 1914, when the war started, was nearly doubled by the war; that is to say, the total loan expenditure on the war was only six millions less than the total Australian public debt of 1914. To-day the war debt represents only one-fourth of the total public debt! Of course, this remarkable change in debt proportions, during little, more than a decade, has not been entirely caused by the expansion of non-war debt. Another factor has been operating—repayment °£ Trar debt. But debtexpansion has, been much the greater factor. A DEBT IN TEN FIGURES. During the last eight years the Australian war debt has been decreased by nearly 50 millions.' But during the period from 1919 to 1930 the Federal debt increased by 68 millions, and in the same time the debts of the State Governments show the staggering increase of £343,616,000 (from £397,471,000 to £741,087,000). The total Australian public debt at 30th March was over a thousand millions—lll7 millions, or, to be exact, £1,117,276,000. The State Governments of Australia are mainly to blame for the fact1 that when you write the public debt you need ten numerals. Blaming the war has been a. blind. On a population basis the war debt is approximately £44 Ss Od a head, out of a total debt of £174 3s 8d a head.

, There are various reasons why Australia might, go deeper into tho trough than New Zealand. Australia is a bigger country; its ideas are continental, and not insular; it sees against the sky noble structures like the Sydney harbour bridge; its superior econqmip resources (and. its still loftier notions) enable it to go a long way before sticking point is reached. All these things might be expected to urge Australia, in a time of prosperity, to enter into deeper commitments than New Zealand might undertake. But there is a still more insidious factor —the double system of government. Two of everything in the way of overhead—two Legislatures, two public services, two inconie taxes—have confused ana blinded the elector till his attitude became "Let them all come!" Hence those State dobt figures.

For many yoars the State Govern-! ments claimed a share of the Customs revenue, ,which is a Federal affair. And though that was altered a few years ngo, tho State Governments continued to have moral or legal claims on tho Federal Government. This lack of a completo separation of finances made the double government system worse. To spend and then be poor seemed to be a good way to claim Federal charity, liven to-day the Fodoral Government, author of the "ruthless" Budget, gives a grant of a million sterling to the. State Governments. THE ELECTOR'S HEADACHE. It is fairly hard to check extravagance when there is only one government to watch. It is abont ten times as haul in a country which lias seven governments, and whore every inhabitant has two governments over him. And when, money leaks or is liable to leak from one of the two governments to the other one, weakening the latter'a sense of responsibility, to check extravagance becomes infinitely hard. Genoral elections do not help much. An election ia seldom fought purely on | prudent finance. The only prudent financier south of the Equator (or, at any rate, the only one who caught the approving eye of Sir Basil Blackett) saw his Government beaten at the last poll. In any ease the elector never understmuls finance. Ho in quite likely to HpcnTv with two voices. In the sama I year ho am^ dismiss an $s*H»TßgfMrt

State Govornmont of a certain political colour, and help to elect in the Federal sphere a Government of tho same colour and of equally extravagant tendoneio3. Or vico versa. So thoro is good reason to hope that tho governmental affairs of New Zoalattl would prove, on analysis, to liavo baoil less extravagantly carried on thtt those of Australia. Whether an impartial analysis tojiHl sustain HhiA hope w-^»wtlM3*-<i««s«tti _,