TAX OR BORROW?

Evening Post, Volume CXIX, Issue 49, 27 February 1935, Page 8

TAX OR BORROW?

Much of the Government money spent in Australia on relief works, public works, and financial help to primary producers is not borrowed money; but the degree to which Australia is seeking "recovery" by spending borrowed money has been the cause of anxiety to some Australians, and those "who take that view will understand the New Zealand Govern-, ment's desire—as expressed by Mr. Masters last night— to get out of the depression with as little borrowing as possible. The millions raised in New Zealand (not by borrowing) for the relief of unemployment lie heavily on the shoulders of the paying section of the people, but, if the principles of a sound financial , policy are respected, these millions will be looked on much more comI placently than millions of long-term ' debt (or short-term debt destined to jbe long termed). The revenue millions will not be a burden after- ! wards; the borrowed millions will be a burden until Governments either become prudent or repudiate. One phase of the Australian borrowing is the continued brake exerted by banker on politician, out of. which arises the politicians' new interest in an open bills market. But it would be a mistake to assume that Australia is just borrowing. Good revenue showing in the Federali Budget has helped. At the same time, internal spending may have stimulated Budget revenues. The wool rise certainly did. And that rise was an event of 1933-34, not 0f'1934-35.