STATE FINANCE

Evening Post, Volume CXXV, Issue 92, 20 April 1938, Page 8

STATE FINANCE

(To" the Editor.)

Sir,—ln his fburth article, which appeared in "The Post" of April. 12, Sir Harry Gullett, M.H.R., states under the heading of "A Lesson in Finance" that the Government draws upon the profits or reserves of the State Life Assurance, viz., the Government Life Insurance Department, to help make up the Government's revenue requirements. This assertion is quite contrary to fact, as all the profits resulting from the operations of this Department go to the policyholders only. It detracts somewhat from the value of the author's articles to find him indulging in flights of fancy with such an air of positiveness as to the truth of his assertions. It is to be trusted that in fairness to both the Minister of Finance and the Government Life Insurance Department Sir Harry will acknowledge his error through your columns.—l am, etc., POLICYHOLDER. [In fairness to Sir Harry "Gullett it should be pointed out that the paragraph was evidently not intended to convey the meaning taken from it by "Policyholder." After reference to the estimated return from unemployment taxation, Sir Harry , wrote: ". . . this amount is taken in as the sheet anchor of public works expenditure, and is not included in normal Government revenue. To make up the balance the Government is drawing upon the Post Office, Savings Bank deposits and upon profits or reserves from the State's Life Assurance and Fire Insurance Departments and the State Advances Department." The context indicates that "the balance" refers to the resources for public works expenditure and does not imply that the funds named are taken into Government revenue. The mention of Post Office Savings Bank deposits, which, of course, remain the property of depositors and cannot be treated as revenue,' shows that the reference is to deposits, profits, and reserves in-, vested on loan with the Government. The Minister of Finance in his 1937 Budget included in the funds available for public works "amounts received for investment from the Post Office Savings Bank and other departmental sources." —Ed.]