FINANCIAL POLICY

Evening Post, Volume CXXV, Issue 131, 6 June 1938, Page 11

FINANCIAL POLICY

LABOUR GOVERNMENT LIABILITIES REDUCED j (By Telegraph—Press Association.) DUNEDIN, June 5. An exposition of the policy of the . Government, with particular reference : to finance, land settlement, and the guaranteed price, was given by the ; Minister of Lands (the Hon. F. Langstone) in an address to an audience : comprising several hundreds of people ' in the Burns Hall on Saturday night. ' Mr. Langstone contrasted the actions L of the present Government in various - directions with those of its predecessor ■ and claimed that under Labour rule j the lot of the people was immeasurably superior to their condition under ! former Governments. When the Labour Government came into power, Mr. Langstone said, a tremendous problem of unemployment had to be faced. At that time, in December, 1935, there were about 57,000 registered unemployed in New Zealand. Something had to be done. The Government found £270,000 for immediate relief. Mr. Langstone contrasted the conditions of that time with those today. " Then the farmers of the Dominion • were on the precipice of bankruptcy ■ and the whole country was in a par- - lous state in every way. The Laboup i Government had had to tackle the job ' of giving back to the working people the conditions that had been stolen ■ from them by the previous Govern- ■ ment. Could any honest person com- : pare conditions today with .those of three years ago and find real grounds for criticism of the present Government? he asked. Was there any com- • parison? < "But there is a lot to be done yet," ■he continued. "We don't claim to i have done much yet. Possibly we have k cleared the decks. There has been a E big change, but I hope there will be a ■ still bigger change in the next term." i CONSIDERABLE SAVING. Dealing with the Government's finan- ' cial policy, the Minister said that the • 1935 to 1936 London loan of £10,135,000 [ St 5 per cent, had been reduced to ' £8,000,000 and by conversion interest ' had been lowered to 3 per cent., so ; that there was a reduction of ; £2,135,000 in principal as well as a ' saving of £266,750 in the overseas in- ) terest bill. There were unavoidable | costs in .doing this—the cost of conver- , sion, exchange rates, and remittances. ' These items totalled £1,720,000. All this had been transferred to the Post Office Account. In other words, the Government had transferred the debt account to New Zealand. Seeing ; that there 'was money idle in the Post Office Savings Bank lying to the credit of the people and earning interest, the Government had intelligently used the money for that purpose, so that instead of paying interest to people overseas it was paying it to its own people. New Zealand money was therefore Credited with interest which formerly went outside the country, thus conserving for all time the national-wel-k fare and reducing overseas liabilities. In 1936 the London loan ,of £5,869,988 "at 6 per cent, had been reduced to ' £4,000,000. at 3 per cent.,, a reduction - in debt of £1,869,988 arid, in interest of : £232,199 a year. '• The total saving in u the overseas interest bill was £498,949. u "In these two items alone," this Minister said, "taking the exchange into ; consideration, we have a definite, sav- : ing of considerably more than £500,000 - a year in perpetuity, a reduction of > the overseas debt by approximately i £4,000,000, -and a saving of over - £500,000 in interest charges. : "Contrast this with the previous ad- ■ ministration's efforts. 'From 1923 to > 1929, years of high prices and general i prosperity, over £46,000,000 was i raised on the London market at high i rates of interest. On some of this • amount we received only £92 for every £100, although we , paid interest on £100. The under par of these loans totalled £1,800,00.0,. and the. cost of raising them, £3,300,000, making a total of £5,100,000 in dead cost and charges.. During these years, direct income taxation (the nation's free income) was reduced by an average of £4,000,000 per annum, so that while giving away its income, New Zealand was pawned to the overseas money lords. FAST MISTAKES. "We have not borrowed a single penny piece overseas; not , a brass farthing," Mr. Langstone said, "and I want to. say that when ''it- comes to handling finance—not that we .have gone nearly the. distance that Will be necessary, before the. currency "and money problem is dealt with as it , should be—there is no comparison between the Common-sense way Mr. Nash ! and the Government have done it and the way the last Government. did it. ! They, made an unholy mess of it. | They did everything at the wrong time, and. the wrong way, and naturally they got wrong results." It was true that the national debt increased during the year ended March 31, 1937, Mr. Langstone added, but not by borrowing on the London market. On the contrary, the London debt had been reduced, by £4,000,000. The national, debt had been increased by £5,109,102, .including liabilities of £1,670,569 taken over from the Southland Power Board and £1,655,'728 paid for the purchase by the Government of privately-owned shares in the Reserve Bank and the Mortgage .Corporation; Also, about £100,000 had been found for housing. Therefore, of the increased debt of £5,109,102, £3,500,000 was represented, by selfliquidating assets. The balance of £1,600;000 was used for roads, bridges, schools, hospitals, etc. Never in the previous history of the Dominion had finances been controlled, used, and husbanded with greater care and efficiency than during the term of office of the Labour Government. ' ''' .■