INDEBTEDNESS.

Evening Star, Issue 19518, 28 March 1927, Page 6

INDEBTEDNESS.

It was doubtless gratifying to learn that the London ‘ Financial News ’ has declared editorially that “ there is no dominion which has been more scrupulously careful over its finances than Now Zealand.” This statement was made after an interview with Mr R. E. Hayes, Secretary of tho Now Zealand Treasury, which had the familiar ring associated with Ministerial speeches. Out of curiosity we turned up figures in the 1927 issue of tho New Zealand Year Book. This shows that our net indebtedness in twenty years has been almost quadrupled. In 1907 it stood at £62,136,972, and in 1926 at £230,581,216. The war is one explanation of the tremendous debt development over a score of years, but it is worthy of note that in 1919 the debt stood at £170,125,204, and its increase since then exceeds the total amount of debt (over sixty-two millions) which New Zealand had incurred up to the year 1907. Furthermore, the increase in debt between 1925 and 1926 amounted to over £22,000,000, which, with the exceptions of the two immediately post-war years, is a bigger jump than has ever been recorded. The ‘ Financial News ’ also emphasises that “sinking funds have been provided for all debts, which should be extinguished in sixty years.” Our Year Book states the amounts, also, for purposes of comparison, those of tho Australian States and the Commonwealth. With the glaring exception of New South Wales, which lias only somewhere over half a million sterling in sinking funds against a debt of over £215,000,000, the other States, though not the Commonwealth, appear to have made better provision. While New Zealand has accrued sinking funds of £2,274,262 for a gross debt of £233,855,478, Victoria lias £4,084,796' of sinking funds against a gross debt of only £131,169,565, while Western Australia has no Jess than £10,183,347 against a gross debt of £64,493,261. Taking the net indebtedness per head of population we find that in Now Zealand it has risen from £64 12s 4d per head on March 31, 1907, to £167 16s 3d per head on March 31, 1926. The average indebtedness per head in Australia is £162 17s lid. Of this amount the Commonwealth Government is responsible for £72 6s 4d per head. In Victoria, which is the State most comparable with New Zealand for size, population, and resources, the State indebtedness per head is £76 Is 2d, making the total net indebtedness of the Victorian unit of population only £l4B 7s 6d, as against our £167 16s 3d. But the latter figure represents only the indebtedness incurred by the Government. There is in addition the local bodies’ debt—municipal, harbor boards, and power boards. This (exclusive of Government loans to local bodies, so that duplication is avoided) totalled £51,726,897 on 31st March, 1926, being an increase of over six millions on tho previous year’s figure. This equals £36 15s 2d per bead. This added to £167 16s 3d for general Government debt brings the total indebtedness per head to £204 11s sd. Possibly some deduction may be allowed for accrued sinking funds in connection with local bodies’ debts, but it is quite safe to say that indebtedness per head exceeds £2OO in New Zealand on general and local government account. Tho only consolatory feature is tho amount of the.debt held in New Zealand. Out of over £238,000,000 Government debt about £107,000,000 is held in New Zealand, and over two-thirds of the local bodies’ debts is held here also.