BUDGET DEBATE

Gisborne Times, 13 October 1932, Page 5

BUDGET DEBATE

MR. HOLLAND AND THE DEFICIT.

RESERVES USED' TO REDUCE

AMOUNT

MONEYS BORROWED ON PUBLIC CREDIT.

“TRIBUTE TO THE BANK

(Press Association.': WELLINGTON, Oct. 12. Continuing the Budget debate, the Leader of the Opposition said the Budget disclosed a deficit of £3,635,614, which did not include the huge deficit in counectiou witln the Superannuation Funds. The. Government had proceeded to raise money by mortgaging to the bank public securities represented in the Discharged Soldier Settlement lands,. In this way it had secured advances amounting to £1,49-1,825 and the Government wrote tins into its balance sheet as income. This made it possible to present a deficit of £2,140,819 only instead of the correct figure of £3,635.644. It would be seen that the public securities were being used to meet current liabilities. The bank bad issued iuone v to the Government on the basis of these securities—in order words, with tho backing of the public credit and would charge interest (pi. the money so issued. Before the* Government could utilise its own credit resources to meet cur rent liability. it had to contract t 0 pay a percentage tribute to the batik. He asked whether the Government could not have utilised, its own credit resources to back its own issue of money without, paying tribute to the bank Furthermore, if a deficit could he made good out of reserves, those reserves could have been utilised long ago to provide remunerative work for the unemployed and 'the creation of additional values for the State.

Dealing with the Expenditure Commission's recommendations regardi iig the State superannuation funds, Mr. Holland referred to the statement that there was a total actuarial Lability of the Government of approximately £23,000,000. He said that the Act provided, that, fix the month ox January in every year, the Minister for Finance -should pay into Ixe fund and out of the Consolidated bund the sum of £20,000 together with such further amount (if any) as 'was required to meet the charges on the fund during the ensuing year. Jim Government had never honored -t----obligatior.s in this respect. So tong as the present default continued the position would grow worse. Mr. Holland declared that the Commissioners had commenced their attack on ilic child at birth and pursued it to the grave. He dealt with (lie recommendations relating to the reduction in maternity allowances and the Blanket Society grants, the abolition of family allowances and various other changes proposed, adding. ‘'‘Their demands are carried even beyond the grave and make reference to a saving of £15,375 on the maintenance of overseas graves. ’

Mr. Stuart: (C) said that lie was disappointed that the Prime Minister was not. taking further action, to reduce interest rates because, at present, the rates were so high that practically no one could afford to borrow and it would take the country years to recover.

AIR. COLEMAN OBJECT'S TO CENTRALISATION.

Mr. Coleman (L) objected to the centralisation of the Government departments as recommended by the Expenditure Commission. He said that, in any scheme of centralisation, there would be the initial cost involved the transfer of the staff' and records and it would he a considerable time before any saving could be made and, in the meantime, the public would be put to great inconvenience.

Air. Broadfoot (C) expressed the opinion that- hospital rating should he on a per capita basis and not on a land basis. He said that, under the present system, people in tho boroughs and cities were receiving undue preference over those out back.

'flic debate was adjourned on the motion of Air. Jordan.