DOMINION’S FINANCES.

Hawera Star, Volume XLV, 22 October 1925, Page 5

DOMINION’S FINANCES.

ACCUMULATED SURPLU SES. GOVERNMENT'S POLICY EXPLAINED. (BY TELEGRAPH PRESS ASSOCIATION.) ASHBURTON, Oct. 21. 'Speaking to-day regarding the accumulated surplus and Public Debt, the Hon. W. Nos worthy said : “It is, I think, fairly generally known, that our expenditure eurplusses of revenue over expenditure have been applied to capital purposes, such as debt reduction, Public Works, discharged soldiers’ settlement, etc. There apears to he, however, an impression in some quarters that amounts transferred from the accumulated surplus have been added to the Public Debt, but this is quite erroneous. In some cases these transfers have been treated as advances, and interest is paid on them to the Consolidated Fund. This is the case with the £13,500,000 advanced to the Returned Soldiers’ Account. That account pays £540,000 in interest _ to the Consolidated Fund, but the capital sum advanced does not appear in the Public Debt table. Public loans have been raised for the settlement of discharged soldiei-6, hut they are additional to the amount transferred from the Consolidated Fund. As a matter of fact, the total capital involved in the settlement of discharged soldiers is about £26,500,000. Reserve surpluses over the last 10 years amount to £28,000,000. As already indicated, £13,500,000 have been devoted to the settlement of discharged soldiers. In addition, £2,600,000 has been used for Public Works, £1,200,000 to build the reserve fund up to two million's*, and oVZr six millions has been applied to debt reduction. A further sum of £375,000 has been invested in Bank of New Zealand shares. These transactions, apart from increase in the reserve fund, have *on the one hand saved increasing the debt by over sixteen millions, and, on the other hand, have secured an actual reduction in debt of about £6,000.000, in short, equivalent to a, total debt saving and reduction of £22,000,000. As a result of using the surplus for capital purposes in these ways, the Consolidated Fund, and consequently the taxpayer, benefit to the extent of about £1,175,000 per annum, which is a very sound and satisfactory state of affairs.”