THE LAST LOAN.

Hawera Star, Volume XLVII, 25 May 1928, Page 5

THE LAST LOAN.

GOVERNMENT’S BORROWING POLICY. MR, W. J. POLSON S CRITICISM. TKOSGIiAPU—PUKBS ASSOCIATION .J HAMILTON, May 23. Mr W. J. Poison, Dominion President of the Farmers’ Union, vigorousiy ataclced the Government’s borrowing policy, when addressing the Provincial Farmers’ Conierenie this afternoon. He said that during the period since the war New Zealand had been increasing the National Debt, that is the public debt, at the rate of nearly ■6 1,0)0,000 a month. The interest rate was a.so increasing. The gross National Debt on March 31, 1921, was Eg0fi,324,0J0, and the amount borrowed since was £44,680,000, bringing the debt to £245,860,000 in 1927. Mr Poison also detailed the local body debt, which, added to the amount borrowed by local bodies from the. Government in 1927, had reached the extraordinary total of £64,000,000. It was quite obvious that renewals off these loans must mean an increased rate of interest, in spite of the recently made boast about the success of the last New Zealand loan. This loan Mr Pclson described as “a fuss about 4d.” ;;ecause the net yield to the investor was £4 19s Bd, whereas in the case of the Commonwealth’s last loan, more recently floated than New Zealand’s the net yield to the investor was £5, a difference of iourpence. Banking authorities showed that in the last four .ears all issues had participated in a general improvement, New Zealand among them. ■ ‘ The next four years the Government has maturing £87,475,000 worth of loans, which have to be renewed,” he said. “This means increased interest charges on renewals alone -in the next four years of over £4;400,000 in ■ addition to new loans estimated by the 3overnment to mean another £1,000,XX) interest- in the next five years.-' In i speech in reply to me, the Hon. W. Downie Stewart admitted that the imports must pay for the exports, and .should slio.w sufficient surplus to pay also for overseas loans. This is just my point. Now he claims credit for the import of capital without a debit for borrowing. This is most extraordinary book-keeping for -the Minister of Finance. He forgets he borrowed 12s 6d worth and must.pay- back £1 and suggests he borrowed £1 and would only have to pay back 12s 6d. “Taking these figures into account, we find the borrowing rate of the country enormously increased since tlio war. . “In the reply of Mr David Jones on behalf of the Government to my Masterton speech, it is stated I ignored the fact that import values are loaded with 10 per cent. The loading is intended to cover, in part, the cost of transport, freight, insurance, etc. He s apparently under the impression that we get our transport done for nothing. To eliminate it would- falsiv the figure, and as a matter of fact U) per cent, is mot nearly enough to -over the charges. “In the 1924-25 Year Boole the Government Statistician gives an estimated balance-sheet of . debits and credits of the New Zealand estimates, height, insurance and exchange are it 20 per cent, of imports. The agtre onto of imports from 1921 to 1927 vas £317,609.000. This gives . £28.,317.000 as the added amount for reiglit over the period. If the basis idopted by the Government in this irade balance statement is correct, then the sum of £29,000,000 must he added to imports to get the balance of height- charges. For the period this void'd make my , figures all the . more ’ormidable. It would be interesting to know whv these statements from the Tear Book were dropped after two ears.”