HOUSE OF REPRESENTATIVES.

Hawera & Normanby Star, Volume LVII, Issue LVII, 20 August 1910, Page 5

HOUSE OF REPRESENTATIVES.

Sir J. G. Ward moved the second reading of the Rangitikei Land Drainage Bill, the object of which was to provide funds for the drainage of lands comprising 87,100 acres, situated in the Bay of Plenty district. Mr Massey supported the Bill. Hon. A. Ngata said the Native Minister had authorised him to say that negotiations were going on for the acq»isition of 90,000 acres in the eastern portion of the Urewera country. • The second reading was carried. PUBLIC DEBT EXTINCTION BILL. In moving the second reading of the Public Debt Extinction Bill Sir Joseph Ward made a statement dealing with public borrowing. He said there must be a limit to moneys borrowed. In some cases borrowed money was being used over and over again. In one department alone this was done to the tune of several thousand pounds. No one could give an estimate of the total amount required to be borrowed for the probable expenditure on public j works. After carerul consideration he estimated it at under 20 millions, exI tending over 15 years. If the railways authorised for construction were finished at once the cost would be £2,345,000. Railways not yet authorised j amounted to £13,197,000 in the North Island, and £8,887,225 in the South I Island, less two millions to represent the dupli«ation of lines. The amount on roads would be £2,750,000. Telephones and telegraphs for the next five years would absorb £744,000, at the rate of £150,000 a year. After next [year th© country would not hare to j provide more than £100,000 for public buildings. Roads would require an ex- [ penditure of £550,000 on an average yearly for five years. Borrowing on account of railways, roads arid bridges would amount to one and a half millions yearly. At the expiration of that period the amount should be reduced to a million a year. Half a million would come from ordinary revenue, making one and a half millions for the remaining ten years. Borrowing coula not be stopped while railways, roads and other public works were required, but he could look forward to the time when the necessity for borrowing would cease. A period of 75 years was n fair time to fix for the extinction of vie public debt. The weakness of the sinking fund system hitherto had been a lack of continuity or system. The Bill provided for a uniform .system. The accumulations now in the hands of the Public Trustee would remain with him, and the interest would be paid into the Consolidated Fund, and new contributions paid to him. The amount to be paid into the new sinking fund would not be fixed per centage of,each loan, but a sum to be actuarially calculated to the extent of the whole public debt in a *nven time. If the debt ever reached 100 millions the amount required to be paid annually was £223,000. The amount of loan funds would be invested in loans to people in lands for settlement^ which were not convertible securities so far as the Government was concerned. In twenty years the country would have no need to borrow. The argument was pui> forward that because the amounts were transferred to the Public Works Fund from the Consolidated Fund that this was indirect borrowing. This was childish, when it was known throughout the world what the Dominion was doing, as the Dominion stood in a more solid position than ever. Summing up the points in* favor of the Bill he said h© submitted it with confidence to the House, and suggested it should pass for the following reasons: The debt must be paid some time ; no fresh taxation was imposed ; the extra amount to be found was under £12,000 yearly; administration was economical, costing hardly anything; the funds were lent out to their own people; it would assist the introduction of a consolidated measure whereby any short-dated loans can be converted on terms favorable to i;he Dominion; it was intended xo put on a solid basis 75 millions of money, of which 12 millions were already provided for by sinking funds. He defied any accountant, however expert, to challenge him upon any points submitted to the House. He concluded by saying that the laugh from the Opposition side was not the way to treat a proposal calculated to do an immense amount of good to the people of the country. Mr Massey said it was impossible for him or any member of the House to follow the string of figures given by the Premier, and suggested than the debate should be held over till the speech was printed and members had studied it. He would inform Sir Joseph Ward that he and his party had no intention of indulging in personal criticism. The speech was a cross between a financial and public works statement. He objected to money received from the sale of Crown lands being placed to the public revenue. It ought to be employed to purchase further estates. There ought to be a depreciation fund in connection with public buildings. The history of sinking funds in the past was not such as to command confidence. Tlie only way to inspire confidence was to use the funds in paying off debentures on due dates. The object of the Premier was really to find money for State Guaranteed Advances. A financial critic whom he. (Mr Massey) had interrogated described the Kinking fund proposal as "financial thimblerieging." A scheme such as this could not last 75 years without breaks. He meant that on the expiry of loans to settlers or public bodies there would be difficulty experienced in finding fresh investments for the funds. Mr Taylor supported the Bill, and hoped the Premier's optimism was well founded. He considered sinking funds ouglit not to be borne out of wages, but should have been provided by taxes on unearned increment on land^ After some further discussion the debate was adjourned and the House rose at 10.25.