PUBLIC DEBTS.

Lyttelton Times, Volume CXVIII, Issue 18413, 20 May 1920, Page 4

PUBLIC DEBTS.

Standing by itself, the cabled statement that the public debt of the Australian Commonwealth now amounts to £345,120,000 is likely to mislead. The- figure named is tho amount that the people of Australia, through their Federal Government, are responsible for, hut it does not represent the national debt of tile nation. In addition to the Commonwealth public indebtedness there is that of the individual States. The public debts of the six States amounted to £396,356,000 at June 30, 1919, less some eleven millions of accrued sinking funds. The total public indebtedness of Australia at ti e moment is, on paper, in the neighbourhood of £750,000,000, or about Cl5O per head of the population. This, however, rather overstates tho position, because part of the States’ debts consist of borrowings from the Commonwealth Government, so that by simply adding together the Commonwealth and State debts an error is made in counting some of the indebtedness twice. Now Zealand’s per capita debt is undoubtedly much higher than Australia’s but against this our production and wealth are also relatively much superior. The bulk of tho Commonwealth debt—as apart from that of the States—has, of course, been incurred during and on account of tho war. An important redeeming feature, from a national standpoint,, in respect of both Australia and New Zealand, is that the greater part of the war debt was raised locally. Its service charges and redemption will therefore, to that extent,' not he a’drain upon the nation, because the community that pays the charges will also receive them. For instance, about half of New Zealand’s public debt was raised in the Dominion—the actual proportion was 43.72 per cent at March, 1919, and it must have grown since then. So that while the Treasury has to pay out, say, six millions a year for interest on debt, and has first to collect tiffs from New Zealand taxpayers, it must be remembered that about half the money is returned to New Zealand lenders. 7 his may he less comforting to the laxpayers than to the bondholders, out from the national point of view tho fact remains that the money has merely been redistributed. All tho same, the time is coming when the statesmen of Australia. and New Zealand, like those of Great Britain, must try to devise means of reducing, instead of steadily increasing, the huge public debts that have accumulated because of the war.