Manawatu Evening Standard. FRIDAY, JULY 25, 1924. A GOOD BUDGET.

Manawatu Standard, Volume XLIV, Issue 1077, 25 July 1924, Page 4

Manawatu Evening Standard. FRIDAY, JULY 25, 1924. A GOOD BUDGET.

The Financial Statement presented to ! the House of Representatives Isy the Minister of Finance on Wednesday makes good reading. It discloses, without unduly or unnecessarily emphasising, the sound position of the Dominion finances and the very high opinion entertained by British financiers and the British public generally of New Zealand as a profitable source of investment. With much of its contents we were already acquainted, as i.ho result of the year’s financial operations were published several weeks ago, when there was seen to be the very substantial .balance of £1,812,365 in the excess of revenue over expenditure. In his analysis of the figures, however, Mr Massey presents matters in an even more favourable ljght than they appear on the first perusal of the facts. The earlier statement of tho public accounts merely showed the receipts and expenditure in connection with the Consolidated Fund. W'e now have the details concerning the public debt and the war debt, tho purchase of free-of-income tax securities, the application of capital re-payments to redemption purposes and the Imperial debt repayments, having reduced tho net debt in the latter case by £3,652,087 during the twelve months ended March 31st last, thus making a total reduction of £6,279,673 in the net war debt during the three years in which Mr Massey has made it his business to btiy up, as far as possible, such war stock as might come on the market. The gross public debt, in which the war debt is, of course, included, shows an increase of £2,663,037 as compared with the amount outstanding on 31st March, 1923, but the net increase is only £1,568,265, the sinking funds having advanced from £11,879,256 to £12,974,028. On this point Mr Massey remarks: —

“In 1922-23 the net debt showed a decrease of £1,324,923, notwithstanding the fact that £5,234,818 had been borrowed and expended for public works and other purposes. I have pleasure in recording that the operations of the year 1923-24 disclose a somewhat similar result. The sum of £2,679,450 was loaned out of the accumulated surpluses and other accounts to the State Advances Office, and, as the securities issued by that office are charged against the debt, an increase is, therefore, disclosed by the accounts. If, however, this amount is excluded the gross debt shows a decrease of £16,413, added to which the sinking fund contributions and accretions, amounting to £1,094,772, reduce the debt by £1,111,185, although £4,000,000 was borrowed for works and settlement purposes.”

It will be thus seen that Mr Massey has put up the unique record of reducing the net debt by £2,436,108 in two years, while borrowing during the same period some £9,834,818, which has been applied in helpful directions on public works and in State Advances, etc. The net debt stood at £208,398,991 on the 31st March, 1922, and deducting the £2,679,450 increase in the State Advances debt on March 3ist last, it was reduced to £205,962,883 on that date, the decrease in the net debt for 1923-24, excluding the amount borrowed for State Advances purposes being, as already stated, £1,111,185 —a very satisfactory result. It is equally satisfactory to find from Mr Massey’s statement that the very substantial reduction of £10,742,760 lias been made since 1921-22 in the amount of free-

of-income tax securities, which stood at £51,733,405 in that year and now stand at £40,990,645. Mr Massey’s stewardship of the public finances in this direction could hardly bo bettered.

LIGHTENING THE TAXATION LOAD.

It is, of course, no news that Mr Massey is out to lighten the taxpayers’ burden. One several occasions he has intimated of late that, following last year’s reductions, he hoped to be able to dlill further reduce taxation this year. That hope finds fulfilment in the promise, now definitely made, chat; Parliament is to be asked to approve of further remissions. “On the present basis of taxation,” Air Alassey stated, “the revenue for the current year would probably produce £28,357,--620, whilst the expenditure is estimated at £27,505,060, leaving a credit balance of £1,352,560. The remissions made last year are valued at £1,200,000, and this year, after providing for interest and debt-reduction charges, as well as for the efficient and economical administration of departments and services, I hope to be üble to ask Parliament to reduce the burden of taxation by about £1,000,000, particulars of which will be supplied in the legislation ■ dealing with the subject.” Air Alassey, however, finds it necessary to reiterate t.he warning to “those who, indifferent to tho cost, and unable to say where the money is to come from, clamour in one voice for increased expenditure and a reduction in taxation, that they cannot have both. As the population grows and the national wealth increases,” it is inevitable (as Air Massey further says) that “the expenses of government, no matter how econonomically administered, must expand, but that expansion must not be greater than the increase in income. There should (he adds) he a sufficient margin to ensure safe finance and to provide some contribution towards reducing the dead-weight of our war debt —one of tho best means ol easing the taxpayer.” The note of caution thus sounded is amplified in the closing remarks made by the Prime .Minister who, in speaking of the suggestions that have been made with regard to borrowing a large sum of money for mortgage purposes, says: “It is my duty to point out that this is a matter about which we require to be very careful, if we are to maintain our credit in London. The credit of New Zealand stands high at present, but any appearance of recklessness or extravagance in finance would have a very bad effect and must be avoided by every means possible. ... I want particularly to strike a warning note about over-borrowing, and, in doing so, I admit that we cannot go on developing without a certain amount of loan money, but it has to be remembered that every million borrowed increases the annual charge upon the country and the burdens upon the taxpayer. This is the case whether the money is borrowed by the General Government or the local bodies; the effect •is the same. Care should be taken, therefore, to see that borrowed money is, as far as possible, used only for revenue-earning purposes,” and this Air Alassey claims is the policy liis Government lias followed since the war —“that of building up against the public debt a collection of assets which will go a long way towards providing the interest and sinking fund on the borrowed millions.” The Government lias been blamed for its alleged failure to provide for the housing requirements of the people, also for tho alleged inadequacy of its arrangements to meet the demands for loans made to the State Advances Office. In both respects, however, it lias done a great deal more than could reasonably have been expected of it. Since 1919, it lias provided £18,72(1,00(3 for the erection, or purchase of some 30,459 houses, apart from moneys advanced to release mortgages on house property, the amount expended last year being £3,908,719, which covered the erection, or purchase, of 5259 houses, while, in addition. £66,010 was paid over to 41 local bodies for housing. The State Advances Department provided £6,205.686 during 1923-24 to meet the demand for 10an5—£3,904,150 to settlers, £1,863.331 to workers, and £438.205 to local authorities, further advances to the amount of £561,350 being nfade to settlers, £475,360 to workers and £69.925 to local authorities, being provided during the three months ended June 30th, 1924, bringing the fifteen months’ total up to £7.312,321, and establishing a record which it would bo hard for anv Government to beat.