COUNTRY’S FINANCES

Manawatu Standard, Volume XLVIII, Issue 149, 24 May 1928, Page 4

COUNTRY’S FINANCES

MR POLSON’S ATTACK

Per Press Association

HAMILTON

May 23

Air V r . J. Poison, Dominion president of tlic* Farmers’ Union, vigorously aftackcd the Government’s borrowing policy when addressing the provincial farmers’ conference this afternoon.

Mr Poison said that during the period since tho war we had been increasing our national debt at the rate of nearly a million a month. The gross national debt at March 31, 1921, was £206,324,000; the amount borrowed since that date was £44,680,000. bringing the debt to £245,860,000 in 1927. Air Poison also detailed the local body debt, which, less the amount borrowed by local bodies from tlio Government in 1927 had reached the extraordinary total of £64,000,000. It was quite obvious that renewals of 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 Air Poison described as a fuss about Id., because the net yield to the investor was £4 I9s Bd., whereas in the case of the Commonwealth’s last loan, more recently floated than New Zealand’s, the net yield to investors was £5, a difference of 4d. Banking authorities showed that in the last few years all issues participated in tho general improvement, New Zealand among them. “In the next four years tho Government will have maturing £87.475,000 worth of loans which have to be renewed. This means an increased interest charge on renewals alone in the next four years over £400.000. In addition new loans estimated by. the Government mean another millibn in interest in the next five years. In a speech in reply to me, the Hon. AY. Downio Stewart admitted that exports must pay for imports and should show a sufficient surplus to pay also for oversea loans. This is just my point. Now he claims credit for the import of capital without debit for borrowing. This is most extraordinary book-keeping for a Minister of Finance. He forgets that lio borrowed 12s 6d worth and must pay back £l, and suggests that he borrowed £1 and need only pay back 12s od. Taking these figures into account wo find the borrowing rate of the country has enormously increased since the war. in the reply of Mr James'on behalf of. the Government to my Alasterton speech, it is stated that 1 ignored the fact that import values are loaded with 10 per cent. Tho loading is intended to cover in part the cost of transport, freight,' insurance, etc Air James is apparently under the impression that we get our transport done for nothing. To eliminate it would falsify the figures. and as a fact 10 per cent ;,s not nearly enough to cover the charges. In the 1924-25 Year Book the Government Statistician gives an estimated balancesheet of debits and credits of New Zealand. He estimates freight, insurance, and exchange at 20 per cent, of the imports. The aggregate of the imports from 1921 to 1927'was. £JH ,- 000 000. 'l’his gives £28.81 1 ,009 as the added amount for freight over the period. If the basis adopted by the Government ill Ibis trade balance statement is correct, then a sum oi £29 000,000 must be added to the imports to get the balance of freight charges for the period. This would make mv. figures all the more formidable. it would be interesting to know why these statements from the tear Book were dropped after two years.