COST OF THE WAR

Nelson Evening Mail, Volume XLVIII, Issue XLVIII, 31 March 1915, Page 3

COST OF THE WAR

DOMINION'S FINANCES

WAR TAX QUESTION

GISBORNE, March 24. Replying to a deputation which waited upon him to-day, the Hon. Jas. Allen, Minister for Defence, made some interesting statements. He said that an officer of the Defence Department was being instructed to ascertain the total amount that had been given in money and goods. He was anxious to know the total value of donations in ca-sh, equipment, and goods, and that information would be collected and published so that all would know what New Zealand had done. In addition to from £SOOO to £IO,OOO per month for the Belgian funds, the Dominion had to find about £300,000 every month for war purposes, and the Minister did not see much prospect of that amount dropping. However, he did not think it would increase. They were safe in assuming that they would have to provide this £300,000 a month for senate months to come, and so, by the end of the year, if the war continued that time, New Zealand would have had to find £5,000.000. To provide interest and a certain amount of sinking fund would require probably nearly £500,000 a year, or getting on for that. Whether they would want more than that by way of new taxation, it was not for him at present to say. Only they would recognise that the country in time of war must expect that its revenue would suffer. The Minister anticipated that the railway revenue would not reach by £IOO,OOO the amount of the* estimate, and he did not know what the Customs deficiency would be—probably £200,000 or £300,000. If that was so it might be necessary to make up by extra taxation the ordinary revenue of the country. That was the prospect before them. As far as the original war lpan was concerned —and the two millions were already about spent—it was raised on exceptionally easy terms, -exactly on the same terms as the Mother Country raised her war loan. With Tegard to'the future, similar arrangements had been made—that they should pool their war loan with the Mother Country, and raise it at the same rate. They had, obtained money at a cheaper rate than before the war broke out. .Such a comfortable position did .lot exist in regard to loans required for newworks. The Minister did not expect that 1 thev could get money in London at less than £4 17s or £4 17s 6d per "cent., which was 10s or 12s per cent, higher than had been paid in the past. That would mean a heavy burden cn the country. Even though that were so, and even if they had to go to the London market and pay high rates, it was essential from the Government, point of view to keep the works going in order not only to develop the country, but to prevent any possibility of unemployment. He thought he might safely say that there was no very urgent need for them to go to the London market —at any rate for a few months <to come. The evidence of prosperity was astonishing. The Post Office Savings Bank accumulations allowed them to carry on certain works, requiring borrowed money, without_ going to the London, market. It might be that v they coxild avoid the London market for many months, and still caTry on at the rate at which they had been Roing-