ABILITY TO PAY

Nelson Evening Mail, Volume LXXII, 13 December 1938, Page 7

ABILITY TO PAY

THE NATIONAL DEBT PROBLEM FOR THE FUTURE IS THERE A LIMIT? I United Prese Association! CHRISTCHURCH, 12th December What are the probabilities and possibilities of debtors paying their creditors? Is there such a thing as a limit to a nation’s indebtedness? How much can a Government take by way of taxation without crippling the inhabitants of a country? These were questions discussed by Mr 11. Kitson, chairman of the Christchurch Stock Exchange, Ltd., in his address at the annual meeting of the exchange today. “One has only to think back,” Mr Kitson said. “In 1640 it was thought by patriots that £1.000,000 a year would beggar England. A little more than 100 years later all the statesmen in England cried in chorus, ‘£240,000.000 of debt! What abilities or what economy on the part of a Minister can save a country so burdened?’ In New Zealand the indebtedness of the general Government has more than doubled itself in 20 years. Those debts to each generation seemed intolerable, yet proved readily bearable because they were incurred in an age of expansion of productive resources and of population.

4/ In New Zealand from 1901 to 1911, the increase of population was more than 24 per cent per annum. This fell to 2 per cent in 1927, and has since declined in the five years 1931 to 1936 to .7 per cent. It is clear that unless some great change quickly takes place, either voluntary or from Government initiative, the popualtion of New Zealand will be in a decline by 1970. If present trends continue, we must have a growing proportion of older people and a falling proportion of younger people, and as the percentage of old people increases, so also the death rate will gradually rise.

“Therefore we are faced with (1) a rise in the cost of social services, but a decline in the cost of, for example, education and child welfare: (2) a reduction in the Dominion's productivity to the extent that the fall in the number of workers is not offset by increasing mechanisation; (3) a total national debt spread over a declining number of persons, of whom the proportion of actual or potential producers would be declining even faster.” VERY REAL PROBLEM The problem of fitting an expanding debt to declining numbers was a very real one, Mr Kitson said. The problem was somewhat remote, but not so remote that a young man saving now against retirement 30 years hence should not take it into account. That downward trend might be considerably accelerated by young men and women leaving New Zealand. A pension by a benevolent government at the age of 65 had but little attraction for the vigorous youth of this country. “I am now, perhaps, one of the old men, but I have unbounded faith in the young people of this Dominion,” he added. “I still believe that the majority of young people want indepen | nee, freedom and the right to make their own way in the world. New Zealanders are able to give and take hard knocks and do not require spoon feeding.

“Is it lair that youth should have thrust upon them the appalling burdens that the old men of this country are storing up for them? A hope of a meagre pension at the age of 65 and the promise that they will not have to work or strive as hard as their ! parents did is all that can be put in the scales to even up our egotistical selfishi ness. Can we blame our sons and | daughters for wanting to leave New j Zealand and match their strength and I vigour with other people in a world where ability is rewarded and not kept back because all must be measured by j a yard stick? | “It is perhaps the fashion of the I moment to sneer at brains and praise muscle. Both are essentials in a balanced community and severe unbalancing spells disaster to any country.”