THE NEW LOAN POLICY.

New Zealand Herald, Volume XXIII, Issue 7593, 24 March 1886, Page 3

THE NEW LOAN POLICY.

TO THE EDITOR. Sib,---My last letter dealt with the expenditure from revenue. A clear view of the expenditure from loans will be equally important, and with your permission I will take it for the current year. The total if £2,150,240, divided as follows : £710,000 Now lines of railway and additions to lines already opened. ! £268,000 Permanent my, deepen, and toWagStock. , , £1,012,309 Koa4a witer-neei, lighthouses, harbour J. buildings telegraph!. Immigration, '5 d hubonr defence. t [£23,931 Departmental expenses for the year ' Charges and expenses in raising loan*. £71,000 For purchase of native lauds. * £2,150,240 It will be observed that less than one-half of the appropriation is for railway* The other half is for purposes useful enough no doubt, but which contribute little or nothing from their own profits towards the burden of interest they entail. In all well-regulated States, works of this kind are either paid (or from revenue, or ate deferred till soma more convenient season. The sums dealt with under subsidiary headings are in themselves considerable. Roads for the year absorb £551,314 the public buildings, £144,518; the lighthouses and harbour works, £15,510 ; and the harbour defences, £225,000. It is impossible to go at any length into details. A few cases token at random must suffice to illustrate the general character of the expenditure. Thus, the appropriations for roads include the largo sum of £243,329 for grants in aid to Local Bodies. These grants were originally to be provided from the savings to be effected by centralisation and from the land fund. They have, instead, assisted in swelling yearly the public debt of the colony A further sum of £82.432 is appropriated "to open up Crown lands for sale.'' When these lands are sold, the advance is not recouped to loans. The proceeds go intact to credit of the revenue. This vote and the vote for native lands purchase, become really grants in aid from loans to revenue. They, too, remain a permanent addition to the burdens of the colony. For the road from Hokitika to Chrisfohurch the sum of £13,000 is voted for the year; for the road between Nelson, Weatporfc, Grey, mouth, and Hokitika, £8500; and for repairs to the Inangahua bridge, £500. Other snms a,re appropriated for like purposes, largely //or maintenance and repairs. Can there be a doubt that these appropriations should be from revenue and that they are improperly charged to loans ? Then we have the " Miscellaneous Roads and Bridges" absorbing £73,974. They range from £44 for contribution to the Hamilton bridge to £15,000 for the road "Kaikonra, to Waiau." Nothing from revenue. All from loans.

The Thamee gets £10,000 fora water-race, and the like sum is voted for a race at Mikonui. When these votes are expended, we shall have, in the oolony, water-racee that cost £565,129, and entail a charge of at; leaf it £25,000 a year for interest, flow many of these contribute from their profits one farthing in reduction of this charge ? Only the initiated can say, and only the initiated can also say how the £52,000 voted for goldfields roads is spent—how much goee to new roads, how much to repair old ones, and how much as salary to Chairmen of County Councils and in other ways. The Telegraph Department takes £32,200, of which £15,900 is for "instruments and material." In no other British colony can I find charges of this kind from loans. Why should it be otherwise in New Zealand ?'

Public buildings are a large item, amounting %o £144,500. Of this sum. school buildings for the year take £68,000, given to Education Boards to spend without responsibility. The remaining £76,500 is'appropriated to other public buildings, from the poorest little " look-up," oonrthonee, or police station, to the most stately of our public offices and central prisons. Not a single building, email or great, is paid for from revenue—all from loans.

We go so far that the small eumj of £1065 to provide " implements" for the u«e of the prisoners working on the roads in Lyttelton, and £2000 to provide •• lithographic machinery and printing office" are voted from loans. The implements and the machinery will be worn out in a few yean. The interest on the coat will be a memento for generations.

Enough has, I hope, been said to make clear the general nature of this expenditure from loans. Ministers have long been in the habit of throwing upon them juet what expenditure was necessary to put a good face upon things and make ends meet. The process is styled in official phrase, "establishing an equilibrium between revenue and expenditure." The practical result is a constant and dangerous growth in the publio burdens of the colony.

So long as Ministers retain and exercise this dangerous power, so long will it be impossible to regard in a serious ligluthe " surpluses" over which Treasurers now and then crow. During the last fifteen years the colony has revelled in many of these surpluses. Yet the debt has gone on ewelliog, and the burden has become heavier eaoh year. The cause is, clearly, the outlay of borrowed money for wrong purposes Until thie cause be removed, any solid improvement is hopeless. The objects for which we aro to borrow must be defined and limited. Therein lies the real difficulty, and, until it is faced, I venture to eay that disputes as to the mere rate per annum at which we shall borrow have no meaning and are of email conoern.—l am, &0.,