DOMINION'S FINANCES.

New Zealand Herald, Volume LX, Issue 18404, 21 May 1923, Page 9

DOMINION'S FINANCES.

MONEY FOR EDUCATION.

'A POLICY OF CAUTION.

COUNTRY'S LOAN BURDEN.

REVIEW BY PRIME MINISTER.

During the course of his reply to deputations in Wellington last week, asking for further appropriations for educational purposes, the Prime Minister warned the people that, although the financial credit of the Dominion had vastly imroved—beyond his calculations, in —there was ,i. serious obligation in meeting the loans falling due during the next six years. "' I am very glad indeed," sad Mr. Mas Key, "to acknowledge that the finances have improved in a marvellous manner, compared with twelve months ago. It has given proof of the productiveness of tho country, the industry of the people, andmay I acid ?—the good management of the Government, especially the Minister for Finance. (Laughter.) Tho Minister for Education is a very good. spender, but he is learning experience think ho is turning over a new leaf. (Laughter.) " We have still tremendous liabilities, and there is a great deal to do," added the Minister, as ho drew attention to some of the demands that had come before him. The first and most reasonable was the reduction of railway freights. Tim general manager of railways was now making out, at his request, an estimate of tho most urgent rates which might bo reduced. Penny postage was being asked for, and it was only a question of what date it would be reintroduced. Tho Postmaster-General had been given a certain length of time in which to make the arrangements. Everybody was demanding a reduction in taxation, and lie was convinced that the Dominion would never get. back to real prosperity until taxation was reduced. Huge Loans Falling Due. " I must remind the people, however, of some of our liabilities," said the .Prime Minister.-, Not one person in a hundred knows what they are. During tho next six years wo have to deal with loans falling due aggregating no ( less than £66,450,000. They have to be paid or renewed.' In either case, our credit ha 9 got to be at its very best to arrange these matters satisfactorily. lam not the least pessimistic, because' our credit is so good to-day. You saw the success of our recent loan; any reasonable assistance we shall require from London wo -shall be able to obtain, but it is still an enormous responsibility." The loans falling due were— Year. -.' Amount. £ 1923 .-' »'. >• •* 8,902,000 .1924 . . . - . . . . 9,548,000 19.>„ .. 11,560,000 1905 15,491,000 1927 . . ....... . . -1.342,000 lftS 3,675,000 1929 .. ..-.:- .- 12,926,000 Total . • •'•' 06,450,000 Mr. R. A. Wright, M.P. : You may renew them at a '.lower rate. 'Hie Prime Minister: I will giv©_vou £100,000 to renew at the same rate. Taey were cheap loans. Mr. Wright : You are getting money at 4$ per cent. The Prime Minister: We borrowed at one time as low as 3i per cent. The cost of renewal is very heavy at times, although we have no reason to find fault, we have got the charges in connection with cur loans reduced by 50 per conU recenlly. It is well that our credit is as good as it is. ' .; The Moratorium. The Prime Minister turned to the moratorium, which comes to an end in Decemher, 1524. It was arranged, he said, >to prevent men .with big mortgages being sold out, to' protect mostly small men from the effect of heavy mortgages up to : the end of 1924, That involved Government assistance. Neither of . these was quite so difficult as might appear; it was a question of handling a very great responsibility. Hardship would follow if the people < with mortgages were not helped. It did not apply to all mortgages—only to those arranged prior to October, 1919. A great many had already . been . arranged between the parties, and help from tho moratorium was not needed. " We have to go ouietly and cautiously. It is quite impossible to meet the demands that are coming to me as Finance Minister. If we were to authorise all the expenditure involved in . them, we should land the country into a depression that might-be as bad as the one that has passed. We have increased the expenditure on education by two millions since the ' first year of the war. Nobody will deny that wo must provide for education, but the official records show that we have built 636' schools in three and a-half years. Cabinet will decide how much money there will be' available for education; wo hope to be able to do that pretty soon. But it is no use my promising money now, when something might happen in the next few months. - .'•-, Urgent Oases First. " We- propose to go into the most ur. gent cases and provide money in proportion to their urgency and the necessities of the immediate district asking for buildings. We will do our best, but we cannot provide all the money asked for now. " A great deal of the. money was owing in New Zealand,"'said Mr. Massey, supplementing his remarks on the loans to another deputation later in the day. He did not know whether he could make arrangements in Now Zealand, but one year had already been arranged. The million borrowed for loan redemption would ho apportioned ,to the second year ; that is. 1924. England was able to bring the moratorium to an end, because there were large sums awaiting investment. It was just a matter of saying that the moratorium was at an end, and mortgagors made new arrangements, for there were plenty of mortgagees to meet them. This was not tho case in New Zealand: the moratorium went on till the end of 1924, and a hus/e amount was involved, although tho position was not so bad as it- looked. For the smaller man, up to £3009. the Government would be able to arrange, always understanding that tho security ■was good.