POLICY OF BORROWING.

New Zealand Herald, Volume LXIV, Issue 19719, 19 August 1927, Page 13

POLICY OF BORROWING.

LOANS FOR PUBLIC WORKS.

MAKING THE USERS PAY.

MR. COATES DEFENDS SYSTEM

[BY TELEGRAPH.—SPECIAL REPORTER.] WELLINGTON. Thursday. The Government's policy in construe, ting public works out of loan moneys and in depending on the local taxpayer to find the funds required to carry on the ordinary works of th© country was defended by the Prime Minister, Mr. Coates, in the House this afternoon, when replying to critcisims of the Leader of the Opposition, Mr. H. E. Holland, on the Budget. Mr. Coates credited Mr. Holland with asserting that the solution of the country's financial problems was a reorganisation of the finances so that borrowing from outside sources would be sfopped and the national debt gradually reduced. "How on earth can you reorganise the finances of the Dominion in such a way and carry out the essential progressive public works?" asked Mr. Coates. "How will we pay off the national debt in that way ? I believe national development works, such as hydro-electric undertakings, telephone line construction, railways and irrigation works, should be done out of moneys borrowed outside tho country, but so far as our internal affairs are concerned we should depend on ourselves. The Cheapest Method. How could we construct railways and telephone lines out of our own wealth ? That could only be done by a tax on our wealth or by the lietterment system, but could wo ask the settler in the back blocks to pay for his lines when the rest of the country have had theirs paid for by the community as a whole?". The Prime Minister said he believed in the principle that the user should pay. By that he meant not only the interest on the capital invested, but the sinking fund as well. That was perfectly sound and public works could be done cheaper that way than by any other method of finance. Any suggestion that the public works should bo constructed out of the country's own wealth seemed to him to be simply drawing a red herring across the trail. It could not be done. Mr. M. J. Savage (Auckland West): Can't we pay our debts? The Commercial Aspect. The Prime Minister; We can and we are doing so, but we must retain the -commercial sense, that these undertakings must pay the proper rate of interest. In my opinion it is entirely wrong to call on tho consolidated fund or the taxpayer for the money for public works. Ihe erection of public schools is a matter for the taxpayer, for they are not commercial institutions. In a similar manner the hospitals must be paid for by the taxpayer, but people who receive treatment in them and are able to pay should be made to do so. Mr. J. McCombs (Lvttelton): We are building schools out of loan money. The Prime Minister: Yes. Do you object ? Mr. McCombs: No, but you said the taxpayer was paying for them. Mr. D. G. Sullivan (Avon): Your point is that the country lias not the wealth necessary for these works ? Mr. Coates did not pursue the subject further.

TOWER FROM ARAPUNI. EXTENT OF THE DELAY. EARLY STATEMENT SOUCHT. [BY TELEGRAPH. —SPECIAL REPORTER.] WELLINGTON. Thursday. Information concerning the progress at Arapuni was sought in the House to-day by Mr. M. J. Savage (Auckland West), who gave notice to ask the Minister of Public Works if it was true that considerable delay was likely to*bo experienced in completing the hydro-electric scheme, and, if so, what extra cost, if any, would thereby be incurred by the Government. Mr. Savage also wanted to know what steps were being taken by the Government to provide electricity to those who were depending on the Arapuni schemebeing completed within the specified time, and what extra charges would be made for any electricity so supplied. The * Speaker suggested the information desired by Mr. Savage should be obtained through a return rather than •n a question to the Minister. Mr. Savage: I had hoped the Minister would have made a statement on the subject, as there is considerable uneasiness on the subject. Mr. Savage agreed to call for a return and intimated that he would bring thfe matter forward again. TWO KINDS OF SHARKS. SEA AND LAND VARIETIES. [BY TELEGRAPH. —PRESS ASSOCIATION.] WELLINGTON. Thursday. In opening his speech in the Budget debate in the House this evening, the Minister of Finance, Hon. W. Downie Stewart, said it was impossible for him to reply to all the 50 speeches which had been delivered during the debate. I'or instance, one member said there were too many sharks in the Hauraki Gulf, but the Government could not be expected to look after sharks in the sea. They had enough to do to look after the land sharks.