UNITED PARTY FINANCE.

New Zealand Herald, Volume LXV, Issue 20098, 8 November 1928, Page 10

UNITED PARTY FINANCE.

The criticism of the United Party's financial proposals has been crystallised into live simple questions addressed to Sir Joseph Ward I»v his opponent in Invercargill. The contention that, there would be a large annual loss on the borrowing and lending of £00,000,000 on the terms proposed has been supported by an analysis in detail of the various factors involved. On the most liberal estimate, an annual l<>ss of £loo,onO was demons! raled. That conclusion has nevei been seriously challenged : Mr. Macalister has invited Sir Joseph Ward to present a precise statement of the means by which the lending of money at less than its cost can be reconciled with the aflirmatioii that no loss would occur, lie has. however, already admitted that the problem cannot be solved, and has suggested that instalment repayments of the advances should be used to cover the deficiency, slat inn that at the end of the period, only £ 10,500,000 would remain against the State's indebtedness of IjOO.OOi 1,0(10. That explanation suggests that there can be only a negative answer to the question whether the scheme provides "adequate sinking funds for the loan." Another question relates to the effect on the Dominion's credit in London of a deliberate proposal to utilise repayments of capital advances to pay interest charges. Sir Joseph Ward has protested that when the State advances scheme was introduced there was criticism of his proposals—as there certainly was. in respect, of the details. There was, however, no objection to his contention that "the first essential is to give an as-

surancc to those from whom it is obtained that their loan is safe." As one safeguard, calculated to inspire the confidence of British investors, lie insisted that there should l»e a margin of U per cent, between the cost of the borrowed money and the rate at which it should be advanced, so that substantial profits could be accumulated as a reserve,. against losses. Now lie proposes to invite British investors to supply £oo,oo<i,(h>o for a scheme in which the losses would be so huge that at the end of the first period of advances there would roiiiairi only X' 10,500,000 of the original loans, and the Dominion would have to ask liritish investors for another loan of £10,500,000 to pay its debts. Mr. Macalister's challenge has been addressed to Sir Joseph Ward : it must be answered by the Lnited l'art.v and by all its candidates, for they are inviting the electors to return them in sufficient numbers to enable Sir Joseph Ward to put his plans into operation. Whether the £60,000,000 scheme was examined and adopted by the party at the conference which framed its policy: whether it, was designed and launched b,v Sir Joseph Ward without reference to the candidates who chose him as their leader, they have presented it as the policy of the party. For three weeks they have been inviting the country to admire the magnificence and the magnitude of the whole conception. Surely it is time for them to return to earth and instead of merely making bold and amazing assertions, produce an intelligent demonstration of how the huge losses so frankly admitted by their leader can be borne without either a drastic increase in taxation or leaving a very ugly problem to be solved thirty years later.