GOVERNMENT BORROWING.

New Zealand Herald, Volume LXVI, Issue 20331, 12 August 1929, Page 5

GOVERNMENT BORROWING.

ISSUES IN NEW ZEALAND. AMOUNT RAISED AT 5| PER CENT. An announcement "was made by the Prime Minister in February that the issue of 5j per cent, debentures and inscribed stock maturing in 1933 would bo discontinued and that from February 15 stock with a currency to February 15, 1937, and bearing 5& per centinterest would be available. A return contained in the annual report of the Auditor-General shows that during the financial year 1928-29, the total amount borrowed from the public in New Zealand, including the Fublic Trust, was £2,971,680. Of this amount, £2.297,990 was at 54 per cent., and £673,690 at 5g per cent. . The return shows the whole volume ot borrowing in New Zealand during io vear, including issues in redemption and renewal. The aggregate sum was £2l 007,945, of which the Post Ol.ico furnished £15.238.0-15 inc hiding tM proceeds of sales to the public of Post O ili co investment certificates — at 51 per cent., and £7200 at 5A per cent Borrowing within the Public Account, bv one department from another accounted for £2,558,220, the balance of £240,000 representing loans by the State Advances and the State Insurance Departments, The actual purpose of the return was to illustrate the lack of uniformity ir the rates fixed for loans between Government accounts, even in the case of loans issued at the same timo and in similar circumstances. The rates at which the year's borrowing was arranged were as follows: —3J, per cent., £230,000 : 4 per cent., £13,540,625; 4£ per cent., £3,564,780; 5 per cent., £276,290; 5i per cent., £673,690 ; 5£ I per cent., £2,712,860; and 5£ per'cent., £9700. The Auditor-General also directs attention to the fixing of the rate of interest at a rate considerably below tho current market rate. "At a time when tho Government is offering per cent, for loans it seems hardly equitable," ho remarks, "to allow another Government account only 4 per cent, or 4J per cent., especially if, as sometimes happens, tho lending account has recently borrowed tho money at tho current market rate. Ili ono.raso an account which was borrowing from tho public at 5j ptr cent, borrowed moneys on tho same security from another Government account but allowed 4 per cent. only, r". It appears to tho Audit. Office that tho rate of interest to iio charged on loans between Government departments should ho uniform, and should have some relation to the current rate offered to the public on Government loans. It IS , & matter of considerable importance. a affecting tho accuracy of Uia Polished < departmental accounts and balance sheets.'-