REDUCED BORROWING.

New Zealand Herald, Volume LXVIII, Issue 20926, 16 July 1931, Page 11

REDUCED BORROWING.

REFORM POLICY ADOPTED.

PROSPECTUS OF LAST LOAN.

COMPLAINT AGAINST SECRECY

[BY TELEGRAPH. —SPECIAL REPORTER.] WELLINGTON, Wednesday.

" It is pleasing to know that at last the Government has adopted tho laperingoff borrowing policy of the Reform Party, but we have had to wait for the arrival of tho English papers giving details of the prospectus of the recent £5,000,000 loan for this indication of the Government's changed,policy,".said Mr. A. Harris (Reform —Waitemata), when complaining in the Ilonse of Representatives today of tho secreev-'maintained regarding the loan transactions.

Mr. Harris said the barest information had been given the people of New Zealand when it was proposed to float the loan on the London market. He said on reading the Financial Times, containing an outline of the prospectus, he found that tho policy of the Government was to taper-off tapital expenditure by 40 per cent. He had not known this before and there had been no statement of any kind from the Prime Minister or his colleagues in this direction. No Hint of a Change. New Zealand had been spending a considerable sum each year'under the,., head of capital expenditure. He suggested the Ministers should be more frank and should at least let members of Parliament know about these things. His greatest concern was that no hint had been given ol- this changed policy of the Government, which had been so lavish in its public works expenditure. During the two and a-half years it had been in office it had more lavish than any previous Government.

For the year 1929-30 the Government expended in loan moneys an aggregate of £8,250,000. The figures for ' the last financial year were not yet available, but he was aware that the public indebtedness of the country increased last year by £8,650,000. That was practically all capital expenditure. Whereas in two years the Government had expended about £17,000,000, it was now proposing to spend something under £5,000,000. Policy Formerly Condemned.

There was one thing," however, that pleased members on the Opposition side of the House, continued Mr. Harris. That was the adoption of the tapering borrowing policy advocated and practised by the Reform Party for a long time. That policy was condemned by the United Party during the last election. Had that " safety first" policy been adopted at the outset, the country would have been spared the result of reckless extravagance on the part of the Government during the past 2j years, and would have had less trouble in surmounting its difficulties. If the new policy would prevent a recurrence of the extravagance which followed the Government's accession to office, it would certainly be supported by the country generally. There had been too many of these Cabinet secrets over loan transactions in the past and when these negotiations of which he was complaining were taking place, Parliament was actually sitting. Yet not one word was said about them. It would not be unreasonable to expect the Government to post each member of Parliament a copy of the proposed prospectus, which could have been made confidential if necessary. Amount of Surpluses.

On another point, Mr. Harris said he found for the first time that £1,000,000 for loan redemption was to redeem loans in New Zealand, but that was never told to the people of New Zealand. It would have been natural to suppose that was intended for loan redemption in England. The prospectus also told the London investor that tho last year's deficit of £1,639,000 had been met from tho balance of accumulated surpluses since 1914, totalling about £30,000,000, but not one word had been said about the accumulated surpluses now being £278.600. A Reform Member: We would not have got a cent.®" Mr. Harris: No, we would have got nothing. It would have been better to have left out all reference to it rather than by inference to tell people at Homo that, we have £30,000,000 of accumulated surpluses. I suggest that in tho future tho Government should be more frank. Mr. J. S. Fletcher (Jndependontr-Grey Lvirti) : They might never Irtave another chance.