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New Zealand Mail, Issue 849, 8 June 1888, Page 27

(From the JVea? Zealand Times, June o.) Acooemss to tbe latest lobby rumours Ministers will join issue with Mr

Ormond, on ■ all the three resolutions which he is to move to-day. So far as the third resolution is that- in favour of funding the delicit instead of paying it off- —we cordiallj' approve this determination. Wo have freely admitted the necessity of let ting the country down gently in existing circumstances. But that has already been done in a large degree by funding three-fourths of the deficit. It is surely not unreasonable to ask the Colony to pay the remaining fourth. It is difficult to conceive a more dangerous and objectionable practice thau that of adding deficits to Ute permanent debt. Not only is it most perilous and unsound finance, but it is also open to graveexceptionasholdingout a distinct premium to JMioisterifl-l zinci mentary extravagance. It a lavish or corrupt Government ,cau spend .as they like, and incur dehcieueies ad libitum, confident in . the security that those deficits will be funded, and that they will not be compelled to impose additional and unpopular taxes to liquidate them ; and -if Parliament can, with similar immunity from disagreeable consequences, encourage such extravagance, and pass votes which they know, or could easily ascertain, that the revenue will not meet, there is every reason to fear that we shall go from bad to worse in our money matters. Dencit will be piled' on delicit whenever we are cursed with an incompetent or corrupt administration. And in addition to these other drawbacks there is the f urther one that, as we pointed out yesterdav, the jjrocess means iu plum terms borrowing so much more money Those who urge that the deficit sliaU ba funded instead of being paid oft simply advocate that, in nddnuou to the £2,000,000 authorised by the Loan Acts, and the £IOO,OOO already boirowed to meet so much of the deficit, the Colony is to borrow a further' sum of £128,000. this course can he defended with any particle of consistency J those who oppose funher borrowing we are at a loss to understand. lne process is the worst possible class of borrowing—viz., borrowing in aid ot income. The country that funds a deficit on its current account is exactly in the position of a spendthrift who has to pawn his watch or his coat to obtain a meal. He is driven by dire need to borrow toward his daily expenditure, and a country that has to borrow tor purposes to which the ordinary revenue ought to be applied is in a like predicament. Of course dire necessity may drive a man to the pawnbroker pr a country to borrow toward a deficit, bat such an exceptional emergency should be the only possible excuse. While, however, we hope that the Government will remain firm on this point, we are by no means clear that their proposals in regard to the subsidies to local bodies are equally worthy of support. "We concur in all that has been urged against the plan of endowing local bodies out of Customs. It is true that in the old Provincial days the provinces were . endowed with a certain proportion of the Customs revenue, but it will hardly be contended that the plan was a success. We believe that an increased tea-duty would be a perfectly legitimate and unobjectionable way of assisting the ordinary revenue, but we certainly do not regard it as a proper source from which to obtain an endowment for local bouier. Here again the effect would be to encourage extravagance and reckless financing. It is highly essentia! thatfchesebodies should learn with the utmost distinctness the wholesome lesson that for local works thev must depend upon local rating. There,is undoubtedly some hardship at present to local bodies in having to provide large funds for Hospital maintenance and Charitable Aid purposes, over the spending and levying of which they have no real control ■; but a slicht modification of the Hospitals arid Charitable Institutions Act would easily get over that diffi-. culty. We should like to see the House meet this question boldly, and 6ay plainly that subsidies must cease henceforward. If continued at all they should bo provided by some tax on property ; either out of the propertytax or by a special land-tax for that purpose, but assuredly it is a very unsafe and uudesirable step to set aside a particular Customs duty as an endowment in perpetuity for this object A far wiser and better couise would he to do away with these subsidies altogether. With reference to this proposal of Mr Ormond's, therefore, we hope the Government will not bo too unyielding. In any case the House would, do wd'i to ppja the feavluti'm -affirming ,

the undesirableness of keeping up the subsidies in this way. We trust also that it the resolution advocating a further saving in edueaiion expenditure be not carried precisely in its present shape, there will be a resolution carried in favour of a reduction under this head and of adopting a small school fee. Booking at Mr Ormond’s resolutions as a whole, we should like to see the first adopted in a modified form, the second carried unaltered, and the third rejected altogether.