THE FINANCES

New Zealand Times, Volume XXXIX, Issue 8810, 13 August 1914, Page 7

THE FINANCES

£3,500,000 WANTED AMENDMENT TO PUBLIC REVENUES ACT. TO MEET SPECIAL CONTINGENCIES. By Governor’s Message an amendment to the Public Revenues Act was received in the House last evening providing for tho raising of £2,000,000 to bo applied to the Public Works Fund or the War Fund as, tho Minister might find desirable. Tho Hon. J. Allen (Minister for Finance) explained that there was no power to raise money by Treasury bills to supplement the Public 'Works Fund. Tho bill gave authority for this to be done and whatever was raised by bills would be repaid out of any loan that was raised subsequently. He believed- the Government could finance on Treasury bills temporarily at a bettor rate than they could on debentures or stock. A BETTER COURSE. Sir Joseph Ward thought that it would have been better to limit tho bill to matters concerned with the war crisis. Tho Ministerial proposals introduced should bo coterminate, with the war period. The bill proposed to give the Minister power to issue Treasury bills to tho extent of £3,500,000, and increased the permanent issue Of bills half a million a year. It was a great power to vest in one individual. The trouble was that it was proposed permanently to allow the Treasurer to issue bills to the extent of -a million and a half instead of a million. The last clause also allowed an extra £IOO,000 in connection with the general services of tho country. No justification should bo given for any undue criticism at such a juncture. Authority was given of allocation to both tho Minister for Finance and the Minister for Defence. Mr Allen acted in tho dual capacity at present, but in tho future the offices might bo separated and difficulties Would arise. The Opposition were in a position that they could not deal freely with the bill. Mr Allen. “Why nob?” Sir Joseph Ward: “Because you have put matters in tho Bill that should not be there.” * “ENORMOUS POWER.”

Mr G. W. Russell (Avon) pointed out that the returns of expenditure for the first year of office of the present Government had not been presented on tho Canadian system as had been anticipated. Ho could Hot help thinking that the ooutry> would sympathise with the views expressed by tho Leader of the Opposition, inasmuch as it was proposed to vest enormous power in an individual Minister. The Government might well indicate to what extent it intended to go in war expenditure beyond the large amount that was being received from the people. It was proposed that any of the moneys borrowed for war pur-, poses could be “transferred to the Public Works Fund and Consolidated Fund in such proportions as the Minister for Finance determines.” Ho did not see why there should be the power of transfer to the Consolidated Fund, although ho did not object to expenditure on public . works. -It might he even desirable to allow borrowing at -more than 5 per cent, for this purpose for a couple of years. It would be a national disaster if public works were stopped. Mr T. M. Wilford (Hutt) congratulated the Government on the proposal to raise money on short-dated debentures, but it would be as well if a clause were inserted providing ' that money raised as a war- Joan and. not used for war purposes should be devoted toHlie, redemption of Treasury bills -raised Under the Act and be so earmarked; also, that a sinking fund should be created. Money required for other than war purposes should be provided for by another Bill. The Hon. D. Buddo (Kaiapoi) thought the limit of 5 per cent, for interest was a mistake. It might ho necessary to raise money .cm any terms.

Mr J. A. Hanan (Invercargill) regretted that circumstance® prevented a free criticism of tho Bill. Mr H. G. Eli (Christchurch South) suggested that the Canadian plan should be adopted of Issuing, if necessary, Dominion notes to such an amount as might be necessary against securities deposited by the banks. Mr G. AVitty (Biccarton) considered too- much .power was taken Under tho bill. He felt that the Opposition was being taken advantage of. ; ABOUT UNEMPLOYMENT. ' The Hon. AV. Fraser said he Wished it to be distinctly understood that the Government had considered the qnes-tiort-.of keeping employment and there was no intention to discharge a single man from public works. Eveiything was to be done to prevent distress arising. . ' - Sir AV. C. Buchanan (AVairarapa) said it was plain that, many men would be thrown out of private employment, and additional public expen-' diture might be desirable. The’ Hon. J. Allen thought members were perfectly justified in criticising the bill. It was important that authority should bo given for an increased issue of Treasury bills. Revenue fell off in September and October, and there was a necessity apart from the war to resort to Treasury bills to tide over an awkward period. Sir Joseph AVerd: “ You have changed your views very much.” Mr Allen denied this. Ho had always pointed out that Treasury bills had to be met at tile end of their period. It was impossible to say exactly how much would be required respectively for war and public works. If members wanted to substitute the Gov-enior-in-Oouncil for tho Minister for Finance in committee he would not object, but it meant no additional safeguard. There was no intention to create large balances. The Consolidated Fund might bo drawn on for the war fund, so that there was nothing in the point about payments back into tiie Consolidated Fund. He saw no necessity for the issue of Dominion notes. Tho ordinary bank-notes had been made legal tender, and the banks were in a. strong position. Tho bill was real a second time and passed through committee without comment.