THE BUDGET DEBATE.

Otago Daily Times, Issue 19240, 2 August 1924, Page 12

THE BUDGET DEBATE.

REPLY TO MR WILFORD. MR STEWART'S SCATHING CRITICISM. 'From Our Own Correspondent.) WELLINGTON, August, 1 The speech delivered in tho House last evening was probably tho most effective that has been heard m the Budget debate up to the present. It was certainly a most destructive reply to the Liberal Loader’s criticisms, and was listened to with rapt attention by nearly everyone present. “The Loader of tho Opposition.” raid Mr Stewart, “accuses tho Minister of Finance of having faked the tables, ot having distorted the figures, misrepresenting tho position, of being contradicted by tho Auditor-General, and of contradicting himself and generally denouncing the figures in tho Budget as untrustworthy and unreliable. Ho quoted a mass of figures in support *of his contention, but I havo gone through (he statements made by him in support of those very extravagant criticisms, and cannot find at any point that he is accurate in his figures, or that there is any conflict between the Auditor-General and the Treasury or the Auditor-General and (lie Minister of Finance. At every turn the figures are perfectly easy to explain, and are not open to am- of the suggestions made by the Leader of tho Liberal Party. In fact, when ho accuses the Minister of Finance of faking tables, I do not think it carries any weight in the country’, because the country would not attribute - such an action to tho present Minister of Finance, and consequently the words which are used in that way cease to have any meaning.” With reference to the British War Loan stock, said the Minister. Mr Wilford had said that Mr Massey’s statement that the profit under that investment had come to no less than £137,540 was inaccurate, and that the Auditor-General's statement showed that the Prime Minister was utterly and absolutely inaccurate, for according to the Auditor-General tbe loss on realisation was £6758. That was tucked away, far away from tho Budget under the heading “unauthorised,’’ at the end of the accounts. In reply to this, Mr Stewart pointed out that there was no such statement in the Budget. What the Minister of Finance had put in the Budget was tho fact that this stock was bought at £95, that its present market value was £lO2, and that tho price quoted would represent a profit on the transaction amounting to £179,900. Mr Wilford: £137,000. Mr Stewart; That is after the deduction 1 have explained, tho four months’ interest accrued, leaving a net profit of £137, ujO. Mr Wilford: That is on the investment as a profit? Mr Stewart: Yes. Now where I join issue with the hon. member is where he says " that so far from having made a profit there was a loss of £6758, and that is tuoked away in unauthorised accounts.” Now, all tho unauthorised accounts say, in 6.1. part 1, page 67, is: “There is a loss of the realisation of the 5 per cent British, war loan stock of £6758,” but that was not on this transaction, but on some further stock Ixnight at £99.) to £99 11s 6d, and the Budget expressly says so. That w - as a separate transaction. If Mr Wilford looks at tho public accounts he will see there has been a sale of part of the stock ho is dealing with at a profit certified to by tho Auditor-general of £45,551, and half tho stock is not yet sold. It is clearly shown that what has already been dealt with has made a profit of £45,561, and that thcra is still a balance of stock to bo dealt with. Now - , the hon. gentleman could have ascertained that. So far from making a loss of £6758, w - e come out with a handsome protit of £45,561 on stock already dealt with, and the balance has still to bo dealt with. Therefore tho hon, gentleman’s statement is without foundation and most misleading, and I hope tho hon. member won’t uso it as ho goes through the country as a fair criticism of the Budget Mr Wilford : I will prove it as well. Mr Stewart: If the hon. member undertakes to prove it after I have referred him to chapter and verse, showing he is entirely wrong, then I say he is not indulging in fair criticism or that he is anxious to put the true position before the country. Mr Stewart proceeded to deal wuth Mr Wilford’s suggestion that j.ho Minister of Finance had hold back the information that tho interest on the Discharged Soldiers’ Fund had not been paid, and ihat it was only when his attention was drnwn to it shortly before the Budget was iss i-u that he made mention of it. “ I can solutely contradict that,” said Mr Stfcv. arc, "because 1 happened to bo acting Minister of Finance at tho time the questioh first arose, and when I published the seven months’ accounts in November of last year I specially pointed out the position of the Discharged Soldiers’ Fund. I pointed out that the interest had not been paid, and tho matter was commented on by the press throughout the dominion.” Mr Stewart quoted his dear and definite statement showing exactly the position last November. Tho whole position of the fund, ha said, was dearly shown in the Budget. Then Mr Wilford was reported to have said that propaganda figures had been put into the Budget in 1923, when the Prime Minister stated that the loans paid off that year totalled £8,466,200, that tho statement was millions out, for according to the Auditor-general the amount of loans paid off during tho roar was £5,396,421. Now,” said Mr. Stewart, “ there is a statement clear and definite that the Prime Minister had claimed to have paid off that year’s £8,466,201. Well, we shall look at tho Budget and see what it says. I find Ibis statement, than which nothinir could bo clearer: ‘The gross public debt at March 31, 1923, was £218,953.524, compared with £219,054;585 at March 31, 1922.’ There are the two figures given quite clearly, showing that there could bo no question. Then follows this statement: ‘ ‘ Loans aggregating £8,466,291 were redeemed, £5,225,386 being provided by cash and the balance by the issue of fresh debentures’; and on the next page tho same thing is shown again in moro detail: The amount of £3,446,201 was paid off from tho redemption fund and surplus revenue as follows,’ and then is set out how much cash was paid and the amount represented by tho debentures redeemed. Those figures had to bo set out in order to make clear tho fmanci-l transactions of tho year, but nowhere in any part of the Budget did tno Prime Minister make any such statement as is attributed to him by tho Leader of the Opposition, so that when tho hon. gentleman uses tho word ‘paid off’ instead of ‘redeemed’ ho is not stating tho position fairly.” Mr Stewart continued his ruthless criticism of Mr Wilford’s allegations, giving chapter and verso in every case to show that tho Prime Minister was right and tho Leader of tho Opposition wrong. Ho dealt in succession with Mr Wilford’s statements: (1) In regard to the national debt repayments that £375,000 accumulated surpluses under the heading of investment in Bank of New Zealand shares had been left out of the table of receipts and expenditure to March 31, and that the table as it stood was a fake; (2) the alleged difference between the Budget and the Auditor-general’s (igures (of £582); and (3) the difference in transfers from the ordinary revenue account to loan redemption account, one item stating £1,367,541 and another £1,367,401. Mr Stewart showed that the figures were perfectly recognisable. v Mr Wilford made various interjections, stating in some cases that ho had been misrepresented. Mt Stewart made reference to Mr Wilford’s statement that tho investments were the most secret department of the Public Accounts. Mr Wilford : Tn that year. Mr Stewart: Tho hon. gentleman, continuing, said: The Budget of 1923-24 puts this investment at £1,212 919. Mr Wilford: No, for 1922-23. Mir Stewart; Tho hon. gentleman is quoted ns having said 1925-24, but if ho says he referred to 1922-2? 1 accept the correction, but the figures arc most important. Tie starts with £1,212,919, and ho says: “I have found details in the Budget amounting to £2.701,150. which make a total of £3,914,069.” I think the hon. gentleman moans the next Budget. Mr Wilford ; You left out three words. Mr Stewart: I am quoting the hon. gentleman as he is reported, and the figures, I assume, are correct. The hon, member does not challenge the figures, I take it. Mr Wilford: I referred to new investments. Mr Stewart; Wo will call it new investments. It docs not make any difference, because tho Lon. gentleman is equally wrong in either case. The report of his speech goes on to say: “In tho public accounts lie found those figures altered from £3 914.069 to £3,074,335—a difference of £539,732.” Mr Wilford: Those figures are wrong again. Mr Stewart: The hon, gentleman always says ho is not correctly reported. The hon. member accuses us of failing to explain how £BOO,OOO or more disappeared. Mr Wilford ; I did not. Mr Stewart: The hon. gentleman is entirely incorrect, and ho has only to look

tip (ho Budget to soo how hopelessly ha has gone wrong. The item of £1,212,919 which he takes us his starting point appears in the 1923 Budget in one of the tables at (he ojkl showing the investment of the cash balances of the ordinary revenue account, and the hon. gentleman has correctly quoted that figure. men ho says that ho found details in the Budget which he added on to that to show what Ho thought the fund ought to bo now. Mr Wilford: No, the ordinary revenue investment account. Mr Stewart: Very well, whatever you like. 1 turn now to the 1924 Budget, page 11. In order to make up his additional amount of £2,701,15u, ho added the State Advances securities appearing on page 111 of the Budget, £2,226,150, and the Bank of New Zealand shares, £375,000. That makes (ho £2,701, lot). The hon. gentleman entirely overlooked the fact that he d'd not add nil the securities. Sundry securities follow which amount to £373,187. I do not know why ho let those out. Mr Wilford; Those come off the £839,732. Mr Stewart; No. The hon. member has misinterpreted the table, and added up the figures without regard to the real position. The facts ns stated in the Budget are quite correct. I think I can explain the real position to hon. members in the simplest way by saying that the hon. member has assumed that if ho takes the investments appearing last year when the accounts finish and adds on to this year what ho finds in the way of investments made during the year, that will give him the present position, of the investment account, but hon. members will know that such an account is altering every day. Assuming that you had a Post Office account with a certain credit balance at the end of last year, and you added to that what you paid in the next year without any regard to withdrawals during the year, how could you expect to roach a true statement of how the account stood? These accounts are moving nil the time. Sometimes money is being paid in,_ and sometimes it becomes necessary to invest in another account, and you sell certain of your securities. That is the explanation of the whole thing. The hon. member adopted the extraordinary process of adding the balance at the end of one year to the payments that were made during the next year. That is how it is that about £BOO,OOO less appears in the Investment Account at the end of the year than ho expected to lino there. Mr Wilford, by way of personal explanation, spoke’ for some time rather heatedly, complaining that he had been misrepresented, and in one or two instances quoted figures to substantiate his point of view. Air Stewart interjected that Mr Wilford was twisting the facts, and there the matter ended.