THE GROWING DEBT

Otago Daily Times, Issue 24685, 14 August 1941, Page 6

THE GROWING DEBT

The Auditor-general has reported that the'public indebtedness of the Dominion was increased in the past year to the extent of £26,520,038. This is the largest amount by which the public debt has been increased in any one year in the history of the country. Not even during the war of 1914-1918 was an increase as large as this recorded in any one year. It is to be acknowledged that war borrowing contributed largely to the growth of the debt last year. The War Expenses Account shows that it totalled £ 14,504,490 net. But the fact that it was necessary to borrow so much for war purposes should have impressed any prudent Government with a sense of the need for a sharp curtailment of expenditure on domestic objects and of the need for confining borrowing for local purposes within strict limits. The difference between the amount by which, as the Auditor-general reports, the public debt was increased during the year and the amount of the net borrowings recorded in the War Expenses Account is

£12,015,548. This figure does not correspond with that given in the Budget as the amount of the loans for local purposes that were raised during the year, but it may be taken as an approximate statement of the extent of the increase in the indebtedness exclusive of the war indebtedness. It illustrates the dependence which the Government, professedly averse to borrowing, places upon loan moneys for the performance of its ambitious programmes. Nor has this been a year of exceptional borrowing on its part. It has, since it came into office, consistently piled up a debt, the redemption of which must be undertaken by succeeding Governments. When the Government, successively headed by Mr Ballance, Mr Seddon, Sir Joseph Ward, and, Sir Thomas Mackenzie came into office in 1891 the public debt was £38;830,350. It represented £SB Is 7d per head of the population. Mr Ballance, who became Colonial Treasurer as well as Premier, of the new Government, was appalled at its magnitude. As he expressed it, it made him pause. While he lived the public debt was hardly increased at all, but those who subsequently controlled the public finances released the brake which he had applied. The following table shows the increases in the indebtedness under successive Governments from that period until the present time:—

Liberal (21 years) .. 45,673,563 Reform (3 years) .. 15,705,997 War (4 years) .. .. 76,016,350 Reform (9 years) .. 75,319,992 United (3 years) .. .. 34,637,106 Coalition (4 years) .. 4,547,859 Labour (6 years) .. 68,846,476 The gross indebtedness per head has increased from the £SB Is 7d at the time when Mr Ballance assumed control of the Treasury to a figure which must now be about £206. It is a figure that should cause serious concern on the part of those electors who imagined that the leaders of the Labour Party could be trusted to practise .what they preached when, prior to securing office, they expressed their strong opposition to a policy of borrowing.