THE BUDGET PROPOSALS.

Otago Witness, Issue 2111, 9 August 1894, Page 35

THE BUDGET PROPOSALS.

INTERVIEW WITH THE PRESIDENT OF THE NATIONAL ASSOCIATION. (From Our Own Correspondent.) Auckland, August 4. The council of the National Association has finally formulated its opinion in regard to the Budget, which has been under consideration, more or less, for some time past. After the meeting a Herald reporter interviewed Mr J. Batger, the president of the association, for the purpose of gathering the views of the body of which that gentleman is the head on the present financial position. "Yes," said Mr Batger, in answer to a query, "we havo carefully studied tho tfiuaiicial Statement lately made by the Colonial Treasurer, both as regards the position of colonial accounts and the financial policy of the Government The Budget falls naturally into divisions — a report upon the present and past and proposals affecting the future."

"What about; the present financial position ? "

"As to the past year's accounts," replied Mr Batger, " the general result appears to be thafc whereas the year begau with an available credit bikuce of £283,779 ifc ended with £290,238, showing thafc the surplus for the year on the ordinary revenue account of tho consolidated fund was £6454. Included in the year's revenue, however, is £284,500, which is not revenue strictly speaking, bufc the amount of the liberated sinking fund applied to general purposes. "It is further noticeable that the Colonial Treasurer admits thafc bis expenditure is lighter than was expected through a postponement of expenditure which he had estimated would have been required during the year."

INCREASE IN THE PUBLIC DEBT.

" Then the public debt," he went on, "has been increased during the year by £730,421, and ifc is suggestive of bad management that, notwithstanding the large balances on the lsfc of April, the Government are now proposing to anticipate by four months the collections ot this year's land tax." •' How does the Budget Statement illustrate Mr Ward's complaint about the Na'ional Association's criticisms on the previous Budget ? "

" We are gratified to find thafc, notwithstanding the Treasurer's ill-will to the National Association, he seems to have been converted to our view that the public ••<• counts can he made simpler in form, and oug'i^ 10 ht intelligibly r^i.dered. It is r< mail<sjie that Kr Word, who two short mon!bs ugo tried to create an impression that the public debt was reduced

when at Oamaru he said it was less per head of population (dividing it equally among men, women, and infants in the colony) now than when his party came into power, should have to admit iv his official Budget speech that instead of being less ifc had actually increased during the last year by £730,421. If we compare the present debt wifch what it was when affairs passed into the hands of the present administrators, wifch their non-borrowing policy, the figures are these:— Net amount of public debt, 31st March 1891, £37,343,308 ; net amount of public debt, 31sfc March 1894, £38,874,491, or an increase of £1,531.183. Another feature worthy of remark disclosed by the Budget is thafc the ostensible reason for converting £500,000 Imperial guaranteed debentures — namely, to lessen the annual burden of interest thereon — proves to have been wholly inadequate as a motive, and the true reason for the procedure would seem to be, as was suspected at the time, to make use of the accrued sinking fund for general purposes."

lIOBROWINO PROPOSAL.

" What do you think of the Government borrowing proposals ?"

" If the Government have been false to their non-borrowing policy in the past it seems that they are openly to repudiate it iv the future, and the council thinks their borrowing proposals are fraught with great danger to the colony. Taxation is already too high. It presses hard upon enterprise aud industry, and accounts in a great measure for the present depression. Increased taxation must follow fresh loans."

" But the Government propose to apply the greater part of their loan to making advances which will be paid by individual borrowers to whom the Government will advance the money."

" The chief proposal as regards borrowing is thafc of introducing £1,500,000 of capital annually on the public account tor the purpose of lending ifc at 5 per cent, per annum to farmers and to promote settlement. It is questionable whether this would have the effect desired. Ifc would, of course, tend to create more or leßb of ' a boom,' buyers being tempted to offer higher prices through being able to sreure loans at a low rate of interest ; but this would tend to a reaction aftei wards, and would return the land market of the colony again to its present congested state. Mr Ward seoma to consider the present selling value of real estate is at 1 bed rock,' bufc this cannot be unless ifc can be shown that the price of produce is also at bed rock, for the selling value of an esfcafce depends upon the return ifc can be made to yield, and if our frozen meat, wool, grain, and other produce continue to fall in value land must of course become also less valuable. There is a danger thafc the colony may gradually become hampered with immense ' globo assets ' from the operation of the same causes that have brought the banks and other financial institutions to grief, and in the case of tile colony there is additional danger arising from party or personal bias, and the difficulty of managing so special a business through ordinary official channels. The alternative woulel bo to create an army of valuers, inspectors, &c, and open tbe door to all sorts of favouritism and corruption."

COLONIAL CONSOLS

••How about the proposal for colonial consols ? "

"The Government proposal for issuing £1,000,000 of colonial consols at 4 per cent, simply means depleting the open market iv order to swell the resources at the command of the Government. Of the same nature is the proposal to close the trustees' savings banks."

" Does not the council think that the Government are justified in borrowing money for reproductive purposes ? " " The displaying of private enterprise by the Government investing and controlling the capital of the colony forms a serious danger. So far the investment of borrowed money in public works called * reproductive ' has nofc been a success, and does not encourage any hope of better results in the future, for we have the Treasurer's own authority for saying that instead of improving returns there is just now a distinct falling off in the revenue from public works."

NO GRASP OF THE SITUATION.

•• In the Budget proposals the Government as a whole," concluded Mr Bafcger, "confirm our fears that the Government does not grasp the situation. They appear to think that legislation can remedy the present depression and lead to a return of prosperity, while from our point of view interference with and the harassing of enterprise only makes matters worse, and prevents the free use of capital in the employment of labour ; while the attempt to concentrate the currency of the colony in the hands of the Government tends still further to restrict enterprise and destroy confidence in the colony's future."