BORROWING POLICY

Poverty Bay Herald, Volume LIV, Issue 16653, 24 May 1928, Page 12

BORROWING POLICY

GOVERNMENT ATTACKED MR. POLSON ADDRESSES FARMERS (Per Press Association.) HAMILTON, last night. The Dominion President of the Farmers' Union, Air. W. J. Poison, vigorously attacked the Government's borrowing ' policy when addressing the Auckland Provincial Farmers' Union conference this afternoon.

Mr Poison said that during the period since the war we had been increasing the national debt—that was the public debt—at a rate of nearly £1,000,000. a month. The interest rate was also increasing. The grass national debt on March .31, 1921, was, £206,324,000, and tho amount borrowed sjnee was £44,680.000. bringing the debt to £245,850,000 in 1927. Air. Poison also detailed the local bodies debt, which, he added, less the amount borrowed by local bodies, from the (Government' in 1927,' had' reached the extraordinary total of ££4.000,000 "It is quite obvious," said Mr. Poison, "that the renewals of the.se loans must. 'mean an increased rate of interest, in spite of tho recently made boast, about (he success of the' last New Zealand loan. This loan. Mr. Poison described as a "fuss about. 4d," .because the.net yield to the investor was £4 19s Bd, whereas in the ease of the Commonwealth's last loan, more recently floated' than New Zealand's, the net yield to investors was £5, a difference of 4d. Banking authorities showed that in the lastfew years all issues participated in the general improvement, New Zealand -being among them. ' "In the next four years." he said, "tho Government is maturing £87,470,000 worth -of loans, which will have to he renewed by means of increased interest. The charge on renewals alone in the next, four years is over £400,000. fn addition io the new loans, estimated by the Government, which will mean another £1.000,000 interest in the next live vears. ti "In a speech in replv to me. said .Mr Poison. "Mr Stewart admitted that the imports must pay lor the exports, and should show sufficient- surplus to pay also for oversea, loans. This is just my point. Now he claims credit for the import of capital without debit for borrowing This is most extraordinary book-keeping for a Minister of Finance. He forgets he borrowed 12s 6d wortn and must pay back £l, and suggests that lie borrowed £1 and need only pay back 12s 6d. Taking these figures into account we find the borrowing rate of the country has enormously increased since the war. - "In the reply of Mr. Jones, on tiehalf of the Government to rny Mnsterton speech, it. is .stated I ignored the fact that the import, values are loaded with 10 per cent. The loading is intended to cover in part tho cost of transport, freight insurance, etc. Mr. Jones is apparentlv under the impression that we rrpt our transport, done for nothing, io eliminate it would falsify the figures, and as a fact, 10 per cent, is not nearly «nnuo-h to cover the charges. In the 1924-25 Yeav Book' the Government Statistician' gives the estimated balancesheet of debits and credits in New Zealand He estimates freight insurance and exchange at 20 per cent, of the imports. The aggregate of imports trom 1921 to 1927 was £317,000,000. Tins nives £28,817,000 as, the added «n° unt for freight over the period. If the basis adopted bv the Government in this trade balance statement is correct, then the sum of £29,000,000 must be added to the imports to got the balance of freight, charges for the period. This would make mv figures all the more formidable. It 'would be interesting to know whv these statements from the Year Book were dropped after two vears."