WARNING SOUNDED

Poverty Bay Herald, Volume LXV, Issue 19700, 4 August 1938, Page 15

WARNING SOUNDED

DOMINION FINANCES FALLING REVENUE AHEAE “GOOD TIME” BUDGET QUERIES BY MR. COATES (Parliamentary Reporter.) WELLINGTON, this clay. A Budget which concealed, rathe than revealed the true llnancia position of New Zealand was hov the Fit. Hon. ,1. G. Coates (Nat., Kai para), described the financial state ment in the House of Representa lives last evening. Mr. Coates said that the speaker: on the Labour side of the Housi claimed that the prosperity New Zealand enjoyed to-day was due tc Labour's policy, but he considerec the country’s prosperity was due tc rising prices. Mr. Coates asked if the Minister of Finance, the Hon. W. Nash, thoughl it were the correct procedure to use the unemployment funds for the purpose of putting the accounts of the different departments right. Money for this purpose, he said, should have been taken from the consolidated fund. The Government intended to raise £14,000,000 for public works, said Mr. Coates, but the country did not know how it was to be raised. In addition, there would be local body loans. How were they to be raised? The Budget did not say how the £5,000,000 was to be raised for housing. If it were to be raised from the Reserve Bank, would it not be a debt? The Budget did not make it clear how these sums were to be raised, and it should do so. Fall in Revenue Pending He sounded a warning that the country was facing a period of falling revenue pnd declared that the administration of its affairs rested in the hands of a party that had run away from its obligations a few years ago when the country was passing through a time of serious economic difficulty. A few years ago, when a call was made for the sinking of party differences, and it became a question of standing together in file best interests of the Dominion, the Labour Party had failed the people, said Mr. Coates. The party did not stand up to the difficulty then, but ran away from it, but this was election year and. for that reason, the Minister of Finance had deemed it prudent to show

a surplus in the Budget, though, when his figures were closely examined, the enormous increase in expenditure alongside the falling revenue was its most impressive feature. The Government was saying: “Let's have a jolly good time, while the going is good,” but that -sort of thine was steadily bringing the country to a point where it would meet serious difficulty. Mr. Nash, he said, through financial subterfuge had budgeted for a surplus. It wits fairly significant that the Minister had allowed for a decline in customs revenue, and time alone would show how great that decline would be. Mr. Coates added that there was room for serious doubt as to whether the estimates from customs revenue and sales tax were correct. If they were not, then the Minister’s figures would be in jeopardy. Falling world trade would place the estimated surplus in jeopardy also. Position of London Funds Referring to London funds, Mr. Coates said these were already down millions of pounds, and were getting nearer to the point of exhaustion. It was a fair question to ask what the Minister proposed to do in the event of these funds running out. Would the Government raise the tariff or endeavour to regulate the exchange to counter a difficulty that would affect the whole of its industry and trade. It was also the responsibility of Mr. Nash to justify his use of the employment funds to bolster up the departmental accounts. Where would the Minister’s estimated surplus of £58,000 be if he had not made his raid on the employment funds? asked Mr. Coates. Instead of a surplus, he would be showing a deficit of £425,000. Altogether the raids bv the Minister of Finance meant that he had taken £1,328,500 to bolster up his accounts. If the Minister had been obliged to find this sum out of the consolidated fund, his so-called surplus of £58,000 would have been turned into a deficit of £1,500,000. “I will not say that the Minister has purposely misled the country, but he has juggled the figures so much that he has even got himself mixed up,” declared Mr. Coates. "In the end, he did not care how the figures balanced, so long as they balanced — that was all. "He has pinched everything he could from (lie special funds and used it all for the one purpose of showing a surplus. His Budget methods are Unsound and the document he has placed before the House does not give a true picture of the financial condition of the country."