EFFECT OF LOAN

Southland Times, Issue 21073, 3 May 1930, Page 8

EFFECT OF LOAN

FINANCIAL POSITION

LAST YEAR’S OPERATIONS ANALYSED' — .) ADDRESS BY THE HON. W. DOWNIE STEWART (Per United Press Association.) Auckland, May 2. In a speech in support of the Reform candidate for Parnell, the Hon. W. Downie Stewart said that Sir Joseph Ward had lately issued a statement regarding the results of the past year's financial operations. He did not propose to discuss this in detail because figures were difficult to present clearly in a public address. However, he would deal with it in general terms. Referring to the conversion of the £29,000,000 loan, Mr Stewart said that considering the state of the London money market at the time, the conversion appeared to have been carried out as satisfactorily as possible. Sir Joseph Ward had said the Government, on taking office had been unfortunate in falling heir to a deficit. ‘‘That statement is characteristic of the United Party,” said Mr Stewart. "It is not a fair statement, nor does it put the facts as the electors are entitled’ to have them. It would have been right if Sir Joseph Ward had said that ■ a substantial part, £156,000, of the deficit was due to loan negotiations conducted by the present Government after the Reform Party left office, negotiations with which Refofm had nothing to do.” In a statement in London, and in his budget, Sir Joseph Ward had made it clear that the deficit,was partly due to the £156,000, but in his utterance to the public he had thrown all the burden upon the Reform Party. As Mr Stewart was in office for only the first eight months of 1928-29, he had no opportunity of curtailing expenditure in the later stages as he would have done if it had been obvious that revenue was falling short. As a matter of fact in the last four months, customs revenue began to decline. Sir Joseph Ward now said that the deficit was due to his having over estimated the revenue, but in any case, the last months of the year were the only time in which an attempt could be made by curtailing expenditure to prevent a deficit. Sir Joseph Ward claimed that in that period he had economized and had under spent the estimates by £90,000. , hl

“Matter not put Fairly.” “I do not know what opportunities he had for doing so,” added Mr Stewart. “He certainly, according to his statement, under spent his own estimates last year by £220000. Still, to say without qualification that the deficit is due to me is not putting the matter fairly. The Reform Government passed through three hard gruelling years and came out at the end of each with a surplus. The only year it failed to do so was one it was not allowed to see through. In his assertion Sir Joseph Ward had given no details, nor had he proved that he himself could not prevent the deficit. If there had been a surplus, I wonder whose he would have said it was,” added Mr Stewart. A voice: Joe Ward’s. Mr Stewart: “If he could curtail his own expenditure by £220,000 in the next year, he surely could have prevented the deficit.. I do not say that we could have avoided the loan costs, but the fact remains that we had no cogjiisance of them.” So far as the revenue and expenditure figures for the year just ended were concerned, Mr Stewart said that a good deal of controversy as to a correct interpretation of the figures had taken place in the newspapers. Although the statement by the Minister of Finance was fuller than usual, it was not a complete statement. Until further information was given on certain points and reports were placed before Parliament, Mr Stewart preferred to withhold any detailed criticism. Although the revenue for the year had increased by £1,750,000 through extra taxation and increased imports, the surplus was only £150,000 and the expenditure had increased by over £1,000,000. When it was recalled that the United Party said its borrowing policy would not involve the taxpayer in one penny of additional taxation, it was rather startling to see the results after the United Party’s first complete year in office.

Loan Expenditure. Regarding loan expenditure, Mr Stewart said that when Sir Joseph Ward had put his policy before the electors and the House, he stated he would raise £6,000,000 or £7,000,000 annually for State Advances, £10,000,000 spread over ten years for railway construction and unstated amounts for land settlement, hydro-electricity development and other public works. Thus, adding all the figures together, the amount of borrowed money would be far and away above what the Reform Government had proposed. The Reform Party believed at the time that such borrowing would only reach a position where New Zealand, like one of its neighbours, would not be able to borrow further on the public market. Present Loan. Commenting on that day’s announcement that the Government proposed to raise a loan of £5,500,000 in London for the present year’s requirements, Mr Stewart said that had Sir Joseph Ward been able to carry out the policy he had announced at the General Elections, he would presumably have tried to borrow more, and possibly Sir Joseph Ward might go back for a further loan later in the year. “While some of you may think it unfortunate that the Government is not able to borrow all it wants to, I personally think it is a piece of good fortune,” said Mr Stewart. He thought it a wise policy, even in times when the money markets were free and open, not to take all that those markets could offer, but the least the country could do with.