HANDS WERE TIED

Sun (Auckland), Volume IV, Issue 962, 3 May 1930, Page 1

HANDS WERE TIED

PRIME MINISTER EXPLAINS THE 1928-29 DEFICIT

REPLY TO DOWNIE STEWART Press Association WELLINGTON, Today. The Prime Minister, Sir Joseph Ward, telephoned the following statement from Rotorua today with reference to the reported remarks made at Auckland by the Hon. W. Downio Stewart regarding the deftciency in the public accounts for the financial year 1925-29, being the last year of the occupation of the Treasury benches by the Reform Party: “I wish to point out that in the introductory portion of my 1929 Budget and also in the London statement, as admitted by Mr. Downie Stewart, I clearly pointed out that the special expenditure of £156,000 connected with the conversion operations during that year helped to swell the deficiency. However, even without the £156,000 referred to, the deficit would have been £421,252. “Mr. Downie Stewart points out that he had no opportunity to reduce expenditure in the last four months of the year as he would have done if it had been obvious that revenue was falling. My answer to this statement is, first, that the people of the Dominion were apparently good judges of the march of events and de\:ded it was time to make a change, and, secondly, with regard to the last four months of the year when the finances of the country were under my control, I explained in the 1929 Budget the steps which I took to keep expenditure down as much as possible after ascertaining the actual position and taking cognisance of the commitments already entered into by the Reform Government. CUSTOMS RECEIPTS SHORT “Here let me point out that in his financial statement which he laid on the table of the House before vacating the Treasury Benches Mr. Downie Stewart stated that there were at that date no indications that the estimate of the balanced Budget made earlier in the year would not be realised. As a matter of fact the customs receipts as shown in Mr. Stewart’s final statement before vacating office were £50,000 short of the proportionate part of his estimate for the year. There was the genesis of a deficit for the year and it Is ridiculous to suggest ■now that it wTmld not have occurred if the Reform Government had remained in office. As I pointed out in the Budget this Government took prompt steps to retrieve the position as far as possible, but its expenditure was tied by the commitments of tho Reform Government and the year’s operations were too far gone for this Government to achieve success in that endeavour. Further, I notice that the ex-Min-ister of Finance, in commeting upon the loan of £5,500,000 which has just been underwritten, suggests that the Government is not able to borrow all the money that it requires. “SO MUCH NONSENSE” “As X have already stated, this is quite incorrect and just so much nonsense. Economically it would be bad policy to borrow the whole of our loan requirements abroad. “The Government’s proposals for the current year will be brought down in the House at the proper time and I do not propose to discuss them now. I may say, however, that the amount underwritten in London together with local resources will provide all the additional capital required for carrying out the Government's policy in connection with State Advances, public works and land settlement. Needless to say, the Government is not going to be stampeded into adding any more to the public debt than is essential. “To sum it all up, the statements made by the Hon. Downie Stewart consist of little more than a reiteration of matters which were fully discussed and explained in Parliament last session, and if thrashing ‘a dead horse’ is all the contribution the Reform Party can make toward the solution of the current financial problems, it is a fortunate thing for the country that it is no longer upon the Treasury benches.”