THE Thames Star. FRIDAY, OCTOBER 23, 1925. NATIONAL EXPENDITURE.

Thames Star, Volume LIX, Issue 16626, 23 October 1925, Page 4

THE Thames Star.

FRIDAY, OCTOBER 23, 1925. NATIONAL EXPENDITURE.

“With malice towards none; with charity for all; with firmness in the right, as God gives us to see the right.”—Lincoln.

In his opening address at>, Invercargill on Monday night, Sir Joesph Ward referred to certain aspects of the national expenditure in a calm and dispassionate review of the finances of this country. Sir Joseph adopted the tone of candid friend rather than that of carping critic. His experience in the realm of finance invests his opinions with a respect shared by all classes of political thought. Reference was made to the risk attendant on a policy of rushing development works with such haste. Loan money was being spent at an appalling rate. Next year, according to the speaker, the Government programme provides for an expenditure of a further several milions on public works. With all the money required to meet current liabilities, the Government was advised to change its policy in regard to these matters. Mr 'Coates maintains that it is impossible to carry on development in the Dominion and deal with it as its progress unless capital was sanely borrowed. The Premier further states that since 1912 90 per cent, of New Zealand loans have been interest-earning, and did not bear on the public. The question as to whether or not they do bear on the public is the point at issue. It would be stupid to assert that development work can be brought to a standstill. We, however, are of the opinion that the rate of borrowing is having an adverse effect on the primary industries. An individual may borrow for investment in his business in order that lie may both pay his way and maintain the credit of his enterprise. A State, too, may borrow. Its investment may safely be regarded as of longer duration, and the return, too, may be deferred. But, between these points of seeming diversity, an underlying resemblance persists. Though the State may take a much longer view, yet it is just as necessary for it, as for a private business, to adopt business principles approved by experience and to survey, on occasion, the rate and direction of its progress, otherwise loss is inflicted and

what governments spend their subjects must pay for. The time has come when stock should be taken of the position. We should realise how rapidly debt is being accumulated, and the urgent need for strict economy in loan expenditure. During the past five years something over five millions a year has been borrowed on the London market. The annual interest bill in London is also about five millions, in addition to four and a half millions due in New Zealand. Part of the current interest bill is being raised out of fresh loans. The' total amount of purchasing poAver in New Zealand is being increased Avithout any corresponding increase in local production to justify it. This inflation of purchasing power means, when the money is spent and circulated, an acceleration of the buying power of the public Avhieh expresses itself in increased imports from abroad. The reflex action of the ■borrowing policy is to give to business an unnatural impetus, is operating to the proved disadvantage of the primary industries, and is stifling their development. Feiv people realise that much of the prosperity of recent years is due not only to the value of our exports, but to the prodigality of the borroAving of loan moneys, authorised by Parliament and local bodies. •