PUBLIC FINANCES.

Star (Christchurch), Issue 19800, 18 November 1919, Page 3

PUBLIC FINANCES.

JAMES ALLEN ANSWERS CRITICISM.

[Per Press Association*.] | WELLINGTON, November 15. The Minister of Finance (Sir James Allen) called attention this afternoon to the remarks of Sir Joseph Ward in Ills policy speech at Wintoiv concerning the year’s finances. In these remarks Sir Joseph pointed out that when the Budget was delivered there was estimated to ho available for the Supplementary Estimates £178,000, whereas the Supplementary Estimates actually asked for £1,517,000. “This latter statement is not correct.’’ said Sir James Allen. “The Supplementary Estimates totalled £1,077,000. and there wag provided for in the Appropriation Act a, further £366.000, of which £340.000 was for the Butter Equalisation Fund, making a total of £1,143.000 chargeable to the Supplementary Estimates and the Appropriation Act. As to the Butter Equalisation Fund, extended over two years, it cannot ho denied that it is a fair charge upon the accumulated surpluses. and that was why it was placed in the Appropriation Act. As several months of the financial year had parsed, I was. able, whbn bringing down the Supplementary Estimates, to readjust the revenue, basing this increased revenue upon our actual experience. ’Hie increase amounted to £536.000. This' increase, added to the amount available, as stated in the Budget, will, in my opinion, he sufficient to meet the expenditure for the year, and in all probability would meet- Ihe expenditure even if the amounts provided for in the

Appropriation Act mere placed upon the Estimate?. Sir Joseph suggested that I. as Finance Minister, should hare sought, authority for extra ways and means, but in my opinion there mas no need to ask for extra mays and means, as those provided mill ho sutricient, and certainly any Minister of Finance mould seek rather to lessen taxation at such a time as this than to increase it. The ■'omplementary Fs timates mere admittedly large. Inn it ■ must, he remembered that they include j

expenditure which has already been j provided for by the National (rovem- | ment, of which Sir Joseph Ward wa.s Finance Minister. I allude to the increased pay to all departments of the public service, including the nosh office, and the increased amount required for ! the Railway Department. For the Rail-1 way Department alone '*450.W0 wn;j provided" in the Supplementary li-ti- | mates. 1 also call attention to the fact that the original Hud get. was in the hands of the late Minister of Finance (Sir Joseph Ward) and was passed on to Mr Massey, and then to me. It will he recollected that, a, statement in regard to the .position was made by mo in the Budget, to the following effect ‘When the draft Budget was placed in my hands, on September 1 last, the estimated expenditureexceeded the estimated revenue by £904,000, with the Supplementary Estimates yet to come. The heads of departments were asked to meet me, and as a result of tlieir loyal co-operation T am pleased to report. that the estimated expenditure was reduced by approximately £400.000

Provision for increased *.-xpencut,nre on account of the Education Department, which would have hern postponed for tile Supplementary Estimates. hut which is now included in the Estimates. reduced the £IOO.OOO to £200,000.’ Had the’ hon. gentleman continued in charge of the finances of the country. 1 should hare felt, it my duty to assist him in every way. T do not object to criticism, but T cannot allow any statement he makes to prejudice the public mind or alarm the [ public, generally. I desire, therefore, to ! say that T have every confidence, that, j although the burden is heavy, we shall ; he able to carry it and show a balance on the right side.”

SIR JOSEPH WARD IN REPLY. [Per Press Association.] INTERC VRX'rILE, Xpvember 17. Speaking at. Waikiwi to-night, referring to Sir James Alien s statement as sent through the Press Association, Sir Joseph Ward said that the figures lie stated at his AY in ton meeting wore quite correct. In addition to the amount, on the Supplementary Estimates ho also included the extia amounts in the Appropriation Bill and additional amounts in separate Bills which were not staled in either the Supplementary Estimates or Appropriation Bill. Referring to Sir James Allen's amended estimate of PoJti.OCK) additional revenue, he said ho could not understand why the position was not known to Sir James Allen when he said on September 23, in the Budget, that there was only £175,000 available or required for the Supplementary Estli mates. The Supplementary Estimates when brought down exceeded the provision Sir James Allen had made on September 23 by one million. Regarding the statement that. Iho original Budget was in the hands of the late .Minister of Finance, that was quite correct. ‘ It was concluded up to March 3h, and after providing for an increased expenditure of £3,553.31] tor the year ended March 31,1919, it left a surplus of £3,078,773 to comfhence the current, year. The speaker had nothing to do with the current year's estimates, uor with any of the proposals in the Budget., none ol which had been either dealt with or proposed by him. He repeated that the liabilities submitted this year were stupendous, and far beyond anything he had ever contemplated, and before he would he* responsible for such liabilities he would want to know where the money and also the wavs and mentis were to come from.

deferring to Mr Massey’s criticism at Papakura, Sir .Joseph said the Prime Minister evidently thought it necessary to indulge in foolish expressions towards him. Generalisations and abuse were at best, poor substitutes for cogent reasoning or argument. Mr Massey that, the speaker’.*, criticism was tl,tat of an irresponsible politician who was doing a great deal of harm to the financial reputation of the country. The speaker had been over thirty-two years in Parliament and had never known anything a.pprnnehing the enormous liabilities now being submitted by way of loan proposals. He had railed direct attention to it in the House and urged a reduction of over seven millions in one item alone, but it made no difference. They were still piled up. As to irresponsibility, be pointed out that nut one of the financial Acts for which he was re-

sponsible during the last quarter of 3 century had been repealed, and every one of them had proved a great success. Speaking generally, at the time bis opponents had opposed them and predicted disaster and failure. The saving of the hank of Now Zealand was ai ci‘e in point. It was predicted it, would be a huge lose to the country. It had pioved to be the very oppositeThe country had not lost a penny, and thousands of people had been saved from financial ruin, while the country itself had been saved from a disaster from which it would have taken fifty years to have recovered. The Advances to Settlers Act was predicted to result m blue ruin. The State bad lent to 1 settlers and workers £21,000,000 at AJ , per cent, and after repayment of the i loans had netted a profit of ■j £900,000 from the settlers’ branch I and £OO.OOO from the workers' branch. The Advances to Local Bodies were denounced as excessive, but not a shilling had been lost. The cost of the New Zealand Dreadnought, about two millions, bud all been provided for by special taxation and the lull amount paid off. He hud provided a sinking fund for the whole of the

country's loans, ami there was now a. total of £5,951,065 at the credit of ‘ ordinary loans incurred. He had also provided a surplus,of over fifteen millions for the repayment of war loans, while Finance Minister in the National Government, and this was being annexed by the present Finance Minister for use in payments in New Zealand. He regarded this a huge blunder and it would prove to be so. It was beyond the capacity of the country to raise half the loan moneys required within New Zealand during the next four years. Necessity would force- them to go to England and possibly to America for a very large proportion of their loans. If fifteen millions were kept intact as a sinking fund they could raise treble the amount of it at a comparatively small discount to what would be the case without the fifteen millions at credit of sinking fund, Money-lenders in either lyondon or New York would regard lending to a country with such a line sinking fund reserve in an entirely different light to what they would to one without a war loan sinking fund. New Zealand could not risk depending upon her own resources to supply the millions necessary for reconstruction due to the war. The difficulty in getting the last war loan subscribed, and it was a forced loan, surely demonstrated this. It would be sheer and unadnltcred madness to expect to get all the money that was required here with tree loans. 1 and even if banks and private money lenders from a spirit of loyalty and support to the country were to do so it would create such shortness of money and financial strain that he for one would be afraid of the roiisorpioucos to tTHflovs, settlors aikl industries. They would be f bound to suffer to an extent hitherto unknown. He had no objection to being called ‘■an irresponsible politician” by Mr Massey hut was quite willing to leave

Jus public record to _ the judgment of the people as to whether he had in any respect in the past been irresponsible. Former Liberal Ministers of the .National Cabinet had made no innuendos nor east any imputations of incapacity upon any of their Reform colleagues n , nn - v cr ’ t ’ l ’isni of proposals of "’the Reform Government since the National Government ceased to exist. It was evidently considered justifiable by the Prime Minister to east reflections upon those who had hoeii associated with him during a- trying and difficult period in the country's history. The National Cabinet in the speaker s opinion had done magnificent work and he was not going to cast any doubts on the ability or good intentions of his former colleagues in that Government. Now we had the surprising position that the Prime Minister and Minister of Defence sought to justify their own proposals, made quite independently of the National Government, by easting reflections upon those who had helped to the utmost of their ability the part that New Zealand played in assisting to retain the free and glorious British Kmpire. Dealing with the general financial position, Sir Joseph said: “From Mr Massey’s statement we get an extraordinary position.” The ,total expend!- ! tore provided for by the Government was the unprecedented sum cf £60,000.01)0. Mr Massey now said that the actual commitments totalled

£31,26*2.000. That was, of course, in addition to ordinary expenditure, but that it would not be possible to spend one-fourth of that in the period- Tf that was so why was £60.000,000 asked for? “Mr Massey accuses me of electioneering.” said -Sir Joseph, “because I suggested in the House a further two millions expenditure on returned soldiers. "What suggestion can he made regarding the enormous sum for which lie got authority from Parliament and in regard ,to which he declares that only one-fourth of £31,26*2.000 is required? Was that done for electioneering? According to his own argu-

ment it was. Mr Massey may say my j criticisms were ‘ the most arrant non-1 sense- a politician ever spoke,’ but any fair-minded person will ask what WiVs the necessity to ask Parliament for those huge millions if Mr .Massey himself says only a fourth of them can he spent. If that is so, all the more warrant for my criticism that the starvation policy adopted for railway, roads and bridges construction. as well as for hydro-electric systems, is inexcusable and certainly detrimental to the welfare of the country. “ If there is any class in this country we, should be generous to it is returned soldiers and their dependents. The soldier placed his life at stake for onr snkes. and I do "not mind what Mr Ma s*ey or anyone else says of me on account of my views in that respect. I will still hold that view, and I am convinced tlto country will endorse.

THE POST AND TELEGRAPH BONUS. Sir Joseph Ward said he had read Mr Coates’s statement in the Press today. and noted that it was still intended to appoint someone to inquire into what was promised by the speaker to the employees of the' Department by way of bonus. All he could say was that it was an extraordinary proposal, unique in the Dominion’s history and probably in that of any other country. He had full sympathy with the statement; that if the war" bonus referred to was paid to officers of the Post and Telegraph Department it would have to be paid to. officers of other State Departments. He felt that was a proper thing to do. It concernpci the rank and fit© oi tli© sgvvim-s nnd did not affect the higher-paid officers. As it meant equal treatment to the lower-paid men of all the other hranehes of the public service, he would give the Government his Ml support m such action.