FINANCIAL POLICY OF GOVERNMENT IS DEFENDED.

Star (Christchurch), Issue 18684, 13 February 1929, Page 3

FINANCIAL POLICY OF GOVERNMENT IS DEFENDED.

BORROWING NECESSARY FOR DEVELOPMENT.

(Special to the “Star.” ). AUCKLAND, February 13. The “ Star,” in an editorial last night said:— •* There is a great deal of wisdom, both theoretical and practical, in the remarks on public finance made publicly by Professor Copland at Christchurch. As Dean of the Faculty of Commerce at Melbourne, the professor naturally speaks with authority and the advice that he has given on public borrowing and expenditure is obviously based upon sound principles. That public borrowing for the promotion of settlement and the development of national resources should be required to justify itself on commercial or financial lines is fair argument, as far as it goes, but it appears to leave out of account the immensely important indirect effects of such expenditure in stimulating the growth of a young nation and of its commerce and industry. For example, the value to this country of the railway system initiated by Sir Julius Vogel’s public works policy' nearly seventy years ago and built out of loans, is not to be measured by reference to departmental balancesheets or profit and loss returns. “ It may be added that the experience of State borrowing and public expenditure gained by Professor Copland during his stay in the Commonwealth seems to have given his views on this subject rather a dubious and pessimistic tone. We may suggest that the chief reasons for financial embarrassments with which the Commonwealth and its constituent States are struggling, have been Australia’s small population in proportion to its area, extravagant State expenditure and lack of any centralised financial control. The loan and settlement proposals promulgated by the Ward Government, to which Professor Copland referred, are not faced by such dangers and difficulties, and therefore the financial policy of our Liberal Government is not to any serious extent open to such criticism.”