DOMINION FINANCES

Wanganui Chronicle, Volume LXXXII, Issue 19435, 22 October 1925, Page 7

DOMINION FINANCES

TREATMENT OF ACCUMULATED SURPLUS

HUGE SAVING TO TAXPAYERS. GOVERNMENT’S POLICY EXPLAINED. [Per Press Association.] 1 ASHBURTON, Oct. 21. Speaking to-day regarding the accu« mulated surplus and Public Debt, the Hon. W. Nosworthy said: ‘‘lt is, I think, fairly generally known that our (accumulated surpluses of revenue over expenditure have been applied to capital purposes, such as debt reduction, Public Works, discharged soldiers’ settlement, etc. There appears to be, however, an impression in some quarters that amounts transferred from I the accumulated surplus have been added to the Public Debt, but this is quite erroneous. In some cases those transfers have been treated as advances, and interest is paid on them to the Consolidated Fund. This is tho caso with the thirteen and a half millions advanced to tho Returned Soldiers’ Account. That account pays annually £540,000 in interest to the Consolidated Fund, but tha capital sum advanced does not appear in the Public Debt table. Public Johns have been raised for the. settlement of discharged soldiers, but they aro additional to tho amount transferred from tho Consolidated Fund. As a matter of fact, tho total capital involved in tho settlement of discharged soldiers is about £26,500,000. Reserve surpluses over tho last ten years amount to £28,000,000. As already indicated, thirteen and a half millions h(ave been devoted to the settlement of discharged soldiers. In addition, £2,600,000 has been used for Public Works, £1,200 - 000 to build the reserve fund up to two millions, and over six millions has been applied to debt reduction. A further sum of £375,000 has been invested in Bank of New Zealand shares. These transactions, apart from inerrtaso in the reserve fund, have on the one hand saved increasing the debt by over sixteen millions, and, on the other hand, have secured an actual reduction in debt of about £6,000, 000, in short, equivalent to a total debt saving and reduction of £22,000,000. As a result of using tho surplus for capital purposes in those wavs, the Consolidated Fund, and consequent' ly the taxpayer, benefit to the extent of about £1,175,000 per annum, which is a very sound and satisfactory state of affairs. ’ ’