DOMINION FINANCES

Wanganui Chronicle, Volume LXXXII, Issue 19440, 28 October 1925, Page 7

DOMINION FINANCES

ADMINISTRATION DEFENDED NO EXTRAVAGANT EXPEND!JURE HON. NOSWORTHY REPLIES TO SIB JOSEPH WARD. [Per Press Association.) ASHBURTON, Oct. 27. The Hon. W. Noswortny to-day maue a statement to reply to Kir Joseph Ward. He said: — “ah press reports of Sir Joseph Ward's speech, the Government is praciicauy charged with excessive borrowing since tliu end of 1919, which m<arkud thu close of the National Ministry. It has, 1 think, already been demonstrated that thu Government crcised great prudence in the expenditure of luan money, but X would point out that irom April 1,192 U, to March 61, 1925, the iruolic Debt increased by £2b,ouO,uuU, an annual average of a little more than £o,UUU,OOO. It must not bo overlooked that expenditure on public works was reduced to a minimum during the war period.. Further, in making a comparison with the prewar rate of loan expenditure, it is necessary to take into consideration tlie fact that prices and wages have increased by at least oU per cent, in the interim. Productive Borrowing.

* ‘Over the period mentioned debt under certain heads, mostly war expenses, showed a decrease of £75,000,UUO. Added to net increase, this meant that approximately £34,UUU,OUO additional moneys had been borrowed for ocher accounts. Of this sum £27,000,UUU was borrowed for productive purposes, including £I6,SUu,UOU for inter* uoc-earniug public works, notably railways, telegraphs and electric supply, and £7,UOu,uUU for Kuate advances. A further £3,700,000 was mostly expended on immigration and roads, which must be regarded as indirectly productive, while the remaining 4,3,300,000 was spent for the most part on public buiidinfs including schools. It might be hero mentioned that though the debt has been increased by £26,000,000, interest and sinking fund charges met out of taxation show no increase during this period. Taxation. “In regard to the question of taxation, Sir Joseph Ward is reported to have said ‘Next to Great Britain, New Zealand is the most heavily taxed country in the world per head of population.’ Without going i further aliold thian Australia, the latest available statistics show that the amount per head for the Commonwealth works out at £l2 6s 7d for the year ending June, 1924, compared with our rate of £l2 3s 5d for the last financial year. I would like to analyse the £l2 3s 5d per hdad for this Dominion, and see where it all goes to. Firstly, 5s 6d represents tyre tax and motor registration fees, which go to the maintenance of main highways, and are not available for general purposes. Secondly, War debt and war pensions absorb £4 4s 3d, leaving £7 13s 8d for other purposes, compared with £5 2s 9d in 1914. If a deduction is made to counteract the fall in the value of money over the war period, it will bo found that the direct burden on the taxpayer, apart from war costs, has not relatively increased. Customs Revenue.

“The speech under review miade particular reierence io Customs revenue and to big increases under that heading since 192 U. Increased revenue, However, is almost solely due to increased imports. Broadly speaking, Customs dunes for revenue purposes are levied on luxuries only, and half the revenue lor 1924 was derived from tne importation of jeweiiesy and fancy goods, spirits and alcoholic liquors, u>b<acco, motor vehicles, and eyres. Apart Horn luxuries, Customs duties are levied almost solely for the protection of our own industries, and here it might be added that the suggestions made by Kir Joseph Ward for adjusting rates are more or less truisms, in that he has practically enumerated the guiding principles underlying the present tariff. An Increase Explained. Sir Joseph refers to the increase of £8,000,000 in expenditure after war charges have been deducted. About £1,000,000 of this will be found under the heading of special Acts, and is due to increase in pensions, apart from war pensions, amounting to about £600,000, to increases in hospital subsidies, and such-liko charges. This leaves £7,000,000 increase in (annual appropriations, but this in no way represents the relative increase ml the burden of the taxpayers. Annual appropriations include working expenses of the Railways and Post and Telegraph Departments, whose increased expenses are covered by increased receipts and impose nothing on the taxpayer as such. £520,000 of ihe increase is purely nominal, being due to a change in the accounting system. Finally, it is necessary to make allowances for the world wide fall in the value of money. When these allowances have been made, it will be found that the com parative result obtiained works out per head of mean population as follows ;1914/15 £3 5s 6d; 1024/25 £3 0s 9d. I These figures afford further proof that there has been no administrative extravagance in expenditure during th( last decade.