PUBLIC WORKS BORROWING

Waikato Times, Volume 125, Issue 20887, 19 August 1939, Page 6

PUBLIC WORKS BORROWING

Further opportunity to discuss New Zealand’s public works policy will be afforded by the introduction in the House of Representatives of the Finance Bill, which gives the Government power to borrow £22,700,000 for public works and housing. The first question the public will ask is, “Where is the money coming from?” It cannot be borrowed overseas, and that leaves only two apparent sources — an internal loan or further advances from the Reserve Bank. If the Reserve Bank Board’s advice is heeded, the only source will be an internal loan. “Against the security of the public revenue” the Minister is empowered to borrow £15,000,000 for public works, £2,200,000 for the construction of main highways, £1,000,000 for electric power works, themselves purely public works, and £3,500,000 for the erection of State houses. Especially for a Government which roundly condemns previous administrations for their borrowing policies, this is a very heavy addition to the national debt. Some of it, especially that relating to defence, is essential, but it is rather remarkable that at a time when the Government admits it is facing financial difficulties, and when unemployment “does not exist,” the State should plunge into such heavy expenditure on works that could well wait for a more favourable opportunity. Can there any longer be doubt that unemployment and the desire to relieve it are the driving forces behind a large part of the public works expenditure ? If the Government’s general policy had created places in the productive industries for most of the men now employed on publii works, would those works be carried on to the same extent ? It is certain that they would not, and the Government would be greatly relieved at the removal of the need for such heavy expenditure. The Government ii*wA£ has been trying desperately to transfer public works employees the industries, and to the extent that it has failed in this endeavour it is spending borrowed money to cover up what otherwise would be unemployment. The taxation of wages and other income th >: formerly relieved unemployment has been diverted to Social Security; hence continued heavy public works expenditure. Before the end of the financial year an internal loan seems to be indicated, but whether the Government will be able to raise the whole of the £22,700,000 by that moans is not so certain.