“FINANCIAL ORTHODOXY”

Waikato Times, Volume 127, Issue 21157, 5 July 1940, Page 6

“FINANCIAL ORTHODOXY”

In the absence of political unity, the financial debate in the House of Representatives is following the same old lines of criticism and rejoinder which will probably leave the position as it was before. The Opposition is declaring that civil expenditure could be reduced substantially in several directions; the Government is simply defending the stand it has taken in the Budget. The Government can command a majority of votes, and the proposals of the Budget will be carried into operation. Therefore whatever wisdom might be contained in the Opposition’s arguments is wasted. If New Zealand desires to obtain the best from the parliamentary machine in a time of war the Government’s proposals and the modifications sought by the Opposition should have found combined expression in a Budget prepared from a pooling of the nation’s wisdom. Mr J. A. Lee accuses the Government of financial orthodoxy in times which demand something more imaginative. Mr Fraser disclaims orthodoxy as a fixed policy and declares that the Government will, if necessary, use powers which previously have not been tried What that statement may mean is not further explained. Mr Lee hiß based his amendment mainly on an advocacy of the employment of the “public credit” for the financing of the war programme. He says that the Government by expenditure (irrigation and housing were mentioned particularly) has created additional production or assets against which public credit could be issued. He argues also that no use has been made of the public credit to increase internal production.

Because the Government has failed to draw upon this mysterious source of wealth it has been attacked for clinging to orthodoxy in finance. Whether this is to be the untried method which Mr Fraser says will be used if necessary remains to be seen. The Government proposes to borrow £15.000,000 for public works in the current financial year. Mr Lee would solve the problem quickly, if he had his way, by launching large quantities of public credit on an angry financial sea, but the Government feels the need for caution. Tt has been warned by Mr Nash that New Zealand has already spent in the past four years £28.000.000 more than its “public credit” warranted.