THE DOMINION'S FINANCES.

Press, Volume LVIII, Issue 17469, 1 June 1922, Page 6

THE DOMINION'S FINANCES.

STATEMENT BY MR MASSEY. j OTAGO UNIVERSITY'S REQUIREMENTS. (special to "the TRESS.'*) DUNEDIN, May 31. The Prime Minister gave a straightforward reply to-day to a deputation from the "University Council, which asked for a new dertal school building and extensions to the medical school and other concessions. Mr Mnssey said: I cannot do financial impossibilities. There- is the whole trouble. Hero is what is happening. I havo one section of the community clamouring for reduction of expenditure and for reduction of taxation, and 1 don't wonder at it. There are people to-day paying taxation out of tho scanty wealth they happen to possess mimv thousands of them. I know it because I am the tax gatherer of this country, as well as having the opportunity of spending most of the revenue collected. Then another section comes along and says I am not spending enough—that I ought to do a great deal more. What am 1 to do under such circumstances? , , Mr Massev went on to say that last rear three and a half millions woie spent on education—double the expenditure in half a dozen years. He had had very <few complaints about the expenditure on education. He thought that the people were marvellously patient. Taking the deputation s case, ho was anxious to do what he could. They asked for £SOOO f«r a bin ding for an ethnological wing, £30.000 ror a dental school, and £75,000 for a medical school. Then they wnuted ham to give up the 5$ per cent, that might bt charged on a loan. He was not quite sure that it would be charged. Then they wanted more money by «»J of superannuation and a refund ot tees. He sympathised with the refund of tees Taking superannuation, tho cost ot n had gone up enormously and there must be a readjustment there. He would bJ quite happy if he got out tho expenditure undo? the heading "superannuation'' at under £200,000. It would come before Parliament, and they would hear more about it then from members. . , , ~„i_ "I want t 0 do what is absolutely right," continued Mr Mnssey. ihave always thought that money expended on education is well and properly expended, but ir, a time like this, with a slump that tho country has not experienced for thirty years-I have been in public life for ' years myaelf-one has to be cautious The people in the meantime have grown up, and do not know what a slump means. We have to meet tremendous responsibilities. 3me « n ° mentioned that we have borrowed five millions. So we have and wo nave 6700 men employed on public, works today, and they have to be paid. me whole of tho business of tho country requires readjusting to meet the changing conditions that are taking place, and until then we are not going to get back to prosperity, which depends very largely on our exports and the priced we receive for them. From that point of view things are very much better than they were. All the same, it will be a full year before the finances of the country get the full benefit of the returning nroswrity. From the Treasury point of view we have not benefited to the extent of a single shilling, except in a few articles on which, the Customs duty was increased last year. In addition, we are going to be down two millions this year in income tax, and we were down over three and a quarter millions in Customs duty last year. Understand this. We can borrow, our credit is good; wo hay© been marvellously successful in getting, the money we require, and in getting it at 5 per cent. The railways last year only paid 1 per cent, on the cost of construction. I hope they will do better. There is a slight improvement in the railway business already. Tho mora we borrow tho more we havo to tax the people. I don't say wo can do without borrowing. I knew we cannot, and we will have to get a little more than five millions. I know where to get it, but I cannot go back to London until after March 31st next."

Continuing, Mr Massey said he was going; to do the best he could for the deputation, but ho could not commit himself in the circumstances to pny large expenditure other than the carrying on of public works at present in the course "of construction. "I am sorry to sav that I am unable to give you £50,000 before the financial year comes to an end, because I am hot able to find it. lam going to have difficulty in balancing the present year's accounts. If I don't have the difficulty I am thinking of, no one will be better pleased than myself, but 1 cannot find you anything like the amount of money you are asking for. I ask you to make your demands as gently as you possibly can until we get through this slump. When we get through, then you can come along and ask for money, and I don't think you will be disappointed."

REVIEW BY OTAGO A. AND P. SOCIETY'S PRESIDENT. (SPECIAL 10 "the press.") DUNEDIN, May 31. Speaking at the annual meeting of the Otago A. and P. Society to-day, Mr E. C. Hazlitt, as president, reviewed the financial situation. He said: The swing of the financial pendulum is most easily discerned in banking and mortgage returns. Taking the firstmentioned for the past three years, tho decline in deposits and the increase in advances, excluding Government transactions, shows very clearly how credits were eaten up and overdrafts increased in proportion as the oversea markets began to feel the deflation in values, from a producers' point of view. The mortgage returns are perhaps even more convincing. The last three years cover the boom and the slump in real estate, and in that short period there were registered in New Zealand mortgages for £150,301,658, while £t0,23-!.-820 was discharged. This shows a net increase of £85,006,838, and a grand total of £231,267.205 on mortgage on March 31st, 1922.' These borrowings on overdraft and on mortgage, mean in cold print that we are living beyond our means, and that land values, wages, cost of living, and personal and publio expenditure will have to be readjusted, and tho sooner tho better for everyone. Wc take prido in saying that Otago agricultural and pastoral interests arc on a much sounder footing than in some other parts of the dominion, but even in this province too much credit has heeu expected on the one hand and given on the other, with the result that to-day many an honest and hard-work-ing fanner finds he has taken on responsibilities which prevent him doing justice either to his family, Ins farm, or himself, it is high time that we all remembered that land, stock, or goods bought on credit constitute a liability, and are much more likely to bo a source of weakness than a source of strength, both to debtor and creditor.