MR. SULLIVAN ADHERES TO HIS FIGURES

Chronicle (Levin), 15 June 1946, Page 6

MR. SULLIVAN ADHERES TO HIS FIGURES

SAYS MR. HOLLAND IS CONFUSED WELLINGTON, Junc 13. "To review in dctail cach of the 19 separate accouhts which form part of the pubiic accounts as publishcd in thc Gazette this week, would not assist in giving a clearer picture of the pubiic linances," said Hon'. D. G. Sullivan when asked to eomment on the state ment by the Leader of the Opposition, Mr. Holland. "In nearly every case the opcratious of the separate undertakings for which there are separate accounts, are reflected in the main account (Consolidated Fund) and it is customary, as Mr. Holland admits, and uecessary only to deal with this account When determining the surplus for the year. The other major accounts, Social Seeurity Fund and War Expenses Account, which are fmanced largcly from taxation, were also dealt with in my previous statement because they are of particular interest to the pubiic. They liave been referred to iii similar statements eaeh year. Tlie id^a of keeping separate accounts is not original nor is it exclusive to the present Government as the form of accounts just published foliows closely the procedure of many years through the administration bf successive Government. In many respects this continuity is desirable as it facilitates coniparisons with previous years. The pooli'ng of 'the various accounts as' suggested by Mr. Holland, would be 'extremely misleading, particularly as it would, in eft'ect, involve the mixing of revenue and loan moneys. "Mr. Holland 's calculations to produce an alleged surplus of £40,000,000 take into account Lend-Lease receipts and loan moneys borrowed for war purposes during the ,year, totalling £64,020,000, and a further £11,270,000 receivcd from the realisation of war assets. Such items obviously should not, be- included in a summai'y intended

;o show the revenue surplus for the >'ear. It is neitlier the practico nor thc ntention of the Government to resort ;o such a. procedure. "Another instauce of eonfused i'easoning is the reference by Mr. Holand to the case of the Electric Supply Account," added Mr. Sullivan. "This .s a separate trading undertaking and .ts accounts should be kept separately xs is done at present. The account incets its full obligations to the Oonsolidated Fund and any surplus is rightly retained in the Electric Supply Account. Similarly with other trading accounts, the results arc reflected in the Consolidated Fund which receives interest on capital involved. In certain cascs wherc required by legislation, anuual profits are paid to the Consolidated Fund. , "Referring to the Social Seeurity Fund, Alr. Holland states 'that the people should know how much it is costing and where the money comes from. ' It was for this reason that a separate fund was established and it does sho\V both the total expenditure and sourees of revenue to meet such. expenditure. It was never intended that social seeurity as such would be iinanced solcly from revenue collected direct into the fund, coutributions from ordinary taxation always having been intended to be an essential part of the sclicmc," continued Alr. Sullivan. "Alr. Holland states that gratuities are part of the liabilities to be met in current or future years but the Government does not agree with the policy of holding over such, commitments. yervicemcn and women are entitled to their gratuities as at April 1, 1946, and it was only reasonable to provide casli as at Alareli 31 so that it could 'bc available immediately if dhsired. "The fact that £27,500,000 has been provided for debt repaymeut is commented upon by Alr. Holland who appcars to hold the view that war debts are best left unpaid. As has already been stated, the major part of this was applied- in repaying an overseas debt due to t&Qg LTi»tadas 8®p%d'wi|^iiiovcii^ ment and was Iinanced iu part by the issue in New Zealund of the £8,000,000 Treasury bills referred to by Mr. Hotland. Alr. Holland mixes his comments on the accounts "as published with the proposuls for the iiresent year but it

was not intended," continued ALr. bullivau, "to provide at this stage a proview of wliat was to come in tlie Budget. My carlicr review dealt only with thc facts as disclosed by the accounts for thc past year. Alr. Holland 's statement is merelv an attempt to confuse the position. lle glibly spnaks of a 'bribery' Budget when he has no idea wliat the Budget will contain. He advocates a change in the form of accounts — a foriu which has been iu operation for many years — aud he completely confuses revenue with loan moneys, proeeods of asset realisations and reeoipt under Lend-Lease. "The cold fact remains that the linances of the country have been safiely and prudently administered and the country has emerged from a difiicuit year with a surplus of £1,254,000 correctly computed in relation to the year's revenue and expenditure. "In conclusion I appreciate Mr. Hoi land's forecast of the contents of the Budget and his terror .at the possibilities inherent in his mythical £40,000,000 surplus. If he sincerely believes in the correctness of his own amazing calculations, I can imagine that it must be truly a nightmare to the Leader of the Opposition. The fact is that his astronomical surplus has been built up in his mind by including loan moneys, LendLease receipts, etc., and that such items are not available for concessions to the pubiic. This will, I am sure, relieve his political terror but will not increase pubiic confidence in the ability of himself and his party to understand the finances of the country."