THE FINANCIAL, LEGACY.

Dominion, Volume 5, Issue 1488, 10 July 1912, Page 4

THE FINANCIAL, LEGACY.

When wo discussed yesterday morning tho difficult financial position created by the Ward Administration (the Mackenzie Administration can hardly bo said to count), we hardly expected that as his last act the lato Minister for Finance would attempt to pretend that he was handing the finances over to his successor in the flourishing condition which he declared yesterday. Mr. Myers read a miniature Financial Statement, consisting chiefly of figures, and supplemented it with some brief observations upon what he called "the fine condition of the country's revenue and the healthy condition of the public purse." The two foundations upon which he, and the member for Awarua, who followed him, based this contention appear to be, first, the fact that on .July 1 tho unexhausted loan authorisations amounted in the aggregate to 4| millions, and, second, that including tho balanco of £807,276 the year 1912-13 may end with a "surplus" of £1,084,227. Financial stability does not end or begip with, "unexhausted loan authorisations," and the only conclusion, of any sort whatever, that can bo drawn from the fact that Mr. Massey can borrow millions without obtaining fresh authority is that the Ward Administration had arranged matters sot that it could have borrowed nearly 10 millions inside twelve months. Such a wild 'authorisation in profligate hands is a dangerous thing. The "estimated" "surplus" of £1,084,227 for 1912-13 turns out, on examination, to consist mainly of an opening balance of £807,276. Mr. Myers cannot venture, oven taking the rbsiest view, to predict that the actual revenue will exceed the expenditure for the year by more than £276,951, and this although the revenue in 1911-12 exceeded the expenditure by nearly half a million more than that. The "estimate," too, does not take account of outstanding liabilities, as Mr. James Allen pointed out; and tho member for Awarua made a statement on this point that appears to us to be involved and incomprehensible. You keep on carrying your liabilities over, apparently. We discussed the other day tho British practice— which Mr. Lloyd-George has shown himself anxious to subvert—of maintaining tho principle of "annuality" in tho public accounts. In New Zealand a balance is carried each year into the' noxt year's accounts, confusing the public and Parliament, and making sound annual budgeting difficult, if not impossible. In the present case, tho New Zealand practice disguises, for example, tho fact that owing to the enormous increase of expenditure, Wardist finance, if continued on present lines, would produce a deficit in 1914. Tho actual revenue in 1911-12 was greater than in 1910*11 by £735,521, but the expenditure increased in the year by just under a million—£9S)7,262, to be exact. Let that bo repeated, and how long would it be before the expenditure exceeded the revenue? It is because of the rise in expenditure that Mr, Myers hands over to Mr. Massey the prospect of a year in which the expenditure is estimated to rise to over 90 per cent, of'the revenue, and of a record revenue at that.

It was fche purpose of Mb. Myers mi £h§ maaba iac Awaim

to mako ono last attempt to pretend | that Mr. Massey has inherited h brilliantly-managed financial estate. "We have left you well on the way,"

they said in effect, "to end the year with a million surplus, and if you do not bring about a millennium forthwith it will be your fault." Yet the fact is that taking the most optimistic view they dare not estimate a bigger "surplus" of revenue over expenditure than one £200,000 less than the one they , had constructed themselves during 1911-12. Their own figures disclose that the Ward and Mackenzie! Governments wero drifting rapidly out of their depth, and that it is not too soon that profligate financo has' been condemned by the nation. In conclusion, w.e may say a word or two upon the statement by the member for Ghristchurch North that The Dominion yesterday "represented the colony as being on the verge of bankruptcy." This is,-of course, quite untrue, due, we assume, to this member's ignorance of public finance. Wo emphasised the evils of Wardist management, but we expressed our confidence in the ability of any honest Government to restore health and vigour to the nation's finances. Mr. Isitt confessed that he "did not pose as a financial expert"; he cannot now even pose as a caroful and intelligent reader of newspapers.