THE FINANCIAL POSITION.

Dominion, Volume 5, Issue 1512, 7 August 1912, Page 6

THE FINANCIAL POSITION.

Fon many yeavs the country has benn kept in the dark concerning the national economy by the suppressions, distortions, and sophistical jugglings of figures which made up that "financial wizardry" which the country is now we.U -rid of. To any attentive

reader of the strictly financial pages of tho Budget it may appear strange that Silt Joseph Wakd so persistently avoided the candour, fulness, and simplicity of Mr. Allen's analysis of the situation. He had in 1906 a wonderfully fine opportunity to institute the era of candour and straightforwardness; but he apparently was constitutionally unable to state plain facts fully in ;i plain way. Mn. Allen's task was to state the actual position, in large and in detail, and his first business was to clear away the impression, which the late Government attempted to create as a matter of party tactics, that the Massey Government was taking over in the financial position a magnificently husbanded estate. Just after the defeat of the Mackenzie Government, Mr. A v M. Myers produced what professed to be a full and candid financial memorandum, and the member for Awarua and others, of course by pre-arrange-ment, feigned a delighted amazement at the excellence of "the wicket" upon which Mr. Massey's financial colleague would g_o out to bat. There was a balance ot £782,547 on June 30, and there were unexpended loan authorisations totalling 4J millions. What more oould anybody want? In a most instructive table the new Miriistcr upsets this childish trick very completely by showing in detail the huge liabilities that tho retiring Government was careful not to announce. The member for Awarua did say, when Mr. Allen raised this point by an interjection on May 9, something to the effect that liabilities were left over every year and could so be neglected. But what are the facts 1 On March 31, 1911, tho balances in the Public Works Fund exceeded the liabilities by £230,000; on June 30, 1912, tho liabilities exceeded the balances by £870,000 in round figures. In the State Coal Mines Account the balances on March 31, 1911, were £33,000 to the good; on June 30, 19 <■-'. they were £5000 to the bad. The only real asset for going on with that Mr. Allen found in most cases was the fact that he could borrow more money without obtaining fresh authority—just'the sort of asset that he might have expected to find as tho legacy from a Government whose, theory of natioual finance consisted simply of tho one word "Borrow." Special attention is directed by the Minister to the condition of the Public Works Fund and of the State Coal Mines Account. Beginning the year 1911-12 with a balance of £1,210,751, the Ward Government brought the credit side of tho Public Works Fund, by borrowing and by a transfer from the Consolidated Fund, to £2,350,793, and it spent all of this save £80,000 odd, and had incurred enormous liabilities in addition. It .had, that is to say, worked throughthis fund to embarrass tho Reform Government—a very great part of the work of depleting the Fund was performed since the elections in December. One can only with difficulty avoid the thought that a. deliberate attempt was made by the discredited "Liberal" Administration, in the interval between being sentenced and being executed, to make things as difficult as possible for the Reform Ministry and for tho country. But Mr. Allen found also abundant evidence of that unpatriotic slovenliness and recklessness which the advocates of financial reform have for years been assailing. Throughout his Budget there are official facts of an astonishing character. A net loss for the year on the working of the Aαvances Department; unsoundness in the superannuation funds, confess-' edly due in one case to erroneous instructions .to the actuary; a heavy deficit and plenty of evidence of the utmost folly and carelessness in the financing of the State coal mines— these are only a few of many illustrations of the deplorable stupidity and recklessness of "wizard" finance. Although throughout the Statement there is an obviously studied avoidance of a polemical tone, the case against the bad and improvident administration of the Continuous Ministry is .made very strong. For nothing could be more damning than the bald facts and figures of the Minister's survey. The so-called Liberal party has made a glorious muddle of the national finances. It has not done any irreparable damage; indeed, much of the damage is exceedingly easy to repair, no other tools being necessary, in a country which is by nature so happily situated, than honesty and oommonsense in the Minister for Finance. Mr. Allen announces several reforms so obviously natural and desirable as to bring out in sharper colours tho weaknesses, to use no stronger word, of-Wardist finance. It is "a moro matter of bookkeeping," for example, to, keep the proceeds of land sales out of the ' Consolidated Fund —almost a trivial ' reform; but it is a reform that cuts '. at the root of Wardist methods, and squares national financing with national interests. But we have not space to-day to deal with all t; points at which the Minister finds that by applying sheer commonsense and good management to the finances he can effect savings and improvements thai even SiR Joseph Ward had no party advantage, to gain in leaving uneffected. The. fact is, that the incompetence of Wardist finance was quite as notable as the disingenuousness of it. Mr. Allen or anybody else could not touch the national finances without improving them; but it is very satisfactory to know that the new Minister aims at | thoroughness in financial reform. He is presented- with a position made difficult by incompetence and grossly bad rolitics, but the country is now in a mood 1o support him'and his colleagues in their work.of restoring fafety and sanity, not to mention ' honesty, to the financial administration of the nation's affairs.