BORROWING AND SPENDING

Dominion, Volume 6, Issue 1589, 5 November 1912, Page 6

BORROWING AND SPENDING

The debate on the Loan Bill in the House' of Representatives on Friday evening last was v of interest as giving an insight into the views of the Government on the subject of borrowing. Tho Reform party has always been careful—perhaps oVeicareful —to make it clear that it recognises that a certain amount of borrowing is necessary to enable the developtnent of tlie country's resources to proceed at a reasonable rate. The late Mr. Sepdon, .shortly before his death, made a point of emphasising the necessity- for_ a "tapering-off" policy in connection with State borrowing, but lie did not put this policy into effect, and his successors cast it to the winds. The,: Ward Ministry greatly increased .'thei ratq of borrowing instead of cutting, it down, and in consequence made the task of the Reform Government, on its accession to office,■'the more difficult. The present Minister of Finance,. Mr. JaiSies Allen,..in his review of the financial position on Friday evening, spoke somewhat r,ptimistrcally concerning the' futmC credit of. the Dominion in the matter of borrowing, fie expressed the view that the credit of New land should he higher than that of most other borrowing countries, and he-gave some sound enough reasons why that should be the case. But if Mr, Allen expects to realise the happy position which he claims this country should occupy, he will find that the quickest road to the purse of the financial world is to make it clear beyond all doubt that New Zealand is not merely going to rely more extensively on its own ' resources, but that when it does borrow it is going to .see that the money is well and profitably spent. It is satisfactory to note that both Mr. Allen, and Mr. Fraser, Minister of Public Works, touched on this phase of the borrowing question in the course of their speeches. Far too large a proportion of loan money--in the past has been wastefully spent and far too much has been diverted into wrong channels to serve .the political necessities of the moment. '• The nonsenso that was talked by the member for Avon concerning the advent of the Beform Government depreciating 'the value' of New. Zealand stocks affords an illustration, of the unhappy frame ..of mind in. which a •certain Class of mombers approaches large issues of importance. Mr'. Russell cannot 'superibr: to,' petty ' party considerations. ' We I doubt if there, is a single member'of the House who .does not know that . the state of the London money market has nothing whatever to do with the Massey Government. The causes which are at the moment Influencing detrimentally the stocks of all countries are no more attributable to the New Zealand Government than they are to Mr. Russell himsolf, but because MR- HussELL is opposed to the Government he thinks it fair and proper to attempt to cast on it the blame. The member, for Avon is not likely to' increase his chances for the leadership of the party he belongs to by such transparent .humbug ; nor' is his conduct calculated to strengthen the credit of his party in thfe e.yes of the public. The determination of'the Minister of Finance to visit London at an early date is a wise one, • It is desirable : that he should get into personal touch with the loan agents of the Dominion in London. In addition to the proposed loan to be raised at the earliest convenient opportunity, there is. the question of renewals to be considered. Tho now Government has been left a heavy and embarrassing legacy of loan renewals to be attended to, and the Minister of Finance will require all the., firstr hand information available to successfully meet the necessities .i'of the situation.