VERY SATISFACTORY ARRANGEMENTS

Dominion, Volume 8, Issue 2288, 23 October 1914, Page 7

VERY SATISFACTORY ARRANGEMENTS

THE DOMINION'S FINANCES

THE ADVANCES OFFICE

An important statement in regard to the finances of the Dominion was made in the Houso of Representatives yesterday afternoon by the Minister of Finance (the Hon. J. Allen).

Mr. Allen, in the first place, referred to the operations of tho State Advances Department. 'Die maximum amount of advances to workers, which had stood at £350 since the outbreak of the war, had been raised to £400. Ho did not know whether it would be possible later on to restore the limit to the sum of £450, at which it stood prior, to the war, but a considerable amount had been paid out to workers oven under the £350 limit. The increase, now made would, ho hoped, do a great deal to provide work for unemployed carpenters. In regard to loans to local authorities Mr. Allen pointed out that provision had been made in the Publio Works Estimates for various • £ for _ £ grants, and unless the local bodies were enabled to raise the amount of their share of these items of expenditure, they would not be able to avail themselves of tho grants. It had therefore been decided to make advances to local bodies up to £1000. This was not a large amount, but it would enable the local bodies to avail themselves of nearly all the £ for £ grants on the Estimates. It would probably bo possible later on to improve the amount. > • .

Mr! Allan said that he had been in communication with the High Commissioner in regard to she loan falling due i.a December as well as the loan for tho Dominion's current needs. He was advised that under present conditions it was not at all possible to raiso either stock or debenture loans in London. All that could bo done was to arrauge for immediate requirements through the issue of Treasury bills. He had already, before the war ' commenced, obtained power to issue Treasury bills in London, and by this means it would be possible to provide not only for tho lean falling due in December, but also for the requirements during the year. Sir Joseph Ward asked now much had been advanced to workers undor the reduced limit. The £1000 limit for local bodies would be very valuable to some local bodies, but to others it would be cf no use at all.

. Mr. Allen: It is better than nothing. Sir Joseph Ward said that the carrying! on of local public works was perhaps more important than that of tho Public Works Department. He asked how much money had been advanced on Treasury bills in London and' what rate of interest was paid. Personally ho had never known any difficulty in raising money in London.

Mr. Nosworthy (Ashburton): You have never had a time like this!

Sir Joseph Ward said that his experience was that there was no difficulty in obtaining money-in London so long as the borrower was prepared to pay for it. ■

Mr. Allen: What rate would you go up to?

■ Sir Joseph Ward: I would keep it as low as possible If I wero making a statement to the House about it, I should say what I was paying. Mr. Allen said ho was very pleased to give the honourable gentleman all tho information available. Last month the amount paid over to borrowers from the Advances to Settlers'; Branch was £108,960. From the Public- Debt Sinking Fiuid branch there was paid over £0100. Under the Advances Office Sinking Fund Account thero was paid over £21,230. The amount authorised by the board for the month of September was £38,165

With regard to advances to workers, the amounts paid over with the restriction down to £350 wae £30,135, and the amount authorised by tho board was £14,740. Advances to local bodies had been temporarily stopped meanwhile, but the amount paid over for the month to local bodies wa-s £26,325, under the Advances to Local Authorities Account, under . the Office Sinking Fund Account £2475, and under the Public Debt Extinction Fund . Account £2480. The amount of loans authorised during the mouth was £4500. Now he proposed to remove the restriction, and after this date advances would be made to local authorities of up to £1000. He hoped if all went well to increase tho amount still further.

He had.been asked to make a.statement with regard to Treasury, bills in London. The only advances that the Government had received from London were £400,000, and they wore for the war fund account, under the War Loan Bill. This money had not been secured from speculators. It had been advanced by the Bank of England at a rate of interest that he was not at liberty to disclose at the present moment. ' Mr. Myers said that in Australia it had been announced that tho rate at which money had been obtained was 5J per cent.

; Mr. Allon (laughingly): I am not going to say Now Zealand is borrowing at 5} per cent, because that is not the rate. We are not paying that price. I am not going to disclose tho _ rate, because I am asked by the Imperial authorities to keep it secret, the reason being that the terms are exceptionally favourable. 'These advances,.he continued, wero Treasury bills for. six months. They would he met out of the loan which the Imperial Government were going to raise, for the Imperial Government would raise enough to furnish to New Zealand sufficient to return the advance made by the Bank of England. It was highly gratifying to him to bo able to report to the House tho very satisfactory arrangements that had been made. He ventured to say no other Dominion had made moro satisfactory arrangements. He, might even %o further- than that.