REFORM FINANCE

Dominion, Volume 8, Issue 2324, 4 December 1914, Page 19

REFORM FINANCE

The flnanoia! administration of tie Massey Government in itself entitles it to the support of all who desire to see the affairs of the oountry capably managed. For the plunging and slipshod finance of the Wardist regime it has substituted sound and prudent methods with the result that the country has suffered little under the conditions imposed by a great war. This is an important fact which must impress all who trouble to think at all ahout the tcatter. The reronne is buoyant, all "reasonable demands upon the Treasury are being met, the State Lending Departments have poured out a steady tide of money during months of war, and so have kept the wheels of progress moving, ana are in a position to expand their operations. Contrast these conditions with those of 1909 when a temporary financial stringency struck such panio into Sir

Joseph Ward that he turned something like a thousand Civil Servants out or their employment. ' . Or- contrast the present prosperity with what obtained m the election .year of 1911 when Sir Joseph Ward ran'the Stata Advance Department to a standstill in his anxiety' to placate wealthy boroughs, with' large loans. -; The Massey Government is not giving way, w panic. It is not* driving X'ivfl Servants out of their employrcsnt •'and it is not squandering the funds of the State Advances Department in eleotion year. It relies upon safe and prudent management to keep the country; going as if there were ho war. That is a big thing to do, but who can deny that the Government has successfully done this up to the present time and has made plans and arrangements

A RECORD OF ACHIEVEMENT BORROWING REDUCED RESULTS OF PRUDENT CONTROL

by which it oan, if re-elected as it expeots to be, oohtinue its good work P A BUOYANT REVENUE. Expenditure must increase under nearly all heads as the country expands and develops, but revenue exceeded expenditure by £652,233 in 1912-13, and by £403.797 in 1913-14. The revenue returns last year were reduced by the strike and smallpox epidemic, but even with these handicaps the excess of revenue was nearly twice as great as in 1908-9 and 1909-10, two years of the Ward Administration. f In 1908-9 the excess of revenue was only £216,473; in 1909-10 it was £247,995, and nothing was transferred in that year from revenue to the Publio Works Fund. ' •'The Massoy Government transferred £750,000 from revenue to' the Publio Works Fund in 1913, and £675,000 in 1914. It now proposes, in spite of the

REFORMATIVE TREATMENT.

[ strain imposed by the war, to transfer r £350,000 to the f'ublic Works Fund for the year ending March 31 next. These [ figures, taken from the official records, ' speak for themselves. ' i Dospite hoavy calls upon the resourcos • of the country, and abnormal factors tending to temporarily depress revenue, the Government has been enabled to show a substantial revenue surplus at ,the end of each year of its' administration. of 1914 was £420,906, and that of 1913 was £709',50'8. The surplus last year was out down, by causes which- no Government oould. have_ foreseen or averted. The-Opposi-tion indulged in cheap sneers about the effects]of the smallpox epidemio and the strike, but cheap sneers will not get rid of the hard faots that the strike and I smallpox epidemio between them coat the country (in direct cost and loss of railway revenue) no less than £294,000. DECEPTIVE METHODS ABOLISHED. The Massoy Government has instituted financial roforms which enable

the aotual position of the oountry to bo disclosed. Under Wardist methods the apparent surplus last year would have been increased by-nearly £100,000, by the inclusion of £81,000 derived from the sale of Crown land and £10,000 which the present Government sets . aside annually as a sinking fund for public buildings. The Ward Government treated the proceeds of Crown land sales as revenue. It would 'amount to the same thing if a fanner sold part of hiß farm and called the purchase money income. That ia the Wardist idea of sound finance. The Massey Government pays the proceeds of Crown land sales into a oapital fund for the acquisition of additional .settlement land. That' is sound finance. Tho surplus may not look' so large, but you know it is genuine. • _ The Ward Government provided no sinking fund for public'.buildinga, which had been paid for with-borrowed money. It did not insure the buildings, and if they were burnt it- replaced ■ them out of. more borrowed money. The Massoy Covernmont has abollshod tricky financial methods of this description, which had tho effect of inflating the apparent surplus year hy year, and misleading the people as to the real position. BORROWINC RFDUCED AND CHEAPENED. The Massey Government has reduced borrowing. During its first twentyseven months in office it added approximately £1,000,000 less to the Public Debt than did its predecessors in an equal period. During the last two years of the Ward Government the public debt per bead was increased by £5 7s. 4d. per annum. During the first two years of the Reform Administration tho annual increase was £4 9s. per head. i Tho reduction which the present GoveouKAt kaa eiSeoted da tho cost or ral&_.

ins leans ib shown in the following table relating to loans raised in the yeara indicated:— " Ward Government. April, 1916.... & A\ November, 1910 ...,, I 11 5 ■ Mackenzie Government. October, 1911 6 11 Massey Government. February, 1913 4 4 8 October, 1913 (renewal, 1811 „ low) 4 8 6 October, 1813 (renewal, 1911 T loa n) ; 4 3 8 January, 1914 4 18 The Massey Government has brought down the cost of loans from £6 le. Id. per cent, to £4 Ib. Bd. The Government has been accused of framing an extravagant borrowing programme, but the new items need no dofence. They are:— £434,000—First instalment of a loan to improve Btatkms and main lines suffered by the Ward Government to fall into a backward and neglected state. £1,000,000-To be raised and spent over a term of three years in providing roads and bridges In back-blocks where settlers were left by the Ward Government for years to _ suffer terrible hardships owing to the lack of reads. £2,ooo,ooo—War. loan. Can anyone have the slightest objection to these most necessary loans? TAXINQ BIC ESTATES AND INCOMES. The Massey Government haß increased ~ ~

TWO METHODS.

taxation only upon large incomes and lug estateß.' . Additional taxation imposed last year upon big incomes haß produced £50,000. Ninoty per cent; of, the inoreaße comes from incomes of £2400 or more, but 1 bore is a slight increase from £1200 Upwards. The effect of tho inorcascd graduated .'•» nd tax imposed: by the Massey Govtirnmout has been very striking. Although the Ward era was one of rapid aggregation of land, whereas subdivision has been greatly accelerated, by, the present Government, ..the., from the increased'gradiiated land tax show a very largi' increase.for. the latter period. .;:•'■ V-''fc^ ;^ -"'-v-- ■-; The Maßsey Government increased the graduated land tax ini 1912, with the result that in the ensuing year an additional £46,000.was collected from ..this, source. Here is a proof of the sincerity of the Massey Government's-claim that it is the small men's Government. Last year (although- subdivision has

been going on rapidly) there was a further increase of £7000. MEETING JUST DEMANDS. The Government has shouldered many liabilities, inherited from its predecessors, which should have been provided for long before it took office. Notably inoreases in salary to State employees and school teachorß. additional pension benefits to the people, and large annual payments into the State superannuation funds which were left by the Ward and Mackenzie Governments in an unsound condition. The following table gives a list of items of increased expenditure, not one of which has been challenged by the Opposition, though they now seek to denounce the aggregate increase:— Additional each Year. .■■■£.■ Teachers' Superannuation Fund 10,000 I'ublio Service Superannuation Fund 25,000 Railways Superannuation Fund 25,000 Increased pay to Civil Servants v under Public Service Commissioners— 1912-13 49.500 1913-14 51,600 Increases, Post and Telegraph— 1912-13 , 42,500 3913-14 43,000 Increases, Police (this year) .... 18,000 Increases, sohool-toacuers (last year) 29,000 Increases, Railway servants ... 94,564 Increase per Annum. £ Military pensions 44,428 Old-aye pensions to women at Hlstx y&Mfj ..„„„ ) ,„.i W i....u 70,000

Old-age pensions—further liberal amendments ~, 10,000 Widows' pensions ,:.,.,.. 6,000 Concessions under Customs Bfll 80,000 Sinking funds for publio buildings ;..... 10,000 An increased expenditure of £667,000 per year is thus accounted for, but no ontio of the Government will venture to assert that any single item was not justified. ADVANOEB DEPARTMENT RESTORED. One of the greatest achievements of the Massey Government in the domain of finance has been the regeneration of tho State Advances Office, which was orippled for a time by the extravagant plunging of the Ward Government in the election year of 1911. This abuse of a publio institution was the subjeot of a dramatio exposure with which the Hon. Jas. Allen electrified the House of Representatives and the country during the session of 1912. It was shown by the Reform Minister that money had bf.n poured out like water, in the eleotion year, in the,shape or large loans to wealthy local bodies. One borough alone (Timaru) got £116,000, and the Remuera Road Board (in the Parneil electorate) got £87,000. Of this latter amount £87,000 was paid over three days before the eleotion and £42,000 one month before the election. What can tho electors think of this wit of finance? Is that what New Zealand wants at a critical time like, the .present? Where is it likely to i land the country if this Bort of thing should occur during the months to oome when prudent and sound administration must be the motto of the party in office?

But let us look at the result of this election-year plunging. Ouo outcome was that on January 15, 1912, when the elections were over aud within about a month of the Remuera loan, the Ward Government had to reduce tho maximum amount of loans to local bodies to £5000. Could there be, any stronger condemnation of Wardist financial methods than this P':. Phmging during the months leading up to the election and scarcity i and hardship immediately' after. *--\- .; ; --. l^'V

The maximum loan Vto: settlers had boon reduced- by the Ward: Government in-November y-»i911j,.. biit ••jthf-faotr was. not made known to "trie public until after the election, .Anothor-little,-trick-of' 'Wardistv finance;- \Tfie.; unpleasant disclosure' 'of mismanagement hidden up until the elections'were over. - • When. tho : Continuous; • Government left offloe a : maximunv' > ibfc£sooo; iad been imposed on. loans'to local';:bodies, and a maximum of £500' on loans to Bettlera, while > all applications for loans to repay existing mortgages were being

refused. That was what {Bey had brought the finances of the Advances Department to byAreokless administration. Two years later, in June, 19H, the Massey Government .had so thoroughly restored the shattered finances of the Department that'all restrictions on borrowing other than those imposed by Statute were removed. .Was not that a big achievement?