OUR FINANCIAL POSITION

Dominion, Volume 9, Issue 2669, 15 January 1916, Page 4

OUR FINANCIAL POSITION

The position of the country's finances as set out by the Minister of Finance to-day discloses several very satisfactory_ features. Tho revenue for the nine months of the current financial year shows an increase of over three-quarters of a million. The war taxation is already making its influence felt, but apart from this factor the revenue generally appeare to have been well maintained. It is equally pleasing -perhaps more so—to note that there has been a reduction in Departmental expenditure. The total increase in the ordinary expenditure for the nine months was £109,182, and seeing that the addition to interest and sinking fund charges was £199,950. tho net increase must b<3 regarded as a moderate one, bearing signs of attempts at economy. A gratifying feature of tho position is the fact that it will not be necessary to raise a public works loan during 1916. Our war loans are secured from the Mother Country, the amount'required and arranged for up to the end of December, 1916, being stated at £8,340,000; but for public works purposes we have to raise the money locally. Last year a two million loan was raised, and we arc now told by the Finance Minister that this will serve all requirements until 1917. ' There is very little enthusiasm _ these stern times for local borrowing for public works purposes. A great many people liold tho view—a quite sound view—that public works expenditure should be restricted in every possible way to the barest necessities.. Urgent works necessary for the development of tho country should be undertaken, but nothing else. Complaint is made that too many men have been kept employed on public works, using up money which is likely to be more urgently required after the war, ol even for the purposes of tne war.' The Government seems, to have cut down public works expenditure a little as compared with the previous year,_ but a good deal more pruning might with advantage be done. Tho only other feature of •the Minister's statement that calls for comment at the moment is the proposal to offer the holders of all 4 per cent. Government debentures falling duo up to 1924 the opportunity of converting them into 4iper cent, debentures with a currency extending to twenty-five years, the new debentures to be free of income tax. The object of_ this is stated to be to avoid having to make, provision by locp.l loans for tho repayment pf the debentures falling due,' ancl thus conserve the local market for a future public works loan. This may be reasonable enough and sound policy, but how does Sir Joseph Ward reconcile the raising of the rate _ of _ interest by tho State in the price it is paying for its loans, with his subsequent declaration that "there is no earthly reason why the rate of- interest should go "up in this country," and his warning against any attempt to force up the vi|lue of mpney 1