MR. HOLMAN'S TRIP TO LONDON

Dominion, Volume 10, Issue 3070, 4 May 1917, Page 5

MR. HOLMAN'S TRIP TO LONDON

FINANCIAL POSITION OF NEW SOUTH WALES ... OVERDRAFT, £7,667,812 ' 'A rigid disinclination on the parfi o£ the New South; Wales Premier to inform the general public of the nature of tho necessities which have occasioned, his departure for Great Britain has led to the circulation in Sydney of many rumours (states the Sydney correspondent of the Melbourne "Age"). To repeat them in detail would in all probability be only to cloud tthe real . issue. It is an open secret that the State is financially "hard up," and that : Mr. Holman is on his way to Eondon to plunge into further ■ heavy borrowings to meet the situation. A review of the financial operations of the New South AVales Government) during the expired nine months of the present financial year is in itself eloquent as to the straits into which the administration has landed tho country. Necessarily one must keep in. mind in preparing it the extravagances of former years. At the end of 1916 Mr. Holman took unto himself much credit for ' what was subsequently shown by published figures and comments in the Auditor-General's report; to bo an imaginary surplus of £150,000. As a. matter of fact, at the time he had a very substantial deficit, his newly created suspense accounts Seing so heavily in debit that they """ showed a deficiency of £1,167,620. With .this fact in view it is interesting to trace the State's total monthlydebit balances since. ' They were on :— £ July 31, 1916 .;..... 6,490,626 August 31, 1916 6,765,266 September 30, 1916 .„ 8,136,967, Ootober 31, 1916" "*6,557,131' November 30, 1916 7,013,820 - December 31, 1916 7,200,031' January 31, 1917 ..". ;... 7,532,626 February 28, 1917 7,496,320 March. 31, 1917 8,642,210

*Beductioii due to £2,000,000 additional loan money floated with Messrs. Norton, Griffiths, and Co. An effort has been made-''in the Government statement of accounts to set off this huge total debit balance of £8,642,210 at the end of March by showing oredit items totalling £6,328,224; and thus demonstrating .what is really a misleading result in the shape of a' debit balance of only £2,318,985. But these credit;items represent trust funds, which have been in the bulk misused, and are really'not in! credit at all. Over £5,000,000 oat of-'the £6,323,224 has been , seized and spent, so that the true position is that the State has 'actually overdrawn its finances by something like , £7,667,812, which money, of course, it has to make good quite apart from the demands of future operations. Mr. Holman is therefore going to London to raise fresh loan moneys to help to meet this situation, and at the same time to carry on other large public works in contemplation—a measure of relief and aggravation to be applied concomitantly, ... The trust funds which have been overdrawn by the .Government represent the special deposits accounts—accounts which should never bo touched — and special accounts amounting to £360,523, which money belongs to Supreme Court funds. It is interesting to quote the Auditor-General's criticism regarding this matter in his last annual report. Mr. Coghlan says: —'.'Although not -permitted by the Audit Act, the use by the Treasury of these trust funds is a well-established custom in local finance, it being contended .that while tho credits oi' these various funds, shown to be £5,264,270 on June 30 last, would bo lying comparatively unproductive, the Treasury would be paying interest on some of them, and, it is'claimed, unnecessary interest on loans, which would be imperative if these funds were not used in-anticipation of loans. It is urged that this would not be satisfactory to the taxpayer, and that a moderate use of these funds is justifiable. But it must be remembered that the transactions in this aggregation of accounts have rapidly increased in volume, and that with the huge credit there is danger of excessive use. In ordinary times extensivo use is not without considerable riskj and in -war time the situation may easily become perilous." Mr.C'oghlau's warning has been disregarded. The whole of tho fusds have been used, and the position has indeed become perilous. The real dinger before the State financially is that, as soon as there is any block in borrowing —and everyone is aware that there fans-been a block for some timo past— the using up of .these reserve fundn removes the last lino of defence. The outlook is very black, and Mr. Holman cannot be envied the task he has undertaken in attempting the flotation of fresh loans. .