FINANCE BILL

Evening Post, Volume CXII, Issue 53, 31 August 1926, Page 9

FINANCE BILL

PROSPECTUS STATEMENTS

QUESTION OF BORROWING

The Finance Bill came up for second reading in the House of Representatives last night.

The Hon. W. Downio Stewart (Minister of Finance) said that additional clauses were- still coming in, therefore the Bill would not bo committed that night. The usual loan authorities for Public Works were being taken; and other clauses provided for the borrowing of further moneys for certain capital purposes, such as electrification of the Lyttelto* tunnel and the deterioration of lands.

The Leader of the Opposition (Mr. H. E. Holland) said that although a policy could perhaps bo made out for financial solfrrelianeo inside New Zealand, ho urged that the works covered by the loans mentioned in the Bill •hould be pushed on. The Government had been sadly lacking in certain roading and railway works, bu> ho would deal with the matter further in the Supplementary Estimates. Mr. T. K. Sidey (Dunedin South) considered that more adequate information should bo given in the prospectuses of New Zealand loans. The amount of the Public Debt held in the Dominion at March, 1925, was 45.67 per cent., and 54.36 was held elsewhere. This, said the prospectus, indicated the Dominion's increasing ability to finance its own requirements. But, said Mr. Sidey, although he would not challenge the correctness o£ these figures, they gave an altogether exaggerated view of the increase in local financing. The period of comparison included wartime, when prices were high and capital could not be invested in industrial securities, and the Govornmenh actually introduced compulsory war loans. Since 1920, when these abnormal conditions ceased, the reverse movement was seen in local support for loans, the proportion having steadily diminished. Up till 1920 there were large accumulations in the Post Offlco Savings Bank, but since then, except in one year, the withdrawals had exceeded deposits, the only increase being due to accumulation of' interest. Mr. D. Gf. Sullivan (Avon) suggested that the Minister should say when it was proposed to introduce the "go slow" policy in regard to borrowing, about which so much had been heard.

Mr. W. D. Lysnar (Giaborne) questioned the advisability of electrifyin w the Lyttelton tunnel in view of the experiments being made with electrically drawn vehicles in that locality, and also in view of the need of railway development in other parts of the Dominion.

Beplylng to the discussion, the Minister said he was not concerned with the policy of the Government on the electrification of the Lyttelton tunnel.

Mr. J. M'Combs (Lyttelton): "Canterbury wants no make-shift policy." The Minister said he did not think there would be anything make-shift about the Government's policy. In regard to tho question of borrowing, he pointed out that it would be highly uneconomical to suddenly curtail expenditure upon public works, hydroelectrical schemes, and other development works which should be hastened forward to their completion. The quicker they could bo finished the better. Ho had been looking into the question of curtailing expenditure this year. He had been trying to make a substantial reduction, but he found he had to watch things at every turn, in order, to guard against contracting expenditure to such an extent that it resulted in hundreds of men being put off departmental schemes, and then having to be taken on again as unemployed. The problem was a very difficult one indeed, and the utmost effort had to be made •to calculate exactly where curtailments could be effected without undue disbandment of employees. He pointed out that a large percentage of the £11,000,000 increase in the Public Debt was money paid out by the State Advances Office. He hoped members would emphasise that point, because it was so easy to make adverse comment on tho growth of the Debt. Consistently with the completion of the large undertakings he had referred to, the Government was trying to see that thore was no increase in borrowing, and that as opportunity offered and works' were completed a steady contraction of work took place. The Minister said he could assure Mr. Sidey that nostatement In the last loan prospectus was there which was not based on fact. The London financiers knew the exact position of the loans n'ust as much as any member in the House.

The Bill was read a second time.