The Times. Published on Tuesday and Friday Afternoons. FRIDAY, FEBRUARY 4, 1921. THE FINANCIAL POSITION.

Franklin Times, Volume 9, Issue 605, 4 February 1921, Page 4

The Times. Published on Tuesday and Friday Afternoons.

FRIDAY, FEBRUARY 4, 1921. THE FINANCIAL POSITION.

The Prime Minister, Mr. W. F. Massey, touched upon the country's financial position at some lenchb yesterday afternoon when responding to the toast of the Government at the luncheon tendered to him in Pukekohe. He said that a great deal of adverse criticism was being levelled against his administration particularly in regard to the increase in taxation. He wished they would try to recollect one instance since the war ended in which any increased taxation had been collected. The country had borrowed £100,000,000 for war purposes, the greater part of which, fortunately, had been borrowed within New Zealand. The rate of interest was not so low as on loans made before the war, ranging up to five and five and a-half per cent.* subject to income tax. On that £100,000,000 the country had to find interest and sinking fund. On top of this obligation had come demands from the men on railways, members of the Public Service and the officers of the Post and Telegraph Department for increased salaries to meet the increased cost of living. An arrangement had been reached to meet these demands, which would cost the people of this Dominion nearly £2,000,000 per annum. Then there were all sorts of incidentals. Everyone knew of the trouble on account of coal. He was not going to blame, anyone in particular for that, for ho had gone among the miners and had found them very decent fellows. He had to run the railways of this country. At the commencement of the session in 1919, when he took over the management, he instructed the General Managr to keep them going at all costs. The country was actually losing £IOOO a day compared with what would be the case if it could get the coal in New Zealand! as before the war, with a certain proportion from Australia. War pensions cost nearly £2,000,000 a year. Added to this were the subsidies for butter and flour., Nothing weuld please him better than to say that taxaion was to be lowered, but he could not promise it. Some people talked about the loan which was before the country, most of which was in the Treasury—so much so that his anxiety about that loan was at an end. Promises had been made to the men who had gone to the war, and up to the present these promises had been kept. Homes had been provided for 8500 men while by a coincidence 8500 had also been placed on the land. There were still soldiers to provide for, and the Government had asked the people of the country to provide another five or six millions. So far as he could judge they had got it. or would get it. Yet people came along and asked why taxation was not reduced. In regard to the loan, It was a five and a half per cent, for 12 years. The man who was not satisfied with the security offered, was

“We nothing extenuate, nor aught set down in malice.”

hard to satisfy. There was no hardship about it. There was a little compulsion, but that could not be avoided. It was a war loan, and, he was glad to say, was the last of the war loans. More money would be required, hough he did not know when it would be needed. It would be necessary to go on to the open market for it. Money would be needed for roads, bridges, hydro-electric power, education, and numbers of other purposes .* The country Ijad got on very well with the reconstruction problem, and had nothing to complain of at present. Mr. Massey mentioned that one trouble was the* price of wool, but the country was getting more for butter and cheese, and might get a little more for meat. It might be necessary to wait a little longer for the money. When the Imperiel requisition came to an end there had been a sort of interregnum, during which the money was not coming in, It had scarcely begun to come yet,

and it would not come with the same promptitude as under the requisition. In a way he would like to see another requisition if it could come without a war. It was the best thing that had ever happened for New Zealand. He then dealt briefly with the great increase in imports and stated that two years’ Customs duties had been collected in one year, but this could not be maintained and next year they would probably be below the average. A reserve fund was being set aside to balance this. But the inspiring keynote of Mr. Massov’s speech was that ho insisted that the country was absolutely sound. No country could be sounder. Roughly, the war debt and the ordinary debt amounted to £200,000,000. There assets for everything except , aboul £20,000,000. The country therefore

was in a truly sound and satisfactory position. The difficulty was the next 18 months, to get the revenue to meet the accounts. He would like to be able to hope that the subsidy on butter and flour could be done away with, which would be a saving to the taxpayers of £1,000,000. He wished to assure them that so far as the finances of the country were concerned they were never better looked after than at present by the officers of the Treasury. Nothing that could be done was being left undone to meet our liabilities. We consider this is one of the most reassuring pronouncements which the Prime Minister has made for some time and it should do much to stop the pessimistic drivel which already has had too much play.