BALANCING THE BUDGET

Gisborne Herald, Volume LXVI, Issue 20017, 16 August 1939, Page 5

BALANCING THE BUDGET

REASON NOT CLEAR DUNEDIN WEST MEMBER (Parliamnntary Reporter.) WELLINGTON, this day. General laughter from the Opposition' benches greeted the declaration by Dr. D. G. McMillan (Lab., Dunedin West) in the House of Representatives yesterday that the taxation increases in the Budget had not been received with any serious protests in the country. He said he believed that the reason was the public were behind the Government in its legislation and were prepared to pay. It was, he continued, a balanced Budget, whatever that might mean. He had 1 never been able'to understand why it was essential to balance the Budget. “The earth takes 365 days to revolve around the sun,”, continued the speaker, “and that fact seems to make it necessary for us to arrive at some system of computation which balances itself every time the earth goes around the sun. I assume this is linked up with pre-historic times when we used to worship both the stars and the sun.” He considered it was time to abolish the old system established by the Tories which, by a system of book-keeping, misled unwary people into believing that the Budget was always balanced, because borrowed nWiiey was utilised as income, though this was never shown. The moneylenders did not want the people to realise ithat they were being put into pawn. Hence this misleading system. Must End Borrowing "No doubt this community has to stop borrowing from abroad,” added Dr. McMillan. "For that reason I am not at all concerned about the results of iMr. Nash’s negotiations in London. A nation is like an individual. There is only one end to this policy of borrowing abroad. t “It is undeniable that the difficulties which have presented themselves this year are due entirely to the stupid: extravagant policy adopted by ‘.he Tories from 1921 till 1934, when they (borrowed £75,000,000 abroad.” An Opposition member: How much are you borrowing? Dr. McMillan: At the outside £9,000,000 over four years, paying it all 'back over the succeeding four years. Obviously the repayments are going to throw .some strain on the economic position of the country, for we are asked to pay off £17,000,000 and are being loaned £9,000,000. If prices fall it can be done quite easily by taking over the overseas assets, New Zealanders using them to liquidate the debt as Britain did during the war.

The speaker declared his strong opposition ito borrowing for defence, because .succeeding generations would have troubles of their own. The defence expenditure, toe said, should be paid 1 for either from a capital levy or a super tax on high incomes.