THE PUBLIC DEBT

Gisborne Times, Volume LXI, Issue 9850, 31 October 1924, Page 2

THE PUBLIC DEBT

NEW REPAYMENT PROPOSALS

£172,000,000 AFFECTED

WELLINGTON, Oct. 29. A Bill entitled the- Repayment of . Public Debt Bill, was introduced in the House to-night. The debt amounts to £221,610,361, of which about £17,000,000 is for State advances and £5,700,000 for electric power, State coal, Westport i harbor board, Nauru and Ocean Islands, etc., which accounts have a special sinking fund provisions. In addition, £27.000,000 of debt due to the British Government lias been funded, leaving the net present debt af- I footed by the Bill approximately I £172,000,000. Of the funding opera- ! tions concluded with the British Go- | vernment £26,000,000 dealt with the war debt, a portion of the amount borrowed under the Naval Defence Act 1909, amounting to £900,000, and . other advances amounting to £230,- : 000. Those sums are repayable by i half-yearl y instalments and are now separated from the N.Z. sinking funds , ar.d will not bo affected by the Bill, j There are other sinking funds, e.g.. : local bodies loans and old war and defence loans, which had. accumulated with the Public Trustee up to 1910. Since tiic Public Debt Extinction Act was passed, no further contributions to these sinking funds have been made arul the interest on them has since been paid, to the Consolidated Fund by the Public Trustee. The Bill proposes to 'substitute for the long term sinking fund system a method whereby the Dominion debt reduction resources may be available to purchase and cancel Government securities as the market price is advantageous, or pay them off at maturity and so ensure an actual reduction in the public debt annually. For this purpose there will he issued annually out of the Consolidated Fund, a sum equal to J per cent of the debt af- : footed by this Bill. To this will be added a sum equal to interest at 32 per cent per annum on the debt paid off. Under this scheme, by tins means, a portion of the savings in interest on debt paid off will lie applied to further repayments of debt and the present debt will be liquidator! in about sixty years, while all future loans will be liquidated within a similar period from the date ot their inception. A capital fluid, termed :i Thc Public Debt Redemption Fund,” will be created consisting of—(1) the present accumulation of sinking funds amounting to about £10.560,000, leaving aside the State Advances. Westport Harbor Board and State coal mines funds; (2) the amount advanced for Discharged Soldiers’ Sott’ement £135. 000.000. The capital of this fund, will be held intact. The earnings tliertIrt in will he credited to the Consohuated Fund and apoHed towards meeting the annual charge against the Consolidated Fund created bv this 801.

The Bill provides for an annua! reduction in the amount of the public debt, the amount of reduction increasing from year to year. There will he nil annual saving to the Consolidated Fund on the amount of debt redeemed consisting of that portion of the interest and sinking fund in exetss of 4 per cent, which would have been payable had the loans not been redeemed under the provisions of the Bill.—Special.