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Hokitika Guardian, 17 September 1926, Page 2

From a statement laid before Parliament last week showing the allocation of tile Public Debt, it appears that £63,302.990 has lieen spent on productive works; £26,814,690 on land settlement and forests; £33,616,654 has been utilised in connection with the investment departments; £20.634,346 has boon applied to indirect productive purposes; and £95,486,998 to what is termed financially unproductive purposes. The total public debt outstanding at March 31st., 1926, is set down at £238,85-5,478. The statement points out that the practice of instituting a sinking fund in connection with each loan issued was abandoned in IS7O. and no provision was made for the ultimate redemption of the loans floated after that year. The Budget of 1884 contained an extensive review of the position of the sinking funds belonging to the loans issued prior to 1870. Therein sinking funds were described as “exploded fallacies,” and the Colonial

Treasurer stated, inter alia, that “there is no reason why the colonists, who are exerting themselves to lay broad and deep the foundations of great public works, which will be a splendid and magnificent heritage to those who come after them, should attempt to pay off piece-meal portions of the public debt whilst they are borrowing more. Twenty-five years hence compared with the value of these "orks. the public debt will he ft bagatelle. 1 propose we should not be idiotic enough to tax the people to pay oil a little fragment of our debt: no other colony does it.” In 1908 there remained hut £212,(502 of the old sinking funds accumulated prior to 1881. In 1909 the policy was again reconsidered, and a special sinking fund for the repayment of old war and defence loans was instituted. This was followed in 1910 by tlm Public Debt Extinction Act. which made provision for the ultimate redemption of the. whole public debt. nnd marked the complete reversal ol the policy, which had boon followed since 1870.