FINANCIAL DEBATE

Hokitika Guardian, 13 August 1927, Page 1

FINANCIAL DEBATE

A FORMER TREASURER, WELLINGTON'. Aug. 10. Sir .Joseph Ward (Invercargill) said he proposed to criticise the Budget, hut he did not propose to reflect in any way upon any member of the Government. He then proceeded to detail the steps which he took while Minister for Einance to set up sinking funds for the elimination of the public debt. and then declared that by his Budget the present .Minister for Einance had swept /.away the whole effect of these precautions. In doing this, it was claimed, we were following the practice now obtaining in Britain. This he challenged, claiming that the State Premiers of Australia had recently resolved that every Australian loan must have a sinking fund, while Mr Winston Churchill in his Budget was making provisions for sinking funds. America had also recently insisted upon a sinking fund being attached to the Australian loan raised last year in that country. Everywhere the system of sinking funds was being adopted. Sooner or later our Government would he compelled to go hack to that system.

He had noticed a reference to a readjustment of income-tax. Some readjustment, might he necessary, but he warned the Minister against going too far, for there were many big companies and hanks, the larger proportion of whose shareholders were “small” people, depending upon dividends for their living. He did not find fault with the Budget, but be could not see bow the Minister could expect to reduce taxation when large sums had to he tound out of the Consolidated Revenue to pay oil' loans. This was making the present generation bear the whole burden of these loans, instead of leaving a portion to posterity, tor whom we were preserving the country. lie did no know who was responsible lor altering tile system of sinking funds. Hon. Mr Noswortliy: I did. Sir Joseph Ward: By the Lord Harry. 1 thought so. Air Noswortliy: We are following the same system as Britain tor the redemption of the public debt. Sir Joseph Ward; ! have read Mr Churchill's statement that he lmd paid sixteen millions into a new sinking fund, and to that system we will have

I i return. THE. RAILWAYS. Continuing. Sir .Joseph Marti said lie did no believe the people of New Zealand would have accepted railway administration by Commissioners rather than by a Railway Board, hut the fact was that they were discussing the tinaiues of the country, and there was not a single member ol the House who had the least idea of what the railway finance was. Ihe Australian railways were under Commissioners, and Australian Parliaments had all the information lie was asking lor, which the House should have.

Referring to war loans, he said that this country hud done as other countries had done—raised portion of its money at Id per cent free of income tax. This was yihe eiieapie.se money every found for war purposes, and yet the Minister was taking credit for having bought back so much of flits cheap money. it was necessary to make this concession to raise the amount necessary, and it could not have been done in any other way. Therefore he saw no reason why the Minister should parade tile fact that he is buying hack the cheapest money ever raised under similar eirciimstan-

Why did tile Budget not tell 7ho House ilit* ellcct of I lie increase in motor-tax Inst year? How much did British motor-ears honelll by the alteration made: 1 That was what they had a rif'lit to laiow. The Hon. Mr Stewart: That information can he given when fho tariff tomes down. Sir Joseph Ward said they could consider the matter then, but they must take a broad view and endeavour so to frame the tariff as to {jive every assistance to British industries. He congratulated the Prime .Minister upon the work lie did at the Imperial Conference. Sir Joseph "Ward criticised the policy of subsidising nun-paying railways. If they did this with one Department, why not with others f II it was right in one case, it must be right in all. Why should the railways he expected to earn a high rate ol interest 'i 'lbis was the most valuable Department in the Dominion for promoting the welfare of the country. Perhaps litty per cent of the farmers were barely paying their way. and what could help them better than cheap transport f The railways should not ho expected to earn more than 31 per cent, and any surplus should he given hack to users in the shape of concessions. He said that financially we were 1J millions worse olr at the end ol this year than we were last year, and this deficiency would probably he made up liy borrowing, or b,V the use ol treasury bills. He did not think we could get on with less money in the aggregate than we had last year.