STATE ADVANCES CRITICISED

Hokitika Guardian, 18 September 1929, Page 5

STATE ADVANCES CRITICISED

“BURDEN ON TAXPAYER,” Criticism of the operations of the 'State Advances Department in lending money at cheap rates of interest was expressed by Mr H. T>. Acland at the annual meeting of. the Christchurch Citizens’ Association. “I often wonder,” said Mr Acland. “whether the ordinary, persbnyrealises that our State Advances Department is indirectly a terrible burden upon the taxpayer of the country. I believe there is about £17,000.000 advanced to settlers, .practically all of which is borrowed in London, and is therefore free of all local income tax and death duties. To this extent, the mortgagors of the State Advances Department are a privileged aristocracy, getting cheap money her cause it is free of income tax and death duties. Furthermore, these socalled benefits are immediately capitalised, and it is doubtful" if borrowy ers to-day benefit in the way originally intended. “LARGE LANDOWNERS BENEFITED.”

“The persons who really benefited from cheap' money in New Zealand were the large landowners in both town and country, who are thus enabled to dispose of their properties to a much greater advantage than would otherwise have been the tase. The Government’s cheap money brought down the rati? of interest, and as a direct result greatly increased the price of land purchased by the Government for settlement purposes. “Except in the very early stages of land settlement I doubt if the settlers have reaped any real material benefit. Their interest bill or rent remained much the game as when money was at 10 per cent, but the capital to be paid for land when interest was at 5 per cent would be £l.O per aero instead of £o had the cheaper money not been made available. “THE TAXPAYER DONKEY.”

“The huge sum raised by taxation in New Zealand at the present time so far from being evidence of the success of the State enterprise, are really evidence o? the wondenm economic efficiency of the capitalistic and individualistic system. Ultimate'lv thirt expenditure must cease, as the taxpayer donkey will sooner or later sit down and refuse to proceed further with his load.”