OVERSEAS BORROWING

Hokitika Guardian, 17 November 1931, Page 8

OVERSEAS BORROWING

CURTAILMENT SUGGESTED. The suggestion that the borrowing policy, which, lia© already been curtailed this year to the extent of 50 per cent., should be progressively reduced and overseas borrowing cease was made by the Hon. Downie Skewart, Minister of Finance, “in moving the second reading of the ' Appropriation Bill in the House of Representatives. . Nearly half the expenditure of the Consolidated Fund consisted of debt charges, he said, and any further loan expenditure was & direct factor ip the budgetary position'. Debt charges were fixed in terms of money, and as the result of the fall in prices the relative burden of existing charges had been considerably increased, a greater proportion of the national income. being now required to meet debt charges. This being so, it was all the more imperative that great carei should be exercised in- incurring fresh loan liabilities.

“At the same time,” said the Minister, “it is recognised ‘that the sudden cessation of borrowing would not only entail further waste in leaving works uncompleted, but would greatly increase our economic difficulties. 1 think the soundest policy is fairly rapid reduction fn capital expenditure out ojf boa-rowed moneys. A 50 per cent, curtailment has been made in raising fresh capital during this financial year, and I consider further progressive reductions, should be made in succeeding years. In particular, we should aim to cease borrowing abroad as soon as possible. The' cutting down of expenditure on public works means reducing the number of men employed by that Department, but if it is done gradually as works are completed and ns economic conditions improve, it should be possible to do it without imposing hardship by increasing unemployment difficulties. In any ca.se, it must be recognised that we cannot no on borrowing money, adding to the burdens on the taxpayers merely to provide sufficient work to keep the whole of the present staff permanently employed. That way .lies disaster.”