FINANCIAL STATEMENT.

Hauraki Plains Gazette, Volume XXXVI, Issue 4858, 27 July 1925, Page 3

FINANCIAL STATEMENT.

SATISFACTORY POSITION. . RESTRICTION ON BORROWING. The following remarks arc contained in the annual financial statement, which was presented to Parliament during the week-end by Mr J., A. Young, M.P. for Hamilton, on behalf of the Hon. W. Nosworthy, Minister for Finance: — “The statement I have made presents to honourable members the satisfactory state of our finances, and particularly so will this be realised when compared with other countries economically affe ted by the post-war upheaval. It is true that we, in common with the rest of the world, are not back to a pre-war basis either in values or expediture, but since 1920 the country has made a remarkable recovery in banking and trade, and it -is reasonable to claim for the Government some share in assisting to bring this about by adherence to economy in administration whim meeting requirements for the further development of our resources so as to increase output, improve markets, and thus stabilise the trade balance. “Our exports have increased; but so have imports, and for last year the margin is less than for the two. previous years. 1 trust this margin will not further diminish, .as the evils of over-importing have been abundantly experienced with unpleasant results in recent years. I do not want to see our trade balance drift back to the adverse conditions obtaining four years ago, when my predecessor had the difficult task of restoring a sound state of affairs. “Since assuming this portfolio I have had before me heavy demands for increased expenditure, but I propose to adhere to the policy of the late Minister for Finance in checking any tendency to overburden our ■ resources,' and I will continue to encourage the closest economy and scrutinise carefully all applications for expediture that do not, in my opinion, come within the Government's necessary requirements for the efficient performance of its services. Borrowed money adds to our charges, and this is apt to be overlooked in the requests for increased expenditure. The immediate results of capital expenditure are apparent in the development and improvements . effected, but a spending-power 4 is created that tends to engender public and private extravagance. We must not ignore the fact that the contingent liability placed on the Consolidated Fund may have to be carried at times when our resources are affected by adverse conditions. “Just one other matter should be mentioned—that of our future requirements for capital expenditure. The prospects of borrowing in London on easy terms in the near future are not good, and-it is advisable to look carefully ahead to ensure that the purposes for which w’e borrow mopey are directly interest-earning. The present conditions may be„ temporary, but the indications cannot be disregarded, and I wish to emphasise again the danger of outside borrowing on a large scale while there are signs that the excess of exports over imports is not sufficient to cover bur charges for interest payable overseas. “The Government’s programme tor the further development of our. resources, extending and improving communications and facilitating bur trade generally, now involves heavy commitments, but with the application of energy and industry by all classes of the community, we should, with our productive soil and favoured climate, be able to justify our efforts to progress on sound lines that will make for the betterment of the people and 'the maintenance of the high credit of this Dominion.” .