GROWING DEBT

Rotorua Morning Post, Issue 3, 26 August 1931, Page 4

GROWING DEBT

POST-WAR EXPEMDITURE. GOVERNMENT DEFENDSD. The assertion that the economic disabilities under which the country is suifering have not been entirely imposed from without was made by Mr. C. H. Clinkard (United — Rotorua) during his speech on the Financial Debate in the House of Representatives. He said that three years ago he had made a statement to the effeci that the Dominion was literally in a morass, and hat as soon as high prices could no longer be obtained for our oroducts the bubble would burst and the country would be faced with a depression. Unfortunately, that depress'ion had come sooner than he had anticipated.

During a period of prosperity, Mr. Cbnkard continued, the whole country, in fact the whole world, had deve,loped habits of exfravagant excpenditure, both national and individual, and had set a pace that was quite impossible to maintain. Between 1920 and 1929 the national indebtedness had increased by £62,000,QrP, which was jjreatcv than the total debt incurred in the 51 years preceding 1907. Much of the money borrowed had been spent on unecomic undertakings, such as the Auck'and railway works, and . the State bad launched on reckless undertakings on inaccurate -estimates. The Mangahao hydro-electric works "had been estimated to cost £438,000, but they had finally cost £2,022,000. If

any local body had made such errors, it would have been taken to task by the ratepayers. The Arapuni scheme had been estimated to cost £1,075,000, but according to the latest Year Book it had cost £3,830,000 so far and heaven alone knew what it would cost before it was finalised. It had been suggested that the Government had raided the reserves, but in 1920 there were accumulatd surpluses amounting to about £16.000,000, and between 1920 and 1928 there was additional surplus revenue totalling £12,485,000, making the total expenditure £28,265,000. It was no wonder that the State, during that period was earrying full sail, and the local bodies had not been much better. In spite of the Ifigh prices, New Zealand bought £60,000,000 worth more than she sold during the same period and that was the position the country was in when the United Government took nfficp. Tn 1920 tlip

total mortgages of the Dominion were £171,000,000, and in 1929 they had increased to £344,000,000., In*1920 the number of petitions ,in bankruptcy was 144, but in 1929 the number had grown to 687. This was the legacy the United Party had to take over when it came into office, and it had no alternative but to economise. It had been said that the Government should have avoided some of the increased indebtedness it had incurred since it came into office, but a number of the large undertakings were under way, and it was impossible to terminate that expenditure. It was perhaps unfortunate that when some of the railway undertakings were stopped others had not been stopped also. The only ones that he thought should be earried 'on were the South Island main trunloand pro- | bably the Gisborne line. ' He had ' said for many years that the only ; lines which would pay were the main ] trunk lines. Mr. R. Semple (Labour — Wellington East) : "Wljat about the RotoruaTauno Railway?"

Mr. Clinkard: "I told the people long ago that it ought to he stopped." In spite of the criticisms of the primage duty, the customs revenue budgetecj for would be over £2,000,000 less than in 1928 and over £1,000,000 less than in 1929, and he reminded Reform critics of the new duty that their Government had allowed tlie primage duty to remain on the Statute Book from 1916 until it went out of office. No matter from what source one drew money for taxation purposes, there would always be protests, and the Government had to balance its accoun|;s. The only way to reduee taxation was to reduce expenditure, and the Government had , done a, tremendous amount in this 1 direction.