DEBT BURDEN

Rotorua Morning Post, Volume 1, Issue 69, 12 November 1931, Page 5

DEBT BURDEN

(Press Assn.-

LES3 UQBHQWmG . FINANCE MINISTER OUTL1NES GRADUAL ADJUSTMENT TO ,, MEET POSITION AYOIDANCE OF HARDSHIP

-By. Telegraph— Copyright).

WELLINGTON, Wednesday. The importance of using care against piling up further national borrowing liabilities was stressed by the Minister of Finance, the Hon. W. Downie 'Stewart," i'n moving the second reading of the Appropr'ation Bill in .the House of Representatives this morning. "As I pointed out in the Supplementary Budget," said the Minister, "nearly half the expenditure of the Consolidated Fund consists of deht charges and any further loan expendi- • ture is a direct f actor in the budgetary positidn., Deht charges are fixed in terms of money and' as a result of the fall in prices the relative hufden of the existing • charges has been considerably increased.- That ,is to say, a greater proportion of the national incomes is now required to meet debt charges, so it is all the more imperative that great care must be exereised in incurring fresh loan liabilities. "At the same time," Mr. Stewart contmued, "it" is recognised that a sudden cessati'on of borrowing would not only entail further waste in leaving works uncompleted, but would also greatly increase our economic difficulty. 1 think that * the soundest policy is a fairly rap'd reduction in capital expenditure and of borrowed money. A five per cent curtailment has been made in the raising of fresh capital for this financial year and I consider that further progressive reductions should be made in succeeding years., In particular, we should aim to cease borrowing abroad as soon as possible. "Cutting down expenditure on public works means reducing the number of men employed by that Department, hut if it is done gradually, as works are completed and as economic conditions improve, it should be possible to do it without imposing hardship or increasing the unemployment difficulties. In any case, it must he recognised that we cannot go on borrowing money and, adding to the burdens on the taxpayers nferely to provide suffieient work to keep the whole of the present staff permanently employed.. That way lies disaster."