The Southern Cross PUBLISHED WEEKLY. Invercargill, Saturday, Aug, 4. THE BUDGET PROPOSALS.

Southern Cross, Volume 2, Issue 19, 4 August 1894, Page 8

The Southern Cross PUBLISHED WEEKLY. Invercargill, Saturday, Aug, 4. THE BUDGET PROPOSALS.

“ I AH of opinion that the best interests of the colony are being better consulted by our steadfastly adhering to the policy of self-denial, and by maintaining the strong financial position which we now hold, than by further large and heavy reductions in taxation, and in substitution thereof adopting a borrowing policy. The Government believe that borrowing is not necessary, and have decided to conduct the business of the country without having recourse to it.” So spoke the Hon. the Colonial Treasurer when he delivered the Financial Statement on 4th July, 1893, and from time to time since then the Premier and other members of the Ministry have spoken to the same effect. The memorable budget of 1894 has, however, made it clear that circumstances have been too strong for the Government, and that the heroic policy of self-denial has in practice broken down. They have not been able to carry on the business of the country without borrowing, and the Treasurer proposes ,to borrow largely in the immediate future. The need for this is demonstrated by the fact that it has been found necessary to pass an Act providing for the collection of the land and income-tax four or five months in advance of the usual time. The Treasurer’s proposalso practically include the] borrowing of about four millions sterling for certain specific purposes amongst others the allocation of a million and a-half for lending to farmers at a low rate of interest. The Treasurer, in dealing with this part of the subject, stated that advances would be limited to one-half the] values of properties, and he expressed the opinion that land values had now sunk to bed-rock. The correctness ©f this assumption we doubt, because the land legislation proposed to be enacted is all in the direction of sweeping away freeholds and substituting therefor a system of leaseholds directly under the Government. Hone, we think, will deny that advances of] the nature proposed should only be made on freeholds, and there was a great deal of truth in the remark made by Mr Stewart that even on freeholds the one-half advance will be of little benefit to the farmers, many of whom have already borrowed to a greater extent. It has also been pointed outjthat the margin of one and a half per cent between the rate

at which it is intended to borrow at Home as against that which they idtend to lend in the colony is scarcely sufficient to cover all contingencies and risks. There is a good deal of force in this view of the case, for not only have commissions on borrowing,, exchanges, and expenses of management to be taken into consideration, but it will be wonderful indeed if the Government can so conduct its business as to avoid the occasional losses which all lenders of money and companies, however well managed, have experienced in the colony. With regard to the two millions found forthe bank of New Zealand, the opinion seems to be gaining ground that it is but the beginning of the assistance which may require to be given to that institution, and that in the end it will be taken over by the Government, and it is also hinted that possibly one or two other Colonial concerns may be absorbed with it. This of course means that the Government also enter into banking. Then there is the proposal to abolish private savings banks, one effect of which would be to give the Government the command of more money, and to adopt a system of enforced loans against foreign companies doing business in the colony. Taking- the Budget as a whole, it is about the boldest ever submitted to Parliament, containing, as it does, such a large proportion of purely experimental legislation. It is now under review by the House, and we hope to see its various proposals fully, freely, and fearlessly discussed. It may be taken for granted that .during the debate more details will be forthcoming as to the financial operations of the past year —for instance, how much money has been set loose by the conversion of loans, and used by the Government in connection therewith. It may be that some of the Colonial Treasurer’s proposals, if properly safeguarded, would prove beneficial to the colony, but it is to be hoped that no rash or ill-considered steps will be taken. Undesirable under any circumstances, such action would be disastrous at a time when there is admittedly a considerable amount of depression and cause for anxiety.