THAT SINKING FUND

Sun (Auckland), Volume I, Issue 120, 11 August 1927, Page 13

THAT SINKING FUND

SIR JOSEPH WARD LAMENTS LOST SYSTEM REFORM’S FINANCE POLICY fTBS SUN'S Parliamentary Reporter.) WELLINGTON, Wednesday. The abandonment by the Government of the sinking fund system of public-debt repayment was the subject of complaint—not the first from the same source from Sir Joseph Ward, member for Invercargill, in the course of his speech on the financial statement to-day. Sir Joseph found no fault generally with the financial statement, but strongly decried the drawing upon the Consolidated Fund for huge sums for the repayment of the Dominion’s public debt instead of utilising the system which had been introduced by himself in the political long ago. Posterity should pay some of this, he said. The country was not getting one in interest from the huge sums that were being taken from the consolidated revenue for repayment of the loan. On the other hand, the Government had made the express provision that all local bodies must provide sinking funds for loans, while the Treasurer of the Commonwealth, as well as the Chancellor of the British Exchequer, Mr. Winston Churchill, had also declared themselves on the subject. Two millions had been paid out of consolidated revenue in this country last year. The Minister of Finance, the Hon. W. Downie Stewart: Where did you cet that I raised 11 millions last year. Sir Joseph: It is in the Budget. The Minister: The net amount was just under seven millions. Sir Joseph: lam sorry. The 11 millions was the year before. Mr. H. T. Armstrong: That is 18 millions in two years. Sir Joseph asked where this sort of thing was going to lead the country to. The Hon. W. Nosworthy: We have the same system of debt repayment as Great Britain. Sir Joseph: Mr. Churchill says he paid £65,000,000 in sinking fund. I must accept that. It was because they were in arrears. Mr. Noswcyrthy: That might be so, but they act on the same principle as we do.

Sir Joseph complained about the funding of the £27,000,000 to the British Government, and said that lie had never been able to discover what prompted the New Zealand Government to take the action it had taken. He also complained that the House was not given an opportunity of knowing what the working of the Railway Department revealed, and contended that an intelligent survey of the country’s finances could not be made unless the Railway Statement were brought down in conjunction with or close to the Budget. The Hon. O. J. Hawken, Minister of Agriculture, replied and said that the sinking fund system here was the same as in Australia, and was copied from the system adopted in Great Britain. As a matter of fact it was considered by the Government that the system now operating was more efficacious than the one which Sir Joseph Ward had instituted in 1911. It was mostly a matter of book-keep-ing. Certainly the accumulations of sinking lunds, which were available when tne present Government ma.de the change, were & great help. The difference was that the Government was enabled to buy its debts. It could buy any securities which it owed at any suitable time, and pay off the debt in this way. Sir Joseph Ward had said that the payments were too heavy and that-the war debt was being paid off at too great a rate. Mr. Hawken considered, however, that in a young and prosperous country like this the people should pay off their debt in a reasonable time.