Borrowing Must Stop Gradually

Sun (Auckland), Volume I, Issue 292, 1 March 1928, Page 1

Borrowing Must Stop Gradually

FINANCE MINISTER’S AIM PAYING FOR THE WAR (Special to THE SUN) DUNEDIN, Wednesday. Looking ahead —he does not say how far —the Minister of Finance, the Kon. W. Downie Stewart, sees our war debt so reduced that the repayments will have equalled the new money borrowed by the State for public works within the Dominion. In endeavouring to justify the Government’s policy of borrowing, the Minister readily agreed this evening that the annual borrowing should be reduced, but he claimed this to be the chief aim of the present Government. “No heavy or immediate reduction can be made by a stroke of the pen. he warned his audience, “for to stop any of our half-completed public works would do what no man in private business would do. “What we are aiming at is, first, to borrow each yea?* only the minimum amount necessary to carry on heavy programme of public works have in hand; secondly, to pay off much as possible each year of dead-weight war debt, and ther year by year lessen the annual incre in the public debt. The effect of t policy is shown in the fact that, whe ras in 1925-26 the public debt increa * by £ 11,000.000, in 1926-27 it creased by under £ 7,000,000. 1 1927-28 1 hope to show that it. will o . increase by £6.000,000. Thereafter, if circumstances prove favourable, each year the net increase in borrowing should fall till we ultimately reach the point where the amount of war debt or other debt paid off will equal the new money borrowed for public W< The Minister read figures to show that when reduced to a comparable basis the increase in the annual borrowing for public works, land settlement and other purposes was not in excess of the increase in population. “We are still paying for the war. ’ he said, “and w’e have less margin to cover the cost of capital expenditure that is financially unproductive. In other words, the country is not as well off as it was, and we must exercise greater prudence.”