“AN EMPTY CUPBOARD”

Sun (Auckland), Volume IV, Issue 1039, 1 August 1930, Page 11

“AN EMPTY CUPBOARD”

FORMER REFORM MINISTER DENIES CHARGE £3,000,000 LEFT IN FUNDS THIS SUN'S Parliamentary Reporter PARLIAMENT BLDGS., Thurs. The suggestion in a Government newspaper that part of tho Government’s difficulty at present was due to the fact that he had left an empty cupboard when he went out of office was strongly refuted by the Hon. W. Downie Stewart (Reform—Dunedin West) during his Budget debate speech in the House this evening. He said the statement was so absurd that it hardly required 'fen answer. In the Consolidated Fund there were accumulated surpluses of more than £3,000,000 at the beginning of his last year of office and even now, after deducting the deficit and other items charged against it, the balance was still more than £2,000,000. Mr. Stewart said, regarding loan funds, that for the remaining four months of the year when he went out of office there was an aggregate of £5,32G,453 left. The charge of leaving an empty cupboard was without foundation, as was the suggestion by the Minister of Lands, the Hon. E. A. Ransom, that the Government was not going to follow a policy of drift in public finance. If Reform had drifted, why did its control of public finances meet with the highest praise from competent financial critics in England, Australia and elsewhere, and why did Australia point out repeatedly New Zealand’s ability to borrow at practically 1 per cent, better than itself? Mr. Stewart claimed, despite the Budget statement that the Government had not been responsible for raising the rate of interest, that it was well known that when the Government decided to offer ob per cent, for money local bodies protested that they were getting money freely at 5i per cent. The Minister of Finance, the Hon. G. W. Forbes: The rate was raised in Australia. Mr. Stewart said that if it was done to prevent the outflow of money to Australia, how could that result be achieved when more than 5J per cent, could easily be obtained in Australia? The immediate effect of the Government’s action was that deposits were freely withdrawn from the banks and next tho hanks had to put up the overdraft rate to pay for the increased deposit rates, with the result that the whole community suffered through the Government raising the rate to get the money it required.