NEW ZEALAND'S PUBLIC DEBT

Taranaki Daily News, Volume LIII, Issue 113, 20 August 1910, Page 5

NEW ZEALAND'S PUBLIC DEBT

THE SINKING FUND PROPOSALS. INTRODUCED BY THE PREMIER. By Telegraph.—Press Association. Wellington, Last Night. In the House of Representatives this evening, in moving the second reading of the Public Debt Extinction Bil>, Sir Joseph Ward made a statement dealing with public boa-rowing. He said there must be a limit to monies borrowed. In some cases borrowed money was bein<* used over and over again. In i.ne de° partment alone this was done to vhe tune of several thousand pounds. No one could give an estimate of the tota'l amount required to be borrowed for the probable expenditure on puolic works. After careful consideration he! estimated it at under 20 millions, tx-1 tending over 15 years. If the railways authorised for construction were finished l at once the cost would be £2,345.000.1 Railways not vet authorised amounted' to £13,197,000 in the North Island, and £8,887,225' in the South Island, less two millions to represent the duplication of lines. The amount on roads would be £2,750,000. Telephones and 'telegraphs for the next five years would absorb £744,000, at the rate of £150,000 a year. After next year the country would not 'have to provide * vore than £IOO,OOO for public buildings.! Roads would require an expenditure of £.550,000 on an average yearly for five years. Borrowing on account of ra.il-1 ways, roads and bridges would amount) to one and half millions yearly. At the' expiration of that period the amount ! should be reduced to a million a year. I Half a million would come from ordinary revenue, making one and a half millions for the remaining ten years. Borrowing could not be stopped while railways, roads and other public works were required, but he could look forward to the time when the ne;;««>tv for borrowing would cease. A pa/iod of 75 years was a fair time' to fix for the extinction of the public debt. The weakness of the sinking fund system | hitherto had been a lack of continuity or system. (The ibill provided for a uni-, form system. The accumulations now I in the hands of the Public Trustee, would remain with him, and the interest would be paid into the Consolidated Fund, and new contributions paid to him. The amount to be paid into the new sinking fund would not be fixed per centage of each loan, but a sum to be actuarially calculated to the extent of the whole public debt in a given Mme., If the debt ever reached 100 millions tliej amount required to be paid annually ] was £223,060. The amount of loan, funds would be invested in loans to people in lands for settlement, which [ were not convertible securities so farj as the Government was concerned. In | twenty years the country would have i no need to borrow. The argument was | put forward that because the amounts] were transferred to the Public Works, Fund from the Consolidated Fund tliat | this was indirect borrowing. This was childish, when it was known throughout the world what the Dominion was doing, as the Dominion stood in a more solid 'position than ever. Summing up 'the points in favour of the bill, he saw he submitted it with confidence to the House, and suggested it should pass for the following reasons: The debt must be paid some time; no fresh taxation was imposed; the extra amount to be found was under £12,000 yearly; administration was economical, costing hardly anything; the funds were lent out to their own people; it would assist the introduction of a. consolidated measure whereby any short-dated loans can be converted on terms favourable I to the Dominion; it was intended to put on a'solid basis 75 millions of money, of; which 12 millions were already provided! for by sinking funds. He defied any accountant, however expert, to challenge him upon any points submitted to the House. He concluded by saying that the laugh from the Opposition side wis not' the way to treat a proposal calculated to do an immense amount of gooa to the people of the country. j Mr, Massey said it was impossible for him or any member of the House to follow the' string of figures given by the Premier, and suggested that the debate should be held over till the speech was printed, and members had studied it. He would inform Sir Joseph Ward that he and his party had no intention t of indulging in personal criticism. >._ tie' speech was a cross between a and public works statement. He objected to money received for the sale of Crown lands being placed to the public ' revenue. It ought to be employed to ' purchase further estates. There ought I to be a depreciation fund in connection with public buildings. The history of ] sinking funds m the past was not such as to command confidence. The only way to inspire confidence was to use j the funds in paying off debentures on due dates. The object of the Premier ; was really to find money for Mate ( Guaranteed Advances. A financial critic, whom he (Mr. Massey) had interrogated described the sinking fund proposals as ( "financial thimblerigging." A scheme ( such as this oor'rl not last 75 years. without breaks. He meant that on the. pxpiry of loans to settlers or public bodies there would he difficulty experienced in finding fresh investment for the funds. Mr Taylor supported the Bill, ana hoped the Premier's optimism was well founded. He considered sinking ought not to be borne out of wages, but should have been provided by taxes oh unearned increment on land. After some further discussion, the debate was adjourned and the House rose I at 10.25.