The Daily News. FRIDAY. NOVEMBER 3. 1911. NEW ZEALAND'S FINANCES.

Taranaki Daily News, Volume LIV, Issue 114, 3 November 1911, Page 4

The Daily News. FRIDAY. NOVEMBER 3. 1911. NEW ZEALAND'S FINANCES.

If. us stated, liy the Mayor of Eltham in introducing the Leader of the Opposition to the electors at Eltham on Monday night, it is diflicult to gather from the columns of a newspaper a fair idea of a man's polities, it is infinitely more diflicult to ascertain the position of the country's finances from the criticisms to which they are continually subjected by Mr. Massey and other leading opponents of the present Administration. It is perhaps but a part of the party game for them to show the national finances in the worst possible light and to lead the people to believe that the country is rapidly "going to the dogs," and that the only way of escape is to put them in charge of the Treasury benches, giving the quietus to the men who are and have been ''ruining" the country. Criticism in public affairs, and especially of the public's finances, serves a very useful and very necessary purpose, and because of this even exaggerations and distortions arc frequently passed over. But the danger is that the public will accept these exaggerations and distortions as facts. At Eltham Mr. Massey condemned the borrowing policy of the Government. yet in the next breath he agreed that some borrowing must be done if we are to have roads, bridges and railways constructed. In other words, he is not against borrowing as a policy, but against borrowing at the rate we have been. ,; Six and a-half millions of fresh indebtedness in a year is too much," he said. If it is too much, why did he and his party not do their best to block it? They had not. of course, the voting power to do 'o effectually, but the point is that only six or seven members of the Opposition thought it, necessary to vote against the loans, and every one of them wa- there with demands for a share of the loans for expenditure in his own district. Where is the consistency Only the other day. when a motion was moved in tin' House to curtail a certain vote nearly all the Opposition followed the Government Party into the lobby to vote against the motion being carried. There i- very lit Mi' in this cry. when it i- inve.limited, -ilioui (1,,. Government outrunning I he cutter by raising six ami a half millions a year. This wasalinorm.il expenditure for abnormal purposes. The inference sought to be drawn is that the Government are borrowing at that, rate every year. The thing. of course, is absurd. This six and a-half millions was required for the payment of the Dreadnought: and the Manawatu railwav and to provide money for the advances to settler; and workers, loans local bodies, ami for the construction of railways. roads and bridge-. The present Ad-miiii-l rat ioii has borrowed twenty millions.and of this eighteen millions is earn-' ingits own interest, and in some eases doing more, whilst practically the whole of

the balance went towards paying fori the Dreadnought, which, viewed in the real light, is a remunerative investment, serving as it does as an insurance cover for our mercantile marine, on which we almost absolutely rely for our subsistence. These the things the Opposition critics say little about. They give the expenditure side and declaim against the extravagance and so forth of the Powers that he, but religiously overlook the credit side. We are told that it is a debt-ridden country, that we have the greatest flebt per head of population of any country in the civilised world, and figures are adduced to bolster up these extravagant statements. But it is not shown that no country in the world borrows so largely for the wants of the people, undertakes so many public services, and can show such satisfactory results. Nor is it mentioned that the debts of nearly every country contrasted with those, of New Zealand are "dead debts," mostly war debts, whilst our debts for the most parts are remunerative. We have a "dead" debt, it is true Mr, Massey puts it at 30 per cent, of the whole—but the Opposition refrain frqpi saying that nearly all of it was incurred by previous Conservative Governments. For instance, one finds that previous to 1891 only 49 per cent, of the public debt was inter-est-bearing, and 51 per cent, non-interest bearing. Since that date, however, only 13 or 14 per cent, has been non-interest bearing and 87 per cent, interest bearing. The non-interest bearing portion of the money went, as was pointed out by the Hon. T. Mackenzie in his reply to Mr. Massey, for services which the Opposition had clamored for as much as the Government supporters, namely, roads and bridges, public buildings, etc. There is another test of the position of the public finances and the adverse criticisms of the Opposition in connection therewith. 'When Mr. Ballance came into power the annual interest on the noninterest bearing portion of the debt amounted to £1 8s per head of population. To-day it stands at 18s 7!/ 2 d. Reasons: Increase of population; decrease in price of money; and also nearly all the money borrowed has been for reproductive purposes. In ISEkI the average rate of interest paid by the country was £4 10s 3d; to-day it is £3 14s fid. These figures give the lie direct to those who say that the country is being ruined by those in charge of its financial operations. Manifestly, if we are to go on developing this rich young country at an appreciable rate we must go on borrowing. The alternative is that we find all the money for development purposes ourselves. We are finding a big share of it already—last year £900,000 was taken from the Consolidated Fund and put into the Public Works Fund —and leaving the rest for our children (who will have all the assets) to find, at the same time attaching to every million we borrow a sinking fund which in course of time will automatically liquidate the liability. It may be that we should bear a little more of the cost of development ourselves and spending less of the borrowed money on works that can wait until the backblocks are properly roaded and railed—this is our view. But the financial position of the country is, it will be clear to the unbiassed citizen, strong and sound, and does not call for the notes of alarm like those struck by Mr. Massey at Eltham on Monday evening.