Nett Increase Of £78,000,000 In Public Debt

Taranaki Daily News, 4 June 1943, Page 4

Nett Increase Of £78,000,000 In Public Debt

Operations for past financial year Reviewing the public debt operations in the 1942-43 financial year, Mr. Nash in his Budget speech said all State activities were now geared to the prosecution of the war, and borrowings last year were therefore almost entirely for war purposes. A sum of £3,435,000 was raised for national development purposes, mainly for housing and hydro-electric supply, and to cover exchange on remittances to repay portion of the 1939-45 London loan, while the balance of gross borrowings amounting to £80,000,000 were for war purposes. Public debt operations last year resulted in a gross increase in the debt of £83.465,000. which sum was obtained from the following sources: — £ Public loans in New Zealand (including advance subscriptions) 28,901,000 National savings 3,972,000 Voluntary interest-free loans 31,000 Memorandum of Security with U.K. Government • 15,437,000 Departmental issues and Reserve Bank ~ 35,124,000 Total £83,465,000 Against this gross increase must be offset repayments during the year of £5,038.000. The year thus closed with a nett increase of £78,427,000, of which £73,908,000 took place in the Dominion and the balance of £4,519,000 in the United Kingdom. Apart from the memorandum of security agreement, debt domiciled at London was reduced by £2,918,000 during the year. Memorandum of Security. Concerning the memorandum of security agreement, the amount of this debt on March 31, 1942, was £2,818,000, while transactions during 1942-43 were borrowings, £15,437,000, and repayments £8,000,000; leaving the amount outstanding on March 31 last at £10r266,000. •' The repayment of £8,000,000 af London was financed from borrowing in New Zealand,

^VW vmwfiWWTrinnrrwT. - - - " and thus had the effect of transferring the domicile of the debt to New Zealand. Since the close of the financial .year a further sum of £2,255,000 has been repaid, leaving £8,000,000 unpaid for goods supplied under the agreement prior to March 31 last. The foregoihg headings of gross borrowings are largely self-explanatory, with the possible exception of the item "departmental issues and Reserve Bank." Departmental issues cover the surplus funds of the Post Office Savings Bank and other State institutions, and owing to the substantial increase, compared with last year's Budget estimate, of expenditure in New Zealand for both the army and the air force it was necessary to finance the deficit by drawing on the Reserve Bank by means of Treasury bills to the extent of a nett amount of £13,960,000. Since the present Government became responsible for the public finances, apart from war debt, the debt domiciled at London has been reduced, by £10,692,000 and Australian debt by £730.000. Even including the war debt the nett decrease over the period is £1,167,000.