LABOUR & DEBT

Wairarapa Times-Age, 25 August 1939, Page 7

LABOUR & DEBT

OPPOSITION LEADER’S CHARGE CRISIS DESIRED BY SOME MEMBERS. PAST ADMINISTRATION DEFENDED. (By Telegraph-Press Association.) WELLINGTON. This Day. ■Tt is clear that a large section of Labour members look forward to a debt crisis that will give them the con-, ditions and opportunities they age looking for,” said the Leader of the Opposition. Mr Hamilton, in opening discussion on the Finance Bill in the House of Representatives yesterday. “They want to bring about a collapse of the interest-paying system; at least that is the conclusion we are entitled to draw from their statements. I cannot state too emphatically that a wrong view of the debt question might shake the whole foundation of the Dominion's economy, and cause untold suffering. Our obligations are just obligations, and it is fair that we should talk of them as such. If not, we are not entitled to ask for more as we have recently done.” It was more than ever essential today that those in authority should show steadiness and solidity to inspire the confidence of the people, said Mr Hamilton. Nothing was so certain to shake the confidence and the morale of the people than irresponsible and baseless attacks on the system of finance on which the Dominion was so successfully established. The man and woman in the street should not be misled by cunning and ill-founded attacks on what the attackers called the debt system. OBLIGATIONS TO BRITAIN. If there had been no financial assistance from England for major development. said Mr Hamilton, New Zealand could' not now enjoy the comforts and efficiency of modern life. The burden of debt for development was taken on gladly by the men and women who built New Zealand and there should be nothing but thanks for the thrifty people in the Motherland who made it possible for New Zealand to borrow the money and have a coat far in advance of the cloth then available. What could be more reasonable than that we were able to borrow the money on the understanding that we could pay it back, or at least pay the rent of it? Provision was made by previous Administrations through sinking funds for the wiping off of debt in 60 years, said Mr Hamilton, and each loan since 1925 had to carry a 60 years’ sinking fund provision, and to 1939 nearly £50,000,000 of the national debt had been so redeemed. That amount was the equivalent of New Zealand’s total borrowings up to about 1900, and what was the use, therefore, of talking about not having paid for such items as the Maori wars. “For' the country to enjoy, all the amenities that our borrowing from the Motherland has made possible and now allow an agitation to be started against the debt obligation, is, to put it mildly, unconscionable,” Mr Hamilton said. STATE OF LONDON FUNDS. The present Government has so reversed the state of London funds that its position was even more embarrassing than it claimed the position of the last Government was, he said. It was absurd to say that previous Governments had balanced their Budgets out of borrowed money. “It is said that the previous Government stored up London funds to the extent of about £40,000,000 instead of using it to help the distress in New Zealand,” said Mr Hamilton. “Those did not belong to the Government but to the exporters or the banks, who had paid out here to the exporters. Further, there was the thought that the exchange was artificially high, with a possibility of an early drop. This Government—by its expansion of purchasing power in New Zealand —has so reversed the position as to create the, present chaotic and even more embarassing position. lam sure the Government now realises the value of having a substantial amount of money available in London. The accusation that previous Governments had borrowed to balance their budgets was absurd, said Mr Hamilton. No Government could use loan capital for ordinary expenditure, as the Auditor-General would have tagged any balance-sheet that did. It might as well as said that if a business man borrowed £lOOO to put up a building. he had balanced his budget with borrowed money.