NEW ZEALAND FINANCE.

Gisborne Times, Volume XXVI, Issue 2146, 23 March 1908, Page 3

NEW ZEALAND FINANCE.

THE PUBLIC DEBT

(Special to “Times.”) WELLINGTON, March 22

Mr. John Dutlne, a recognised authority on finance, in a letter to the "Dominion,” makes special reference to the public debt, which, he points out by the table of March, 190/, was then shown to be £64,179,940. Of this £47,757,219, usually spoken of as funded, only falls due in 1829, 1944, and 1945 ,and of the balance, if we assume that the amounts maturing m the remainder of 1907 have been renewed, we have a total of £11,369,987 to be paid within the term of the five years 1908-12. Against this there is,no. sinking fund., and so all will have to be renewed. “Surely,” says Air. Duthie, “this' is an undesir•ahle position. During the last ten years we have added £19,215,616 to our public debt, and the present commitments point to an increased future ratio." Tho position really amounts to this: That New Zealand in •future, under the Premier’s system, needs to renew or borrow at least four millions annually. The position is disquieting, since it is possible that the Dominion, with such needs, and in any crisis, could not always borrow so .largely, and under such circumstances wo might have to pay still higher rates of interest. That this is so is borne out by the fact that of the debt shown to be due in 1908-12, .£6,222,815 carries 4 per. cent, or over, and only £4,015,672 is at 34 per cent, or under, and where the lower late is naid it is largely on moneys .borrowed from the Savings Bank, the Government Life Insurance, or Trust •Office. Leaving the debt obligations tor the moment, let me turn to the question of interest, and ask why in view of the market rates ruling for the last fifteen years we are paying on any debt contracted within that term a higher rate than 34 per cent. In 1895, with much elation, the Treasurer started the 3 per cent, series due in 1945, and on this there have •since been at least two issues, but all were issued at an unsatisiactory discount, and cost in tho presence of the market rate of these 3 per cents. The Treasurer has chosen to have resort to this 4 per cent, short debt (with, in some cases, a London option), which, being unquoted, further complicates and prejudices the market, yet all the time money could as now have been got at 34 per cen . and at par. Probably lie will soon have to resort to this rate, and to a fresh fifty years’ issue, and some such step ought to bo speedily taken. This question, owing to the tactics or the Premier and the practical supercession of the Public Accounts Committee, lias been too much lost sight of and the effect is that the. financial administration and tho position developed is becoming intolerable.