The Press MONDAY, JUNE 17, 1946. National Accounts

Press, Volume LXXXII, Issue 24903, 17 June 1946, Page 4

The Press MONDAY, JUNE 17, 1946. National Accounts

The Hon. D. G. Sullivan, actingMinister of Finance, has one good answer to the criticisms levelled by the Leader of the Opposition, Mr S. G. Holland, against the recent summary of the. national accounts: that they follow established practice in form. It is an answer, however, in which Mr Holland himself showed that he did not need to be instructed, and it does not acknowledge two facts. It was the present Government that introduced the new and unnecessary complication of the separate Social Security Account, to which attention has been called here more than once before; and it was the present Government that decided to establish the War Expenses Account, which has served much more to obscure the facts of war finance than to elucidate them. If it is necessary, then, to agree with Mr Sullivan that the accounts of the Social Security Fund show, as the act requires, how much social security costs and where the money comes from, the agreement merely marks the point of departure. Mr Sullivan believes, or affects to believe, that he has disposed of Mr Holland. The facts remain :*t hat the Social Security Fund depends heavily and increasingly on the direct and indirect tax revenues of the Consolidated Fund; that there is no reason to regard the specific tax revenues of the Social Security Fund as different in kind or in principle—as the Rt. Hon. W. Nash has acknowledged; and that the collecting of taxes to finance social security, the system of accounting, and the picture of social security finance would all be simplified if social security, like all other social services, were operated through the Consolidated Fund. Nothing would be lost in this simplification, the gain would be more than mechanical and formal, and Mr Holland was wholly right in arguing for it. He was right again, in pointing to the figures presented in the War Expenses Account as prima facie evidence that Mr Nash could have given some tax relief last year. He insisted, after reconsidering, his estimates, that they left him no room, since some war charges would rise rather than fall with the end of the war; and he very nearly left the impression that taxpayers were lucky not to be ushered into the peace with a heavier burden on their backs. He said nothing about loan repayment. Yet it is, in fact, loan repayment that has cancelled the great surplus in the account. This is not to say that repayment was unwise: far from it. Mr Sullivan’s retort to Mr Holland, that he “ appears to hold the view that war “debts are best left unpaid”, is a nasty piece of cleverness. The point is that Mr Nash estimated the situation one way, and justified his stiff attitude accordingly, while the situation has developed in a very different way. He may or may not have adapted his policy to it prudently; but his defence of his first decision is swept away.