PARLIAMENT AND THE FINANCIAL POSITION

Dominion, Volume 11, Issue 12, 9 October 1917, Page 4

PARLIAMENT AND THE FINANCIAL POSITION

There is a good deal of unrest in political circles <rt tho present time arising partly out.of the attitude of the Government respecting the pensions and allowances of members of t(ie; Second Division. Members ba.ving'i tasted.the sweets of victory OVer the early closing of hotels, when the Government's proposals were defeated, are snowing signs of unwillingness to yield to Ministers that trlistfuL support which in tho past has assisted so largely to smooth the way for the financial and other policy proposals of tho National Cabinet. / Last week tho Government had a narrow escape from defeat on< the question of the .amount of tho allowances which might be granted in special cases as supplementary to the military pension. Tho amount as fixed in the Bill provides for a maximum supplementary grant of £l a, week, and it -was only by 33 votes to 30 that the Government defeated a proposal conveying the intimation that the maximum should be £2. The schedules of tho Bill fixing tho scale of pensions have yet to be dealt with and tho regulations setting out'the scale of allowances have still to come before the House for consideration, and all-tho signs point to an emphatic conflict of opinion botween Cabinet and a, large body of members as to tho financial obligations under these heads which the country can in justice and with safety be called on to carry. Ministers show increasing concern' at the manner in which war costs continue to mount up, and tho disquieting • fact' was disclosed' yesterday that the estimated expenditure for,the year on war expenses account had been understated by something like four millions.' The authority which the Finance Minister was givcu earlier in tho session- to borrow twenty-four millions will in consequonco be insufficient, and it is stated that power ,to raise an additional four millions will be ,requu'- . cd.' It is also stated that owing to tho decreases in Customs and railways revenue and the prospective loss of revenue owing to the early closing of hotels'it will be necessary this session to add •further taxation to the heavy imposts already decided on. The financial situation as depicted by Ministers is on© which calls for examination and possibly for a readjustment of ideas. The difficulty which confronts members and the public is that they, have very little on which to base-an opinion, and.what littlo information is available does not bear out the somewhat depressing view which.! appears to be taken by the Government. When wo-are told that the estimated war.expenditure out ot loan money has been found to be four millions understated we have to accept the statement because there is nothing to test it by. But wp can ask who was responsible tor this serious miscalculation, and now it occurred. Naturally, too. uneasiness must be. felt as to whether those who could err to the extent 01 four millions in an estimate of this nature aro any more careful in the actual expenditure of the huge sums of money devoted to war expenses. While a matter of this nature, cannot be tested by members for lack of information, there is some evidence on which to challenge Ministerial opinion respecting the necessity for further taxation this session._ Ihe statement that tho falling oft in. the Customs and railways rcvonue will necessitate increased taxation this year will not bear analysis. In his Budget brought down on August 1. the Finance Minister in outlining his financial proposals': for the current financial year, made allowance for a substantial falling off of revenue front both Customs and railways. His estimates of tho year's requirements were based on an anticipated decrease in Customs revenue of £919,675, as compared with the receipts for tho previous year, and a decrease of £636,275 from working railways. The information sinco available goes to show that it is not likely that tho reductions anticipated will be exceeded, even if they aro reached. For instance, the lossof Customs revenue for the first quarter of the current year, according to the official figures in the Government Gazette, was £163,878, and on'this basis the total loss for the year would be a little over £650,000, or considerably less than the sum of £919,675 which Sir Joseph Ward has already allowed for in making his financial arrangements for the year. So also with the railways. For tho period from April 1 to August 18—nearly fi&e months of_ the current financial year—the railway rcvenuo has decreased by £178,519, while tho expenditure has decreased by £40,911,4eaviiig a net loss of revenue of £137,608. Taking this as a basis,- and with nearly five months of tho year's working to guide us, the loss of revenue for the year should be about £350,000, as against the £636,000 which Sib Joseph Ward has already allowed for in his Budgot Estimates. These figures are chiefly of interest as going to show that the falling off in railways and Customs revenue is not an unexpected happening giving occasion for alarm, but that on tho contrary they aro reassuring as indicating that up to the present the railing- uff has been less than was anticipated and provided for in tho Budget, As to tho

beer duty, the total revenue expected from this source was £22b,00q, and up to December next there is not likely to be any falling off in this direction, while for the remaining four months of the financial year tho loss will be comparatively a small matter. When, therefore, it is suggested that the falling off in railways and Customs revenue and beer duty will necessitate addod taxation this year, it is obvious that this contention is not warranted.

Tho Government, wo believe, is making a mistake in its handling of this matter of tho pensions and allowances of the Second Division. It.is very properly looking ahead, and it has grown alarmed at the prospect of maintaining a high scale of ponsions and allowances for an indefinite period. It is no doubt influenced too by the knowledge that in the event of failure to dispose of our produco owing to a prolonged shipping shortage the prosperity which has enabled us to finance our war obligations with comparative ease would be quickly shattered, and we should bo forced to fall back on whatever reserves we. may have - accumulated. But while suet risks cannot be ignored, and while it is necessary for the Government to exercise a proper caution, it has yet to be shown that'the cost involved in adding a few shillings a week extra to the allowances of dependants'of men' on active service will make the drain on our finances anticipated. No attempt has yet been ni'adb by tho Minister of Defence or the-Min-ister of Finance to show in detail how the estimated cost of the proposed scalo of. pensions and allowances is made up. It is tho right of Parliament and the country to know how the Government arrives at its estimate of the cost of the pensions and allowances; how the hugo totals which are quoted by Ministers are arrived at. Ministers must have the detailed information, otherwise they could not arrive at the totals. Probably if this information were given to members and made publio Ministers themselves _ might obtain enlightenment, and discover that they had exaggerated the probable cost. It is their failure to prove their case by publishing the details that has given force to the very widely held belief that their estimates of the cost are exaggerated and unreliable. The small group of malcontents '' in Parliament who < would like to see the Government defeated in the hope of profiting oi.it of the political scramble which might be expected to follow' would find themselves in lonoly isolation if Ministers wore to adopt a policy of taking the House more. fully into their confidence on financial questions and on matters of detail relating to. war expenses. The great bulk of the members are well enough aware that there; is no satisfactory alternative to the present Coalition. Government, that whatever shortcomings or individual weaknesses may be found in its ranks it \s as a Ministry the strongest and ablest that could be produced from th\ present Parliament, and that if it went to ,the country to-morrow it would come back to office.