The Dominion. FRIDAY, MAY 28, 1920. THE NATIONAL FINANCES

Dominion, Volume 13, Issue 208, 28 May 1920, Page 6

The Dominion. FRIDAY, MAY 28, 1920. THE NATIONAL FINANCES

In conjunction with earlier returns, the quarterly statement gazetted last evening supplies particulars of the national finances for the year 1919-20. The revenue surplus for the year is approximately £2,299,000 (as against an estimate, so-called, of £478,108), and this in spite of the fact that expenditure under all heads exceeded the estimate submitted by tho late Minister of Finance in.his Budget last year by no less a sum than £1,340,868, and the expenditure of the previous year by £5,106,326. Since further great additions to expenditure are in immediate prospect, more significance' attaches to tho Increase under this head than to the smaller, though substantial, increase in revenue for the year. The position disclosed sets all possible emphasis upon the .need for national economy of the soundest description. Whilo tho expenditure for the year exceeded 'that of 1918-19 by over five millions, the accompanying gain in revenue was £3,728,968. The principal itonis of increase, with the corresponding increases in the same items in 1918-19, are given below. In each case the increase is upon the returns of the preceding year.

1919-20. 1918-19. £ f. Stamps and Death „ Duties- 1,220,160 232,759 , Customs 999,643 466,373 Hallways 790,570 307,222 Income Tax...... 222.5G7 599,775 Post and Telegraph 131,945 128,555 La ml Tax 45,210 126,985 These items account for all but a small part of the revenue expansion for the past year. It will be nofaced that Stamps and Death Duties and Customs produced the bulk of the additional revenuo obtained last year. Railway, revenue shows a substantial increase, and it will bo fully absorbed during the current year in meeting present and prospective increases of pay within that Department. The figures of increased return from direct taxation are instructive as showing that there are limits to what is to be expected from this source, and these figures, of course, are all the more significant at a time when export trade is threatened by serious difficulties and oversea markets arc weakening. % It is very clear that the Dominion is called upon to husband its financial resources with the utmost care. Taxation is already burdensome, and in some respects definitely impedes the productive enterprise on which future revenue depends, and it is uncertain whether the present level of revenue can be maintained in tho immediate future, let alone exceeded. In these circumstances, the extraordinary growth in expenditure constitutes a problem of the gravest, character. An excellentway of bringirig out the facts is to compare the increased demands made on national revenue during the last five ycars-tho years in which war-burdens have been imposed—with the corresponding increase in such demands during the preceding five years. The following table shows the total national expenditure in tho years indicated and, tho.increase in this expenditure for the five-year periods to March 31, 1915, and to the end of the financial year which has just closed:Annual . Increases, expenditure, five years, £ £ 1910 8,990,922 — ' 19] 5 12,379,803 3,388,881 ,"20 23,781,025 11,402^122) This speaks for itself as showing .how enormously charges on national revenue have mounted up during the last five years. It is still more instructive to apply a similar method of comparison to the annual charge for Permanent Appropriations, in which the chief items are debt charges and the paynnmt of war and other pensions:— Permanent appropriations. £ WO 3,514,409 1915 4,505,177 M-0 - 11,389,461 It will be seen that while charge's under this head increased by less than a million in the five years from 1910 to 1915, they have increased in the last five years by £6,884,284— that is to say by nearly seven times as much. Some additions have still to be made to this item on account of war expenditure, and possibly on account of increased war pension payments. Tho greater part of the increase in permanent appropriations which has developed during the last five years is, of course, a burden pure and simple, and in an entirely different category to the annual charges on borrowed money invested in reproductive works. _ Bearing in mind, also, the uncertain outlook in some departments of the export trade which means so much to the Dominion, and the enormous demands that are being made for expenditure on education,, in giving improved pay and conditions to public servants, and in other directions, it is manifest that prudent economy is imperatively demanded in the management of the national finances.