ECONOMY FIRST

Dominion, Volume 14, Issue 234, 28 June 1921, Page 6

ECONOMY FIRST

AN EXPENSIVE PUBLIC SERVICE SIR FRANCIS BELL’S REMARKS COMMENTED ON BY CHAMBER OF COMMERCE PRESIDENT "It is my duty, as president of the Chamber of Commerce” (said Mr. M. A. Carr, at yesterday’s meeting of the council of the chamber) "to refer to the Hjicech made by the Acting-Prime Minister,' Sir Francis Bell, at the opening of tho annual conference of the, executive council of the Public Service Association last week. I quote the following statements from a newspaper report of the speech:— ‘Now I tell you, gentleman,’ said Sir Francis Bell, 'that the Government and, I think, the public, are becoming alarmed at tho tremendous increase in the charges of administration. Let mo pause for a moment to say that this tremendous increase is largely in labour and not in the special work which your executive represents, . . . New Zealand has now got to make a pause. We have been necessarily since 191-1 almost disregardful of economy. I mean of tho relation between taxation and the public charge. And we, on tho part of tho Government, ask for. and, I believe, will have the assistance of the Public Service in the curtailing of that charge.' "The conference, however, concerned itself rather with proposals for increasing the public expenditure than with decreasing it. Tms Dominion remarked that: 'Of forty resolutions passed on June 21 by tho executive council of the Public. Service Association, at least twenty-four involved an increased expenditure of public money.”' "Anybody who gives any intelligent attention to this matter must know that a large reduction of departmental expenditure must be effected to save this country from grievous trouble. The total expenditure for tho year ended March 31 last was £28,068,000, which shows an increase of £16.2-13,000 on the 1911 of £11,825,000. After due allowance is made for the charges against the war debt and pensions, the increase is on such a largo scale that it calls for close investigation.

"To meet that stupendous expenditure the taxation has become a. crushing burden. For the year ended March 31 last tho direct taxation amounted to £13.683,824, and the indirect taxation to £8,769,25ff a total of £22,453,074, equivalent to £l9 9s. Id. per head of population, compared with £5 10s. in 191-1—- an increase of nearly £l4 per head. "When the values of the whole of the Dominion’s products were' comparatively high, and the country as a whole, was remarkably prosperous, there was no great outcry against the heavy increase of taxation, though the burden was beginning to cause grave anxiety to farsighted business men. Everybody knows now that the, times have changed with the fall in wool, "meat, and some other important products, and with this change the Government must necessarily adjust its expenditure and its taxation toll to meet the new position. By a. failure to take this common-sense course tho Government would court disaster “The takes its toll of taxation in terms of money, but there must be production of goods before money can be available in the form of taxation. ‘Production, more produotion, and still more production’ is rightly a slogan of the Government, but production cannot be encouraged by taxa, tion, more taxation, and still more taxation. Oppressive taxation checks enterprise, hinders development of resources and discourages thrift. Intolerably heavy taxation defeats the very purpose for which it is levied. The aim is an increase of revenue, but by cramping and blocking the means of production the scheme must foil itself ultimately' after it has wrought immeasurable mischief. N.Z. Taxation Highest in the World. "New Zealand’s company taxation is stated to, be the highest in the world. The rate amounts to Bs. 9d. in tho pound on a taxable sum o-f £lO,OOO. As a big company which shows a profit of £lO,OOO may include a large number of comparatively small shareholders, the imposition of a tax of Bs. 9d. in the pound can bo extremely unfair. "Ways and means must be found to reduce the huge spending of to-day. One can understand readily the Government’s difficulty, for it is subjected to all manner of pressure by man£ people, in all parts of the Dominion, to increase the expenditure. More and more one sees the tendency to lean on the Government as a kind of foster-parent ever ready with a big bowl and a big spoon to feed up any number of Oliver Twists asking for more. Many organisations and many conferences have called upon tho Government to play the part of benevolent paternalism. Almost any day one. can see in a newsnaper the advocacy of schemes to increase the waste of public money. "The day has come for a strong stand against waste. If waste is to spoil the peace, the war will have been won in vain. ~ew Zealand needs to-day such an economy campaign as the one which has obliged tho Imperial Government to look well into its expenditure. A month ago the following message from London was published here: — The Government has ordered a reduction in expenditure on simply services for the next financial year from £603,000.000 to £490,000,000 (a decrease of £113,000,000). AU Departments have been instructed to make a searching examination of expenditure. The only alternatives to the of expenditure are fresh borrowing or increased taxation, which would seriously hamper the recovery of industry and commerce, and is strongly opposed by the House of Commons > and the country. A reduction of tax-ntion and indebtedness as rapidly as possible is required to maintain and stimulate industry and commerce, and to sesuro full and regular employment. Economy Confounded. "According the cabled reports, ‘economy candidates’ beat tho Government nominees in two recent by-elections in Great Britain. It is to be regretted tho New Zealand Government have not followed the example of tho Imperial Government in endeavouring to effect a saving in expenditure. Instead of thia, the ActingPrime Minister is reported to have said: The Government had found it necessary, after grave consideration, to sot an example by retaining, during tho present winter at all events, ’ even superfluous officers of the Public Service, a thing they had no power to do except by request to tho Public Service Commissioner. Tho Public Service Commissioner had appreciated the difficulty, and had agreed, as far as it. was possible, to meet the wishes of tho Government.' That had brought the Government into conflict with =ome of tho heads of Departments, who desired, in their loyalty, io begin the process of economisiwg by carrying out a retrenchment which was obviously essential. He was confining himself, in these remarks, it must be understood, to the services which were redundant in ordinary times. The heads of Departments hud agreed to fall into line, with tho result that the Government had been giving a lead in this particular instance to what, in ordinary times, would be called extravagance. While the Government recognises reduction in the expenditure is necessary.

any retrenchment is postponed, and too lead give,! is not that required by the country. The pruning knife should be applied in all Government Departments, and economy should start at the top, not from tho -bottom. r ‘Now is the time for -business men throughout the .Dominion to give their best thought to ways and means by which the immense expenditure of public money can be reduced, to ensure an easing of the ruinous burden of taxation which menaces New- Zealand s welfare. "The old easy-going toleration of waste of public money has to cease. Business men havo to' recognise to-day that if thov do not stop the waste the waste will stop them. Tlie instinct of self-preserva-tion should rouse them to action; and such action, making for a wise economy in Government expenditure, must lie necessarily beneficial io the general public for the public inevitably suffers eventually for the waste into which it presses a Government.