The Dominion. THURSDAY, JUNE 10, 1943. COST OF STABILIZATION

Dominion, Volume 36, Issue 218, 10 June 1943, Page 4

The Dominion. THURSDAY, JUNE 10, 1943. COST OF STABILIZATION

In the Budget the Minister of Finance rightly stressed the importance of stabilization, and said that the value of it should be understood by all the people.’ No exception could be' taken to his summary of the basic cause of inflation, and it is agreed that any course that will bring about the transfer of surplus purchasing power from the individual to the State offers the most effective method of ensuring price stability But the Government’s stabilization policy goes further than ' this It provides for price stabilization in part, by means of State subsidies which are to be charged against the War Expenses Account. Ihe information supplied under various headings in this account is fuller this year than has been previously provided, but it still .leaves a good deal to be desired. There appears to be no good reason why full details should not be given regarding expenditure by way of subsidies. In Great Britain the information apparently is available, tor a leading financial journal, in its analysis of last year’s Budget was able to state: “Subsidies cost the Exchequer £125 millions in 1941. And it is highly desirable that the people of New Zealand, who provide the money, should know exactly what the cost of their stabilization plan in this respect has been. It will cover a big range of expenditure Only last month, for instance, it was stated that a Government subsidy would meet the extra cost incurred by payment of overtime to miners in the Grey district-and presumably on other fie Ms-who work on “back” Saturdays during the winter months. It should also be made clear exactly what constitute the “subsidies to primary producers.” Last year—though for what reason it is difficult to see three items formerly included in the Department of Agriculture s esti-. mates manufacture of butter-boxes, raw materials for the manufactur of superphosphates and for the purchase of sodium chlorate, were transferred and made charges against the War Expenses Account, thus helping to create the impression that civil expenditure had been reduced. The cost of these items, and of others that may have been transferred or added, should certainly be made available, for this expenditure could be of no possible interest or value to an enemy, but is of direct importance to the people of New Zealand. In his Budget Minister gave a complete table of what he described as risks being taken by the State to protect the pastoral industries from the majoi economic shocks arising from the war,’ including the: figi mg noxious weeds, the maintenance of the New Zealand School of Agri culture herd-testing, rabbit destruction and other items.. If that could be done regarding one group of subsidies, then there is no. apparent reason wh/it should not be done respecting all that constitute a charge under the stabilization plan. , An important aspect of stabilization finance was touched on by the Leader of the Opposition during the debate in Parliament on Tue.day evening. The subsidies, involved in the Government policy in this respect are, as stated, a charge against the War Expenses Accoun and the funds are in part—and no small part—provided by loans. That means that, to the extent that borrowed money is used., a share of the cost will ultimately fall on the men who are now serving overseas, whereas it should be met entirely out of current revenues; pr<ovided by those who remain on the home front and who are. e g the benefits. The whole cost should be borne by the community now, for some of the subsidies, as already mentioned, are purely sectiona in thek application, and there is not the shadow of a reason why they should be added to the burdens of the future by being met out of loan money to the extent of a single shilling. If there must be subsidies—and that course has been taken simply because it is easiest way to deal with a position that had been allowed to get quit out of hand-then the money required should be provider f ° of taxation. To push any part of that burden on to the shoulders of those who are now serving abroad by using loan money, that wfll become a charge on the future, could not possibly be defencle 1, and it is significant to note that the Prime Minister when he replie to Mr. Holland, evaded dealing with this aspect of the mattei.