The Dominion. MONDAY, MAY 15, 1944. THE CONTROL OF EXPENDITURE

Dominion, Volume 37, Issue 194, 15 May 1944, Page 4

The Dominion. MONDAY, MAY 15, 1944. THE CONTROL OF EXPENDITURE

From time to time Ministers seek to justify measures, or actions, by stating that they are in line with decisions made by the British Parliament, or Government. But there is at least one ver* important respect in which the Dominion authorities have made no attempt to follow the lead given by the Mother Country, and that is in the provision of special safeguards to check or stop wasteful expenditure in wartime. When war broke out the British Government, following the precedent established in 1914-18, promptly appointed a Select Committee on National Expenditure to deal with all expenditure connected with the war, whether civil or military. This course, it was generally recognized, would add materially to the country’s economic and industrial strength. A bulletin just issued by the Canterbury Chamber of Commerce dealing with the control of public expenditure in this Dominion stresses the need for “a really comprehensive and thoroughly competent investigation” with one end only in view—economy in the collection and spending of public money as a means of furthering the welfare of the people and the country. It is an axiom of national finance that “large savings are only possible where there is large expenditure,” and the national expenditure of the Dominion has reached record high levels. Despite that fact there has been no systematic effort to provide that additional measure of control without which it must be impossible for any Government to ascertain with certainty whether the country is getting full value for the whole of its lavish expenditure or whether much of the expenditure is justified at all. The people of the Doininion have noted that in some of the other Dominions war appropriations have been substantially reduced, not because of any slackening of effort but because the .heavy additional cost of providing for their own territorial defence has passed its peak. It was announced last February that the Canadian war appropriation for the current year would be reduced by 240,000,000 dollars, and a few weeks later a cable message from Canberra recorded the fact that Treasury statements had revealed “a steady fall in Australia’s recent war expenditure.” And the test of comparison will certainly be applied when the next Budget is presented here. One obvious and inexcusable weakness throughout the whole of the war period has been the maintenance of our civil expenditure at such a high level. From time to time it has been pointed out in these columns that the Government was attempting to super-impose a war budget on an already heavily expanded civil one. It is extremely doubtful, when such things as the transfer of certain subsidies to become charges against the War Expenses- Account are taken into consideration, whether the non-military expenditure has been reduced at all. The urgent necessity for rigid economy in expenditure lies in the fact that the Governme’nt has relied to such a large extent on the creation of credit. The bulletin referred to sums up the position in these words: “A large part of the difficulties at present affecting the country are directly traceable to the excess of money created to meet Government expenditure in excess of what can be. financed from taxation and genuine loans from the people.” That it contends and it will be* generally admitted—must create conditions that will inevitably undermine and defeat its stabilization policy sooner or latei. There are many aspects of public finance that call for expert examination. In past years, under previous Governments, when the occasion arose, investigations were made which served a valuable purpose, and as national expenditure has never been as high as it is now the scope for inquiry is thereby made'wider and the necessity greater.