MORTGAGING REVENUE

Evening Post, Volume CXII, Issue 84, 6 October 1931, Page 6

MORTGAGING REVENUE

In considering how Government expenditure might Be reduced so as to be balanced by a diminishing revenue, Sir Joseph Ward and, afterwards, Mr. Forbes were faced with the great proportion, of expenditure that was fixed and .irreducible—irreducible, that is to say, unless creditdamaging, contract-breaking was lo ,be practised. The existing charges on the taxpayer are (said Sir Joseph Ward) largely of a rigid nature, and the scope for administrative economy is very much smaller than is popularly supposed. . . . The services rendered by the State have been greatly increased over the last decade, and, generally speaking, it would appear that wo have reached a stage ■when it is advisable, as far as possible, to stabilise the position i'or a year or two, to enable the increasing population and wealth of the Dominion to lighten the relative burden on the taxpayer. That was said two years, ago. The passing of two years has not eased the position, or enabled the State to renew expansion of social services. On the contrary, Mr. Forbes has had to submit Sir Joseph Ward's "rigid" charges to further examination, and Mr. Downie Stewart must carry this process further. We face here problems substantially similar to those which confronted the May Committee on National Expenditure in Great Britain. That Committee pointed out that in the heavy obligations incurred in recent years (except with war pensions) there was an accruing liability greater than the current charge. Future revenue was mortgaged for many years to come. Only with an increasing revenue tan we continue- to provide even our existing services, without additional taxation (stated the Committee). The Committee further drew attention lo two disquieting considerations: — First, the charges we have considered are practically all fixed in terms of money. If there is a further decline in the price level they will become a proportionately heavier burden on the national revenue. Secondly, we have to face in the future the probability of a retardation in the increase, and ultimately of a decline, in our population at the working ages. The Government Actuary has estimated that while at present for every 100 persons between the ages of 15 and G5 there arc 23 persons over 65 years of age, in 30 years' time there will probably be 33, and in ■ 50 years' time 38. Thus, the working population of the future, in addition to meeting that part of the liability for which provision has not been made by the present generation, will have to support a much larger proportion of pensioners.

The second consideration does nol apply equally to New Zealand, where there are still possibilities of development to absorb a greater population; but it has a sufficient application to cause us to pause and consider how we are incurring liabilities which will press grievously upon taxpayers of the future. We have pressed forward with too little thought of paying our way. Now we must mark time, and even retrace our

steps a little. If Lhis is not done our future progress will be retarded. This is the position which will confront Parliament to-night when Mr. Slewart submits the Government proposals. Members must consider it seriously, and support the Finance Minister in his endeavour to place the country's finances again on a firm basis. This is necessary not only for the relief of present distress, but to enable llie Dominion again lo establish prosperity. No durable building can rest on a shaky foundation.