The Evening Star MONDAY, FEBRUARY 6, 1928. CURB ON BORROWING.

Evening Star, Issue 19783, 6 February 1928, Page 6

The Evening Star MONDAY, FEBRUARY 6, 1928. CURB ON BORROWING.

It really appears as though taxpayers in Australia and New Zealand were becoming alert in their own interests. .What is oven more to the point, it looks as though they had at length impressed on their parliamentary representatives the urgent need to lessen the shameful waste attached to the cost of selfgovernment. In Australia retrenchment is the order of tho day, and those in office who seek to carry on in the bad old style of mortgaging the future in order to perpetuate the profligacy of the past are finding that they will no longer be tolerated in office by an aroused electorate. The first notable evidence of an awakened conscience was the expulsion of the Lang Government in New South Wales, promptly followed by tho elimination of the Sydney City Council and its replacement by the commissioner form of control. This was soon followed by the announcement and approval of a drastic retrenchment policy at the meeting of the Australian Loan Council at Canberra in December. The Federal Treasurer said that the Commonwealth expenditure was being reduced by several million pounds during tho current year; and the representatives of the individual States (among whom New South Wales appeared for tho first time at the Council) followed this lead by agreeing to heavy cuts in their programmes of construction out of loan money, so that the borrowing habit, which lias got such a grip of Australia, may be broken off—not all at once, perhaps, but as soon as possible without great financial and industrial disturbance.

The reasons for past heavy borrowing are many, but chief among them has been the intrusion ol Government into business on almost any pretext. It lias not as a general rule been .successful from the financial point of view. As the chairman of the Melbourne Stock Exchange said in his annual address early in the New Year, there seems to bo a tendency lor Governments to get everything under control except borrowing and the cost ol production. Having come to a decision to curtail borrowing, some of the State Premiers arc deciding their attention to the excessive cost of services which the State provides. A few weeks ago Mr Hogan decided to appoint a Royal Commission to try and stop the serious drift in the Victorian railway finances. He announced during the last week-end that, what between the railways and the losses over closer settlement, the Treasury was losing a million a year. Apparently retrenchment in the railways has already begun, lor the Melbourne Trades Hall Council is seeking to foment stop-work meetings of railwaymen to insist on the reinstatement of dismissed comrades. Victorian trade unionists generally are said to be strongly opposed to retrenchment proposals. Thus wo liaVc the somewhat unusual spectacle of the Labor movement at odds with tiic Government which it has fought for years to place in office, in this affair common sense and adherence to plain duty are altogether on the side of the Government It appears as though the Labor Government of Victoria is tar more courageous than the present Government of New Zealand. According to the ‘Economic Record,’ the outstanding feature of recent business conditions in Victoria is the financial stringency which set in during the second quarter of 1927, “Victoria, in common with other parts of Australia, is passing through a period of difficulty serious in itself, but brought on by special temporary causes, and not in any way indicative of a fundamental weakness in the business structure,” is how the position is summarised by the undoubted authority just mentioned. Very much the same thing may be said of conditions in New Zealand, but our politicians seem to be so obsessed by the slightly superior credit which New Zealand enjoys on the London money market that they hesitate to risk prejudicing it by admissions that retrenchment is necessary. If they would only realise it, this country’s credit ought to become better still if its rulers were to overhaul expenditure with a view to getting better value and making taxation easier; because the present scale and incidence of taxation undoubtedly exert an unfavorable influence on business conditions. It is not only general taxation which is oppressive, but local taxation—municipal rates, for example. Though the amount payable in the pound may show no pronounced climb, valuations do— a nd that amounts to the same thing in essence. More obtrusively than any form of taxation do the Hospital Board levies increase. The latest attempt by the hospital boards to make ends meet is the proposal to stiffen up considerably the fees for treatment charged to patients who are members of friendly societies. We have at present no particular comment to pass on this attempt to augment the revenue. Wo shall content ourselves by suggesting that a better plan would be to reduce the expenditure. Hospital board finance committees and secretaries will ask in what direction reductions can be made. Ff the local board cares to take notice we shall mention one instance into which inquiry might be made, and it may possibly serve as a starting point for inquiries in many and various directions. At the board’s Wakari sanatorium at Halfway Bush vegetables are grown. Two permanent gardeners are employed, and at “ busy ” limes, when the seasons dictate something more than the ordinary routine, the pay list is increased to seven by the employment of casual labor. One of the inmates is a farmer, and after a close analysis of the system his conclusion is that £6OO a year is spent on producing £4O worth of vegetables. We hope, for the sake of the democratic system of self-government, that this is not typical of what takes place ia local and general administration; but we have observed enough of the jesntts pf btovision for the

unemployed under municipal and Public Works Department auspices to feel assured that the waste is on a scale comparable with the deplorable case quoted against the Otago Hospital Board.