The Evening Star WEDNESDAY, SEPTEMBER 27, 1939. NEW ZEALAND’S WAR BILL.

Evening Star, Issue 23382, 27 September 1939, Page 8

The Evening Star WEDNESDAY, SEPTEMBER 27, 1939. NEW ZEALAND’S WAR BILL.

It is a pity that the Government’s financial policy has been so lavish. Money expended on unprofitable and unproductive public works might have been saved, and it would have been very welcome in the present crisis. A rainy day has arrived. The full strength of the Reserve Bank, which was intended for use in time of stress, was exploited to such an extent that the directors had to issue a warning that the limit had been reached. While these things are true, there is no use in the present emergency in wasting time over vain regrets or recriminations. The Government is rising _t° Ihe occasion, and this Dominion, with the other outlying posts of the Empire, is rallying to the Motherland to take part in the great struggle for freedom. The war, as we have seen in Britain’s preparations, will be waged at terrific cost, and will impose heavy financial obligations on this and future generations. In the House of Representatives last night the Minister of Finance outlined the'Government’s proposals in order to provide the money for New Zealand’s war effort to March 31 next, which is the end of the financial year. Nervous people were alarmed at the suggestions, supposed to have arrived here from Wellington, of enormous burdens to be put on the people. There was no need for alarm. The taxation proposals have been framed on orthodox lines, and, generally speaking, no serious objection can bo taken to them in l the circumstances.

Naturally, this is only a preliminary arrangement, for the cost of the war will .steeply rise as time goes on. Mr Nash explained that £9,750,000 will be required to finance the war activities of the Dominion for the remainder of the financial year. From then. on. the yearly total may be from £20,000,000 to £30,000,000. As had been expected, income tax will yield the greatest sum under the new schedules, while a substantial amount will accrue eventually from increased death charges. There are additions to the beer, wine, spirits, and tobacco duties. To these no objection can bo taken, for they are small imposts on luxuries at a time when the call must 5© for a Spartan regimen. The estimated returns from the additional taxes for the remainder of this financial year amount to £2,408,000, and, as stated, £9,750,000 is needed. Sums already voted for defence total £3,200,000. This leaves a shortage of £4,142,000. Portion, of this deficiency, the Minister indicated, could ho raised by loan, and where it was necessary “ all the money required for war purposes would be obtained from the Reserve Bank.” This is a point on which there will be some uneasiness, for, should there be a resort to an inflationary process the reaction on the purchasing power of the people will be unfavourable, The Minister announced last night when explaining the main provisions of the War Expenses Bill that money borrowed from tho Reserve Bank would be treated as a loan obligation. ■ Making reference to suggestions by Opposition members that economies ought to.be made in the sums voted for public works, the Finance Minister adopted a weak attitude. Mr Nash invited members to advise the Minister of Public Works what works in their own electorate should not be proceeded with. Surely this is the Government’s responsibility, and it is unfair to put the onus on private members. Many of the schemes that are now in hand can be dropped in the meantime,, and the money saved diverted to war purposes. Mr Nash himself says that the major objective is the prosecution of the war. Supplementary and complementary to that it is essential to get tho most possible from the Dominion’s primary and secondary industries. The whole community is called to loyal cooperation. In the increased taxes little is added to the costs of the workers. They can make up their contribution by individual effort in the industries in which they are engaged.