The Guardian AND EVENING STAR, With which is incorporated “The West Coast Times.” WEDNESDAY, JULY 13th, 1921.

Hokitika Guardian, 13 July 1921, Page 2

The Guardian AND EVENING STAR, With which is incorporated “The West Coast Times.” WEDNESDAY, JULY 13th, 1921.

TILE FINANCIAL OUTLOOK. In tlx 1 course of an interview the Hon A. M. Myers, M.R., discussed at Auck * land the financial outlook, and in doing _ so lie-explained that lie had retrained from making any comment on the iinan- 1 eial situation of the country until such * time as the five million loan had been 1 negotiated in I/nulon. Recent utter- ( anees by the president of the Welling ( ton Chandler of Commerce and other s prominent commercial men, however ' had been some indication that the get:- < end public was now alive to the final'• • eial leeway being made by the State i This regrettable state of affairs was I due partly to the adverse economic con- i ditions prevailing, and partly to th* i general policy of drift indulged in by < the Government. Take the position as : disclosed at the end of the Nationa "** ] Government regime. Whilst that Min J istrv was in office, surpluses amounting i to some 17J millions were accumulated and mostly invested in London at high j rates of interest, .with the object of retaining large credits at the world s , banking centre during the period of de. 1 pression that all students of finance i foresaw to be inevitable as a result of , the war. in this respect New Zealand was particularly fortunate at the time | for no other country had built up re- | serves in London against the reactin' contingent upon the dislocation of tin financial and; lindiiistrial world. The , subsequent withdrawal of our accumulations of capital from London and the. | application, to a great extent, as ready cash for repatriation purposes, thu.- ( causing them to participate in the responsibility for the abnormal land boom ( which was brought about in full view , of the coming slump with its corresponding tightness of money, was. T venture to say, a most serious error of judg moot. Our solders were, and still are entitled to our first consideration. I am inclined to think, however, that we could better have served their interests l:i V spending fewer millions on pir- ' chases of improved land and more upon the building of roads and railway:. ' with the object of opening up untouched Crown and native lands, thus providin' ' employment and increasing the produo tive capacity of the country at one 1 and the same time. “T am not holding 1 up the National Government as an example in respect of economy*,” said ( Mr Myers, “even after making fid: ■ allowance for the heavy burden of war t for which it had to provide and for 1 the big increases in many branches of t expenditure consequent thereon. As e s matter of fact, at the time the Nation ( a) Government came out of office it wa i (jiiite npparetit tl}4 if *»" '9iiv v

during a period of boom prices such ;rs was then in existence that industry and enterprise in the country could e<>n tinue to bear the load of taxation cheerfully acquiesced in during the war. Many industries were already then looking eagerly for reduction in taxation, upon the cessation of the wa. drain, in order that normal growth and expansion might he resumed. The vei> fact that New Zealand had accumulated the large reserves in London for 1 the express object of enabling tlu Governmnt to lighten post-war taxes am! to facilitate an effort to maintain noi mal industrial anel commercial conditions. together with the anticipatin' 1 that the State would immediately put into force a policy of economy and retrenchment, augured well for the finan eial future of the country, even thong 1 ; the full stress of the economic storm had yet to hie Careful study of the Government’s statistic.however, does not disclose any such 1 course having been followed during the past two years. Mi Myers pointed, out that if the present lack of strong linimcial policy for New Zealand wen persisted in the outlook would remain by no means bright. “Certainly our revenue has increased by 20 per coni per annum during the past two years, ’’ he remarked. ;c ßut the fact of the matter is that taxation provided 62 per cent of the total revenue in 1920 and 65 per'cent in 1921; and. again 'of such taxation Customs and Excislinve contributed nearly fourteen mi! lioils in the two years under review This year’s collection of Customs dues has been largely anticipated already Owing to the sudden inrush of import that recently tok place. With the present falling-oil’ in trade and consequent drop in income tax results, together with a return to normal (or even below normal) Customs duties, it is difficult. ■ to see how our revenue is to be ma : : | tained at its present level. The higher ' rates of taxation which came into force ' this year will he payable towards tin 1 end of the present and early next year but other factors that will mo'c than j counteract this further rise in taxation are increasing State exjiCndituce on [every hand, accompanied by proviiimi j to he made for interest and sinking j fund upon any additions to the Xai tional Debt, including over £39.',0C0

' to be sent to London each year in t,uy- ( ment of interest, etc., upon the five

‘ million loan just floated Tint strong ' and unremitting control of our finances * slmuld bo exercised without delay is therefore more than apparent. .