The Hokitika Guradian THURSDAY, AUGUST 17, 1922. DOMINION FINANCE.

Hokitika Guardian, 17 August 1922, Page 2

The Hokitika Guradian THURSDAY, AUGUST 17, 1922. DOMINION FINANCE.

Although the lit. Hon. the Minister of Finance closed the financial statement in the House on Tuesday night striking an optimistic note, it is apparent that the Dominion finances are not in that buoyant condition in relation to expenditure that they once were. The aftermath of the war has left its burden, and it is becoming more and more clear that the Government, like most other folk, were far too dilatory in realising their obligations to economise in advance of the inevitable drop which followed the inflation of the war period. Although New Zealand prospered exceedingly by the high prices during war time, it is manifest that the Dominion would have heen much better off bad more normal times prevailed over that period. The flush of trade, the hiigh prices and the general financial buoyancy, destroyed nil thought, of thrift or even regard for economy. Money came easily. prices soared and an air of extravagance prevailed. It was much easier as time is showing to go with tile tide of pros, perity, then to curtail now and trim sails to the adverse winds. The Government more then individuals failed to act promptly in steadying the expenditure. The surplus accumulations from war time taxation were prodigious, and this nest egg was thought to be ample to meet extraordinary demands. nut’ with the general slump, and above all the drop in exports, and the abnormal increase in imports at a time when prices were erratic, threw the balance of trade very adversely to the Dominion, and in a short' time the wave of prosperity had spent itself, and -was retracing itself more rapidly than it had flowed. A very few weeks, days almost, served to remind the unprepared ef the difficult times ah-nd.

The dislocation of trade came suddenly but even then there wn a slowness to realise obligations. Economy and preparedness were l>eing preached on all sides, but few practised what they advised. and least of all the Government. The costly nature of the administration inflated by war conditions was continued and to-day, and for some time to come we shall continue to reap the disadvantage of this want of alert action. * The last financial year produced a deficit. Another deficit is foreshadowed for next year. Revenue is falling and must continue to fall. The high rate of taxation is stifling enterprise in many directions. Departments such as the railways, postal and telegraph, are not paying, but incurring heavy loss. The Government profess to be reducing expenditure, but it is not equal to the falling income, and the result is a more and more difficult time for 'tho Minister of Finance. Mr Massey in his Statement, which is unusually lengthy, makes as good a case as lie can for the Government. Tlio difficulties in regard to the position can he well understood, and the trying time which the Prime Minister is having can be well appreciated. The Statement, however, does not attempt the heroic. Mr Massey juggles with balances in the hope of minimising the deficit, hut there is no ray of hope about, reduced charges or taxation to encourage a more optimistic feeling among those who are the principal contributors to the revenue. The revenue is a falling quantity and notably so in regard to income tax which shows a decline in a direction which must manifest itself in other ways than in the finances of the country. It means reduced enterprise and that suggests tile high way to stagnation.