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Hokitika Guardian, 17 August 1922, Page 2

Thu financial outlook of tho country is governed-by two main factors, the reasonableness of its taxation, and tho price ol its primary products. It is iiom the latter where the wealth of tlie lountry comes, and if the Dominion is to pursue Inc even tenor of its way i* finance, tlie rate of taxation has got to lie governed by the price of tho products in the world’s markets. With products at the present prices it is manifest that there will be a stringency in regard to the flow of money into the country. The' meat market is glutted and while wool is recovering, dairy products are uncertain. Under those three heads the financial fortunes of New Zealand are grouped. It is well to bear this fact in mind when surveying the prosjß'cts for national prosperity. Mr .Massey realises that a return to prosperous tunes cannot bo immediate—and this for the reason that our primary products—on which our prosperity is mainly based—are not meeting with either a ready or a lucrative market. .Money is needed to tide over the time, and it would appear that the Minister proposes to borrow further, thus adding to the annual liability-. Another serious difficulty of the times is tlie heavy repayment- due year by year on war loans. At the time the money was raised at short dates it was provided readily and prolific-ally, but its repayment falls due at n. period when the country Ims not the amount readily at call. Yet in its time that money added to the lavish prosperity generally felt and produced a false financial state. Now tlu> reaction is being felt and tne stringency is being experienced. Finance is the essence of success, and for that all important reason its control cannot lie too carefully managed.

Tire Financial Statement should help all to realise that there must he a general remodelling in the rate of expenditure. There are still many outward signs of the prosperous period. The cost of living still stands high, and there is a general inflation still of prices in all directions. The peope continue to take their pleasures gladly, and there is no sign of any surfeit. The reaction it would appear is more national than individual, but this sir only because the balance sheet of the nation calls nttion to the conditions. The people as a whole must he feeling the pinch, and none more so than the primary producers. Their loss of income is steadily reflecting itself in all walks of life. So far as the nation is concerned the Government will be expected to keep the credit of the country good by so directing the finances that income shall not he unduly exceeded by expenses. In other words, the administration will require to be remodelled till the country is living within its means. The Government has boon told by the Taxation Commission that the limit of taxation must be reduced. The falling receipts indicate how personal incomes are dropping, and the fall is to continue according to Mr Massey’s estimates. The time is at hand for heroic action on the part of the Minister of Finance in reducing taxation both generally and specifically, and in closely investigating administrative costs to see where further savings can he made. It Is apparent that this task must he performed sooner or later, and the sooner the better if real relief is to he given to the stringent state of affairs at present which overshadows so seriously the future of the Dominion.