The Guardian And Evening Star, with which is incorporated the West Coast Times THURSDAY, JULY 30th, 1925. FINANCE THAT FAILS.

Hokitika Guardian, 30 July 1925, Page 2

The Guardian And Evening Star, with which is incorporated the West Coast Times THURSDAY, JULY 30th, 1925. FINANCE THAT FAILS.

Thr Opposition in attacking the Government on iLs fiscal policy is hut doithe obvious. The fiiiiln.ro of the Government in handling the linanee of , the country has been its besetting i fault. Since the period of the National (iovernment vvb.cn Sir .Joseph Ward , was Minister of b'inanee, the present party in power has found it difficult to keep the finances in order. Prior to , the advent of the coalition at the time of the war, the same difficulties were accumulating, hut when the Liberals went to tho assistance of the Reform party out of loyally to the country (for which the 'Liberals never re;eivetl adeipiate credit), it was left to a Liberal Minister of Finance to straighten out matters, and leave a nice little nest egg in London in accrued funds for the Reform party to hank on. Ix>ft to its own devices again, Reform soon parted with the savings Sir Joseph Ward had accumulated .for New Zealand, and the Reform Government has been in a needy position ever since. When matters financial are tight beyond endurance there is resourc to another loan. The result is that the national debt is mounting up, and the consequence is that the burden of taxation is increasing. From time to time Government makes a gesture of taxation reduction, hut subsequent figures disclose the volume of revenue. is kept up. so that if the funds are not drawn from one source, they come from another. While this is so necessarily because of the increase in expenditure, there is not any genuine effort to reduce administrative costs. On the contrary the.se are increased, while the burden of interest payments on borrowed money is mounting up also. The no(onfidonee motion moved by Mr Sidey on Tuesday night on behalf of the Nationalists deals with the question of placing the burden of taxation on a more equitable system so far as individual responsibility is concerned The Ministerial reply by Sir James Parr was not an adequate answer to the charges of misgovernnient as he dealt with the buoyancy of private business in New Zealand and not the public administration. Private prosperity results from the prices of staple products sold overseas, and the Government has no voice in the control of markets, which is a matter purely of demand. Productivity in New Zealand is assured where there is the market, hut the country is prosperous solely because it has a surplus of produce to sell, and can get rid of the over-plus in outside markets. This condition might impose thoughtfulness on the part of the Government to see that while the country owes its prosperity to conditions outside the realm of local control, within the house should be set in order so that there would be no fear of difficulties when export prices fall. Sir James Parr was frank enough to admit “there was a

cloud in the sky,” but his only panacea was that “excessive” borrowing hud to be guarded against. Borrowing is to go on and only “excessive” borrowing is to be checked! It is not clear where the line is to be drawn, where borrowing ends and “excessive” borrowing begins. Bust year New Zealand added to its public debt at the rate of half a million a mouth. This was borrowing. but apparently not “excessive” borrowing in the minds of the Government. But the burden of taxation arising thereunder must be very great and there is no sign of any halt being called. Administrative expenditure is mounting up also, so there is not any sign of a eonstruetjve policy in Reform finance. The procedure is to borrow as often as possible, and as Mr Sidey pointed out. the latent money raised is not being profitably invested, and there is a material drift to leeward. fully £3,000 per month will be lost on the last loan, which the country must make good from revenue, otherwise taxation. Sir James Parr thinks that because the Dominion has sound assets exceeding the public debt there is safety, hut the "drift that is going on is reducing the margin all the time, and no wonder he can see a cloud in the sky. The New Zealand Ship of State officered by Reform is going full steam ahead despite the squalls to Ire met, and when the full force of the storm bursts we need nut wonder why the ship is thrown on her beam ends. Parliament composed for the time being of a Government majority will be responsible, and that Government as other reckless administrations before it will pay the penalty, hut too late for the unfortunate taxpayers.