The Guardian And Evening Star, with which is in corporated the West Coast Times. MONDAY, JULY 12, 1926.

Hokitika Guardian, 12 July 1926, Page 2

The Guardian And Evening Star, with which is in corporated the West Coast Times. MONDAY, JULY 12, 1926.

THE BUDGET. The Financial Statement this year contains no surprises except in relation to> the growing public debt, which is advancing littcraTly by leaps and bounds. It was the custom in the days when the Liberals had charge of the public finance to accuse the. Government- of the day of all sorts of excesses in the handling of the public funds. The Liberals were charged with galloping to a deficit,” or with increasing the public debt by leaps and bounds. A reference to the record of those days shows that nothing so dire happened. The Liberals saved the country from financial disaster, both in regard to the national credit, and the institutional credit, and by a strict adherence to self-reliant prin-

ciplcs, laid* the foundation for assured financial stability. The superstructure reared was something to bo proud of, and a nest egg of surplus funds was deposited in London as a useful asset to further assure and enhance the credit of Now Zealand. That happy state of affairs lasted till the drain of the war period came, when after the National Government had gone out of office, the Reform Government “collared” the surplus funds and began, using them as freely as they have come to use loan moneys. The Minister of Finance announced in his statement delivered last week that the surplus for the financial year which closed last March, was £1,155,679, yet despite this solvent state of the finances the Government borrowed timing the year no less a sum than £ll,404,831, that being the net increase of the public debt over the year. That increase is equal to borrowing at the rate of nearly a million a month, which, while it saved the country from drifting to a deficit, certainly suggests falloping to financial stringency which is capable of having a serious effect on the fitness of New. Zealand. It is extremely fortunate for the country that the loans falling due next year are not likely to be embarrassing, but for some years subsequently the amount for redemption is substantial, and will call for much careful finance. Yet tho Financial Statement does not forecast much in tho way of economy or foresight in regard to the future. The Minister of Finance is cautious enough to try and keep up revenue by not decreasing taxation, but the estimated surplus for the year due to an expected decrease in revenue, and an increase in expenditure, is only about a quarter of a million. On top of that fact it lias to be borne in mind that the exoes of imports over exports is still n disturbing factor, and ns prices for primary products show little elasticity, it is much to be feared the adverse balance will increase. It is clear that tho finances of the country require: very careful handling. With the trade balance as it is, tbe situation is growing more and more delicate, and there is no real remedy offered to meet possibilities. The Minister takes an optimistic outlook, but that is no reason why his caution should not extend to action which will assist to justify the outlook. Good luck has been the share largely of the Reform Government in the past in regard to finance, but when difficulties present themselves in rapid esquence there is a call for statesmanship in adjusting national finance. The future at- present is very uncertain, except that we knowthe present times are growing lean. The swing of the pendulum .may come sooner than is expected, but tbe promise of that is not very encouraging, which is all tho more reason to expect economy combined with efficiency in the immediate handling of the national finance to make assurance as to tbe future doubly sure.