WELLINGTON NEWS

Hokitika Guardian, 6 September 1927, Page 4

WELLINGTON NEWS

BRIGHTER FROSI’ECTS

(Special to “ Guardian.”) | WELLINGTON, Sept 5. There is a very marked disposition throughout New Zealand 10 take an optimistic view of the economic .situation, and this no doubt is warranted having regard to the preva-img conditions. We are now appro,ichng the period when a new season’s primary products will begin to move overseas, and the prospect is that there will be increases in many directions. First of all there is evidence that there will he an increased output of dairy produce. There was an increase last year of about 10 per cent in the butter fat production, and a lurther small increase this year svcnis certain. 'I he wool clip should ho, and no doubt will he hotter grown and lighter in con- j ditiun than the last clip. Ihe winter , has not teen a had one, and sheep j have done well. 'Hie drought which | .had troubled Hawke’s Hay has end- j ed. and increases of both wool and mutton from that district may he expected. Frozen meat may also show some expansion. Assuming that theie wili bo an all-round increase in. produet ion then the question arises will this set off any deficiency in prices. There is no reason for believing that the level of prices will he higher this season than last. M 00l is the only product that gives promise of holding its own. At the Sydney sales which will continue daily until September 7, the better classes of wool advanced, with prices for other sorts unchanged. and if that is to he the feature of the season there will be no real cause for complaint. Crossbred wool, because of its cheapness, should prove attractive to manufacturers in Continental Europe. Vi itli respect to daiij produce. .Messrs \\. A\ eddol and Co. in their annual review point out that all exporting countries have increased their supplies and the tendency is of further expansion. But that is not the only factor. Every country supplying the British markets is making very great efforts to improve quality, and this is especially the case with outmost formidable competitors, Australia. and Argentina. The price margin between the butters of New Zealand, Australia, and Argentina is now very small, and every improvement in quality of Australian and Argentine butter means stiffening the competition for New Zealand. For frozen mutton and lamb the outlook does not appear to be very bright. Chilled beef from the Argentine dominates the Smith field market with respect to imported meat, and there arc no indications that there will he any. diminution in the supplies of chilled meat. If current prices hold generally it will he satisfactory, for the increased output will provide the additional income. It is well to bear in mind that for the year ended September 30, 1920. the exports showed a shrinkage of £7,500,000 as compared with the previous year, and for the ten months of this year there is a further decline of about £2.500,000. This hurdle must not be overlooked. A rise in prices, if it averaged only 5 per cent, would he of immense help to us. It seems that wo are in a measure justified in taking an optimistic view, so long as we are not carried away by optimism and so overlook fundamentals. INCH EASED TAXATION.

Those who have examined the financial affairs of the Dominion set out in the Budget were long ago convinced that increased taxation is inevitable, consequently the new proposals in respect to exemptions for income tax purposes occasions no surprise. It is expected that the tariff adjustments to be submitted by the Government will also be in the direction of increasing _ indirect taxation. The Minister for Finance has been obliged to look for more revenue, for tho expenditure is going up by leaps and bounds. Last year there was an increase of considerably over 5700.000. and this year the increase is likely to be larger. There is first £300,000 required to meet the interest on the six million loan floated in London in May last; then there is the amount required under the Family Protection Act estimated at £200.000, and there is the £IOO.OOO for the Singapore base. Then we have to reckon with tho increase in departmental expenditure. Last year, it exceeded £IOO.OOO and tho increase this year is not likely to he less. Taxation is an effect, and tho high taxation is caused by tho borrow and squander policy. There is no chance of taxation being reduced until this jKilicv is reversed or greatly modified. The depression and unemployment are partly the effect of burdensome taxation.