THE DEFICIT

Hokitika Guardian, 24 April 1929, Page 5

THE DEFICIT

SECOND IN FORTY YEARS.

CAUSE AND EFFECT.

(Taxpayer.)

The deficit of approximately £550,000 in the operations of the ordinary revenue account of ihe Consolidated Fund announced by Sir Joseph Ward at tbe annual meeting of tiie Wellington Chamber of Commerce last week, need occasion no serious public alarm. It is the result, in a great measure, as llie Prime .Minister explained in addressing the Chamber of Commerce, of a decline in the receipts 'from two important sources of revenue, Customs and Income Tax, the former having fallen £302,000 below the estimate of Sir Joseph Ward’s predecessor at tbe Treasury and the latter by £BO,OOO. The Prime Minister in stating the facts was careful to remind his audience that his predecessor in submitting his Budget had expressed doubts as to his expectations being realised. That was an example of the courtesy that should be maintained between contending politicians, and particularly between politicians who at different times are responsible for the administration of the affairs of the country. The only line of safety Sir Joseph’s predecessor could have followed in adjusting bis Budget last year would have been to increase taxation or to lessen expenditure and neither of ■'these expedients would have, been acceptable to Parliament at that time.

RED UCIXG EXPENDITURE.

New Zealand has shown such a long run of surpluses, with only one break, during the last forty years, that critics beyond the Dominion, and perhaps some of those within, may wonder what lias happened to its finance this year. With the possibility oF misunderstanding in this direction 'it may not be out of place to quote hero what Sir Joseph Ward had to say on the question of expenditure in his address to the Chamber of Commerce. “As regards expenditure,” he explained, ‘•in order to ensure every aid to balancing the Budget, as soon as I’took offic' 1 issued instructions to Ministers and heads of Departments, in con-

tinuation of similar steps in this direction by the previous Government, for careful supervision in controlled ex-

penditure, with the result that a saving in Departmental votes was.effected. Under special Acts, however, an item of £156,000 had to be met on account of advanced paymeals, while the expenditure for old age, widows’ and soldiers’ pensions exceeded the estimates.” It would seem, therefore,

that both Governments as the financial year progressed had realised the difficulties of the situation and had sought to mitigate them.

THE TAXPAYERS’ BURDEN

But with all tlijs said Tfinft: dorie it scorns important in the best interests of the Dominion that the politicians should apply themselves earnestly to the reduction of superfluous expend! ture. They will not lack opportunities in this direction. For the present, one instance must suffice. Presumably the

deficit of £550,000 announced by Sir Joseph Ward last week includes the loss on the non-paying branch lines of railway imposed upon the Consolidated Fund by the Government of the day two or three years ago. The effect of this arrangement lias been to relieve the Railway Department of responsibility and expenditure at the expense of the taxpayers. In the financial year 1926-27 the impost reached .£359,504, in 1927-28 £445,221 and it will not bo surprising if the amount passed on to the long suffering taxpayers, great and small, during the financial year just closed runs into as much as half a million. This in itself would account for the greater part of the deficit Iho Prime Minister has to report to Parliament and Take upon his own administrative shoulders. But the unpaying

railway lines are by no means the. only source of all the taxpayer’s troubles. Let the Government apply itself strenuously to this problem and relief will not lie long delayed.