WELLINGTON NEWS

Hokitika Guardian, 7 March 1930, Page 2

WELLINGTON NEWS

BRITISH FINANCE

(Special Correspondent.)

WEI 44 NO TON, Ma rch4.

At the end of the current month the British fiscal year closes, and Mr P. Snowden, Chancellor of the Exchequer, will deliver his'“Budget” on April 14. The British national accounts are published week by week and the banks, financiers and 1 financial editors keep a close watch on the figures. The general expectation is that there will be a deficit necessitating fresh taxation, indeed there have already been forecastsof the probable new taxes. In Lloyd’s Bank Monthly the reserve and expenditure for the nine months ended Dec. 31 last are .given and it is there shown that excluding t«he self-balancing items and the sinking fund the ordinary revenue amounted to £418,474,175 as compared with £430,560,4(52 in the corresponding nine months of the previous.year, there being a shrinkage of £18,086,287. The ordinary expenditure totalled £551,908,469 as against £534, 191,020, an increase of £17,717,449. The deficit for the nine months was thus £133,'434,294 as against £97,630,558, an increase of £35,803,736. In liis Budget' statement Mr AV. Chra- hill late Chancellor of the Exchequer, estimated the revenue for the fail year, after allowing for changes in taxation, at £826.680,000 and expenditure at £822,584,000 thus showing an estimated surplus for the year of £4,090,000. But since tlve Budget supplementary grants have been I’oted expenditure was estimated at £822.928.000 and revenue at ' £827,010.000. During the current quarter further expenditure will be incurred on account of the schemes for the unemployment problem and other- social services. The position can scarcely he described as satisfactory and it appears reasonably certain that in place of the estimated Budget surplus Mr Snowden will he ifaeed with a substantial deficit. The most important part of the financial year is the last quarter, and the first nine months form no real criterion of the financial result'. For example, at the end of December 1928 there was a deficit for the nine months of nearly 138 million,. but

the final three months of the fiscal year transferred this into a .surplus of over 18 millions. In each of the last two years.'the first, three-quarters provided 58. per cent, of the full year’s re- , venue and the last. 3 months accounted for 42'per cent. Tn each of the last two years also the first three-quar-ters provided 78 per cent, of the expenditure, leaving but 22 per cent to he borne by, the last quarter. The Monthly says: ‘‘Assuming these percentages hold good for another fiscal year the revenue for 1929-30 would amount to £809.000.000 roughly and the expenditure to £819,000,000, so that on these estimates Mr Snowden would have to face a defio-'f of ]0 millions, but in view of additional expenditure caused hv recent' legislation it mnv eas'l v turn out that the actual deficit will appropriate double this amount.”

DOLE FOR WORKLFSS

Tlie recommendation of the Unemployed Committee to impose additional taxation on the people in order to "ire doles to the.workless is not likely to remedy unemployment. This has keen tried in Britain where all that it has achieved is to demoralise the workers. The unemployed have been used ns a means of securing seats in Parliament hr men who are ready to promise anything. The present Labour Government in Britain secured a majority at the last election on its promise to deal effectively with the' workless, and the sum total of its efforts lias been that there are now over 400.000 more unemployed than a year ago. The Unemployment Committee that investigated the problem in the Dominion set out with the conviction that unemployment is a social problem. It is only so to a certain, extent and is more economic than social for it is controlled by the law of supply and demand mainly. Unless the causes of •unemployment can he ascertained there is little opportunity of finding a remedy. The Committee has not sought for the cause, and so the remedy it recommends is worthless. What is the immediate cause of unemployment P The answer to that appears to be that the supply of labour is in excess of "the demand. There is undoubtedly a smaller demand for labour at the current award rate of wages, and the slackenod v demand is due to contraction in the national income. If one investigates further l #' great many factors present themsfelves-to account for the smaller national, income and factors tint rannot he controlled. The immediate cause is the excess supply of labour and the Committee’s recommend,v n.- 1 is in effect the creation of a fund to hold or stabilise the pri'-e of labour. Tt is just another 'form of the Anu n'cnn Barm Relief Hoard’s policy of stabilising flic* price of wheat. tvh’.-li however refuses to be stabilised, t ntil and unless the unemployment problem is studied from the economic point of view as well as the social unemnlovjme.nt will become chronic. It will hA l ad in a few months’ time, bun it will he just as had next year.