STRICT ECONOMY

Hokitika Guardian, 4 September 1930, Page 2

STRICT ECONOMY

COUNTRY’S PARAMOUNT NEED. ' ; ' > % . * a 4 , - *■ \ .. . PUBLIC, AND PRIVATE. \ y. • ■' f % ___ ' EXTRAVAGANCES OF PAST. WELLINGTON, Aug. 30. ‘lf an attempt is to be made to meet these charges by additional taxation instead of by drastic economy, then surely the result must be so to harass' industry as to create still fmther unemployment, accentuate our financial trouble and place us speedily in the position Australia, is in to-day,’ said Mr J. L. Griffin, president of the New Zealand Society of Accountants, when addressing the annual meeting of that body last evening. Mr Griffin dealt extensively with the subject of Government expenditure, and concluded by saying that the seriousness of the existing financial outlook transcended all party considerations, Nor was it the Government or any particular Government department that must economise, n>r the private trader would have to put his house in order and, if he wished to avoid the bankruptcj' court, regulate his expenditure according to his income. "DECENT OBSCURITY.” "The necessity for increased taxation, at . any rate in the past seems undeniable,” Mr Griffin said, "as it is now essential that we should pay for past extravagance and losses. There is even a glimmer of satisfaction in the thought that had it not been for improvement in our national accounting methods, the extravagance and losses might, have continued buried in the decent obscurity of annual financial statements until a still later date when, instead of having reached the serious position that we now have,. we might have readied the even more desperate position in which Australia finds herself at the present time. A MARKED DISCREPANCY. Mr Griffin referred to statements published in the 1930 Budget that—- " Any new capital works that .are

proposed are subject to a very careful scrutiny to ensure that no unnecessary or wasteful works are undertaken, as it is realised that all unremunerative expenditure out of loan moneys results in a continuing liabilty on the taxpayer in respect of interest and maintenance rates over a long period.” And that—

“Having regard to the definite tendency for a world-wide decline in price levels coupled with the probability that the weight of the debt charges will be further increased with' having to renew maturing loans, at higher interest rates we. have now reached a stage when great, care mpst he exercised in determining what additional works should be undertaken with borrowed capital.” There was a marked discrepancy between the ostensible . policy . laid down and the actual policy being pursued, said Mr Griffin, and thus there had' within the last few days been officially issued a table of railways under construction on which the anticipated loss was given as almost three-quarters of a million sterling per annum. It was a fair assumption that the actual loss would not prove to have been understated and it was difficult to reconcile the figures for tlje confessions of financial . rectitude contained in the Budget. Theoretic ally, no doubt, the test of “indirect returns” was valid, but it applied in existing conditions mainly to expendture for education and public health and was surely no longer applicable to transport when the country' was out of the pioneer stage and had alternative methods of transport. The loss was plain enough, but had not the time arrived to consider ways and means of stopping it? SAME FATE AS AUSTRALIA’S “Recently muc-h has been said of the dire financial straits of Australia,’* Mr Griffin said, “but are we not travelling fast along the same road? There are undoubted signs of rooks ahead which it will take some skilful navigation to avoid. Taxation has been increased this year. In the future, we have to face the additional drain on account of further unpayable railways and probably additional cost of unemployment. There will be no recurrence of a £60,000 transfer from the land assurance fund. This year’s so-called ‘saving’ of £175,000 affected by omitting to provide additional subsidy for superannuation funds which are admittedly in an unsatisfactory financial state, may be called by another name next year. If depression continues, the yield from income tax must fall, as also must fall the yield from any other sources of taxation. And coupled with all the foregoing is the fact that there appears little reason to anticipate any early improvement in the prices of our primary products, but rather the reverse. “Wr are in a period of depression and falling prices,” Mr Griffin concluded, “and the indications are that low prices are going to last for some considerable time. Increases in taxation have proved necessary. Further increases appear probable. Is it not essential that • these increases should be accompanied by drastic public economy?”