ECONOMY COMMITTEE

Hokitika Guardian, 22 December 1930, Page 2

ECONOMY COMMITTEE

TO BE SET UP.

STATEMENT BY MINISTER. (Per favour of Government.) WELLINGTON, December 20.

As part of a determined effort to balance the Budget and reduce costs, the Government has set up a Special Economy Committee to make a drastic overhaul of all Departments, from the Prime Minister’s downwards, to investigate and report from time to time to Cabinet, on the further limir tation of and economy in State services. jne personnel comprises the Hon. Sir Apirana Ngata, the Hon R. Masters, the Hon W. A. Veitch, the head of the Treasury and the Public Service Commissioner.

, In a statement released to-day, following continuous long sittings oi Cabinet, the Hon. E. A. Ransom, Acting Prime Minister, said that the present economic position, due principally to the decline in the value of the Dominion’s primary products was engaging the active attention of the Government. The decline of export values was not peculiar to New Zealand, but was evidence of the fact that that world, prices are tending progressively downwards. The country was therefore faced at present with n substantial reduction, in the notional income. They would have to adjust thp expenditure npoprdingly ( From the point of view of the public accounts, the Government was faced with reduced revenue from both Customs and land and income tax, from railways, and in fact, from all heads of revenue during the year. On the other hand debt charges, pensions, and other statutory, payments of a rigid nature resulted in additional expenditure. The position was most difficult for any Government to face, but Cabinet was bringing the whole economic situation under review Lower prices for our primary products in the world’s markets had to be met by. lower production costs. The. Government fully recognised that the question of lower - rates and taxes was involved in' ' this pressing problem, and the. special Economy Committee set up would make a searching investigation and overhaul of all departments of State, from the Prime Minister’s downwards. ■ E. A. RANSOM.

NO MORATORIUM,

THE GOVERMENTS DECISION. 1 WELLINGTON, December 20

\ The Acting Prime Minister the Hon. E. A, Ransm issued the following statement covering .several important decisions made by the Government The Government has had under consideration the general position of the country , in all its aspects and while it- recognises the grave difficulties flf the situation,:• 4a® to circumstances and conditions, perhaps unprecedented in the history of New Zealand, it deprecates any attempt to exaggerate the position or. to stntnpede the country into hastily and ill-con-sidered solutiona, in the first place on two questions that have excited discussion in the Press and at conference; and even elioited tentative pronouncements .from public men, finely the (fusion of a national Cabinet, and the early summoning of Parliament. Cabinet feels that these are matters that must await the return of the -Prime Minister, who is entitled to a dominant voice in their deterfiiination, so far as his Government and political party are concerned,

Then in regnrd to the demand for an immediate assembly of Pnrliaent, Ministers do not consider this step either necessary or yrise at this juncture, I have recently announced the view of Cabinet, and the Prime Minister has definitely declared from England that a moratorium is undesirable. These views nre supported by the State Loan Departments, which provide nearly one-halt’ of the total amount of finance for farmers and who say that there is not at present such a pressure from their clients as would justify the application of ft moratorium, even if that kind of remedy were desirable, which they emphatically deny. The Government, thinking that a diagnosis qf the condition of each section of industry was necessary, and that it should he carried out in n sane and practical way, as a beginning approved, the setting up of n emmittee of experts setting up olf ft committee of experts in the dairy industry, which would determine the extent to which that industry is embarrassed, nnd suggest the form of assistance required. The trouble may be far greater than is realised, or much less than genera’ statements make out. It is recognised to be serious enough, owing to the severe fall in the price of dairy produce, but the perturbation of many dairy farmers may rather he in anticipation pf the effects upon their fiananees and holdings of the slump in prices, than in consequence oif extreme financial pressure applied by mortgagees. The committee suggested to investigate the condition of the dairy industry will consist of men who are intimately acquainted with the position of the dairy farmers

in their respective districts. The Department of Agriculture is getting into touch with the men whose names have been suggested. The committee will be asked to meet in Wellington early in the New Year and to carry out their investigations with all despatch. It is hoped that on the Prime Minister’s return, the actual position, with Cabinet recommendations, will be ready for action. Those in the pastoral industry have made no direct approach to the Government for assistance. The Government took the precaution a month ago to consult with the Government’s directors on the bank of New Zealand, who advised that not only was a moratorium undesirable but unnecessary at present. The Government gathered that although the banking figures showed the strain on the resources of nil the banks, accentuated iti cases by the greater financial difficulties of Australia, all possible steps were being taken to maintain the .strength of mercantile firms and stations agents to support land owners, and to assist farmers where they had exerpised care arid economy in the management of their farms. ’Die Government recognises, as well ns the heads of financial institutions and business men, and the farmers who overreached themselves in the purchase of estates or in expenditure, and have had difficulty in normal times in meeting their current obligations will experience extreme hardship. It is prepared to meet delegations off each branch of industry, which should be ready to state its actual and detailed difficulties and its suggestions for the minimum assistance required of the State,

The position of the public finances is appreciated by the Government, and has been the subject of the closest scrutiny and consideration. Revenue lias fallen in a much greater ratio than expenditure due to the same causes that have affected all branches of industry, and more especially the primary industries. The charges on the Consolidated Fund cannot within the financial year be shortened to the extent that will take up the decline in revenue, owing o the heavy rigid annual outgoings for interest, pensions, and special permanent items that are the accumulation oT a generation of Parliamentary and Government action. In the annual appropriations for service ,the first overhaul of the Departments, made last month, at the earliest available moment after the close of the session, revealed the extreme difficulty, in the face of sectional demands by institutions and the public, in curtailing deferring or cancelling the expenditure Of items voted by Parliament. Economies proposed in certain Departments, suit as defence, and the working of the railways, w ; ll not he materially effective within Hie financial year, E. A. RANSOM.