WELLINGTON NEWS

Hokitika Guardian, 1 December 1931, Page 7

WELLINGTON NEWS

. THE CONSOLIDATED FUND. (Special Correspondent). WELLINGTON, November 28. A good many have no conception of what is meant when reference is made to the. Consolidated Fund of the State. It is the pooling or consolidating of all the receipts by the State, such as taxes, licenses, fees, etc. In London there are certain Government securities that are known as “Consols,” which before the war were the super-gilt-edged of the security market. The word “consols” is an abbreviation of the word consolidated. Many years ago, when Mr Gosehen was Chancellor of the Exchequer, he conceived the idea of consolidating the various issues of the .British Government, carrying varying rates of interest into one stock at one rate, and for some time this particular stock was known as “Goschen’s Consols.” Of course there is a difference between the Consolidated Fund and Consols, the consolidation or pooling being of different elements. Some people regard the New Zealand Consolidated Fund as some sort of a magic old-stocking and that you have merely to dip your hand into and take out all the money you require, and keep on repeating the operation ad lib and with impunity. This, of course, is a great fallacy, and it must be obvious to the meanest intelligence that more eannot bo taken out of that- fund than is • pat in. A good many people have deposits in the Post Office .Savings Bank, and they know that they cannot draw out morp than they have put in plus the small amount of interest allowed by the Bank, The Government cannot draw out of the Consolidated Fund more than is put into the Fund. If the withdrawals from that Fund or the expenditure is greater than the amount of money then the excess expenditure must be made up by borrowing. The Hon, W. Downie iStewart, Minister of Finance, in his addfess at Dunedin stated, what was already known, that last year, that is to March 30, 1931, the country finished up with a deficit of .£1,639,000, and that in spite of heavy increases in taxation, and large reductions in expenditure. For tlm current year, when the estimates were presented by the Prime .Minister, it was anticipated that there would be a deficit of £4,500,000; two months later the probable deficit was estimated at £5,000,000, then to £6,850,000 and finally to £8,275,000, and we cdnnot.bc sure that the deficit wi not, be greater. Judging by 'the mostrecent world developments there is every probability that the amount of the deficit will be greater. This deficiency must be covered in the ultimate by i further r. .fn.-’tions in, the expenditure j and by bonowing. Of course taxation can 'be increased, but is one thing to pass legislation to increase taxation, and another thing to get' the taxes in. It is doubtful, indeedjone can say it is certain that hundreds of those assessed fqr income tax will bp tumble to pay the i tax. The tax is assessed on the past year's income, but since then incomesall round have decreased, and it is out- of the contracted income that the taxes must be paid. Boroughs are feeling the pinch in the sahie way as the •State, for they are finding considerable difficulty in getting in their rates. The Consolidated Fund is overdrawn. The Coalition Government has been trying its very best in various ways to remedy the position, but so far without . success. It is very obvious, therefore, that unless there is some radical magical change in the economic situation, there must be further drastic reductions jn expenditure, A good many service.' and utilities that are being nursed in the hope that things will improve, must ,be sacrificed, and more is the pity. It is out of this depleted and heavily overdrawn Consolidated Fund that tin Socialist Party, if returned to power, would make further provision for tin unemployed, and additional grants would be made to Hospital Boards for tin relief of distress arising from unemployment. This cannot b© done without borrowing, and borrowing locally w-auh be very difficult, if at all possible.