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Hokitika Guardian, 24 August 1933, Page 7

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COSTS OF N.Z. GOVERNMENT. INSISTENT NEED FOR RECOVERY. Weariness an well-doing so 3ar as State economies are concerned is apparently assailing the Government at the present time (says a statement by the Associated Chambers of Commerce). The insistent need to accelerate national recovery by relieving trade, industry and commerce, and the general taxpaying community, of some of the excessive costs of Government, is given practically no recognition by the Minister of Finance in his recent statements on the national finances.

The country has not forgotten the public statement made by the Prime Minister (Rt. Hon. G. W. Forbes) on April 5. “It is obvious that there will have to be further economies during the coming financial year,” he said. “New Zealand must remain solvent, and the only way to achieve that is to bring down the expenditure in keeping with the revenue. The national revenue will be further reduced as a. result of the fall that has taken place in butter values, and the only way t 0 keep the country on a sound footing is to cut expenditure.” There would have to be a further reduction in departmental expenditure, added the Prime Minister, and that would no doubt involve a cutting down of departmental services.

I The Real Question. Only two months later, namely, on June 22, the Acting-Prime Minister anj Minister of Finance (Jit. Hon. J. i G. Coates) while speaking on the nat- | ional accounts for the financial' year, ended March 31, and in revfewing pros* I pects' for-the current year, stated bluntly that “further large-scale economies were not practicable.” That announcement apparently means that the subject of any further substantial State economies is closed, and that there is (t 0 be no relief for the taxpaying community. But whatever the taxpaying community has been, led to expect—undeed, whatever it has a right to expeeu in any case—the question is primarily not one of what economies are considered to be politically practicable. It is what national -harm will continue to be inflicted by the maintenance of excessive taxation for , the maintenance in turn of a top-heavy structure of Government which is to-day beyond the means of the people? The Acting-i Prime Minister, in dealing with the budgetary position confronting the Government during the last, financial year, says that “on the one. hand there>were definite limits, to increasing taxation, and on the other II hand there were limits - beyond which it was not possible to reduce expenditure unless State services were to be ruthlessly abandoned.” Mr Coates then goes on to show how the Government, in face of this position, proceeded to tigiiten the taxation screw in preference to practising self-discipljne' in expenditure. So- little “ruthlessness” was evinced in dealing with State services that specific economies were almost cancelled out by increased expenditure in other directions, so that, the net result of economies has been to give relief to the extent of a ridiculous £112,000. When expenditure on public works (£2.295.916) and on unemployment (£3,788,538) is taken into account, it is seen that the total Government expenditure for the last financial year was actually £28,612,833 —a reduction of only 13 per cent on 1929-30.'

Back to 1929-30. The manner in which expenditure is being increased during the current financial year gives rise to the gravest concern. The Government, is . setting out to spend approximately £32,546,917, which is an increase of £3,934,084 or 12 per cent, on last financial year. In other words, expenditure is back again to. the 1929-30 level, except for half a million. The Government has been frankly looking to a rise in produce price s to help the position, as well, as expecting considerable benefits from the World Economic Conference. The Conference has f&iled, and, besides this New Zealand is being hard-pressed with regard to quotas on dairy produce. The Do-, minion is consequently comnelled to face up to the same inevitable responsibility that confronts every private individual—tjhat. of living within it* means. It cannot do.that if the Government persists in the present rate of State expenditure, which is perilously locse to that of the prosperous days of 1929, while the national income has dropped to an alarming extent, fully explained by the Prime Minister in the House on January 27.

The country will now await an early announcement by the Government of its intention to effect without further delay radical and substantial economies, in furtherance of the statement by the Prime Minister in April, and in accordance with the needs of the situation.