The New Zealand Times. TUESDAY, MAY 6, 1919. A STRONG FINANCE

New Zealand Times, Volume XLIV, Issue 10272, 6 May 1919, Page 4

The New Zealand Times. TUESDAY, MAY 6, 1 919. A STRONG FINANCE

At the end of the eleventh month of the year it was quite evident that the financial year was going to end with a large surplus, Owing io ofn'ious difficulties of forecast -presented hy uncertain conditions, it was necessary in forecasting the end to allow a large margin for the unexpected. .The estimate of a million of surplus made at the time was thought to have allowed a fair margin of- safety. The end of the year has shown that the margin while -good enough for safety, was quite too small for the magnitude of the actual surplus. The Minister lor finance, who is in touch with the figures, has’ announced in London the amazing fact that the surplus has readied £3,500,000, and his lieutenant here has said that - when the auditors have done their work there will not be any material difference. This huge surplus, breaking all records of New Zealand experience, even of the land boom days, proves the strength of the finance devised by the Minister of the National Government. It may not satisfy economists, but it is very satisfactory to financiers. It is true that the great need of the future is a continuation of ■ sound political economy and financial ability. But the great success of the finance policy has given the country a cash margin which secures ample time for the consideration of the economic side of the problem. With fifteen millions of aggregated cash surplus invested in London the Dominion can'rojoico in an easy and sound position. The Finance. Minister of the reconstruction period, whoever he may, be, will have the command of resources sufficient to face not only the largo war charges of all kinds from interest on loans to military pensions, but also tbo needs of the forward policy required for the increased production which is the main problem left us by the war. It adds to the ease of tho situation that a large proportion of the interest on tho heavy war loan aggregate is due in the country and will bo available for taking part in the development of our resources, , Tho revenue has reached tho record of over twenty-two millions, with an expenditure of £1f<,600,000, (with a surplus of £3,000,000. To the expenditure will have to be added a substantial increase in the loan charges, which at March 31st stood at six millions, and an increase necessarily smaller of tho pension liabilities* which totalled on the same date two millions. The margin, however, is large enough to cover these. But there .will be more liabilities for tho forward policy, which is our main hope. Wo may obtain relief from German indemnities, but it will be safe to leave that out of calculation, depending on tho strength disclosed in the Budget figures. In that case there can bo but little hope of decreasing taxation. Wo shall be fortunate, indeed, if we escape the need for increasing our imposts. (However, with fifteen millions in cash for the nucleus of a good financial policy, wa can look forward to the postwar period with far easier minds than seemed likely to tho most optimistic imagination a year ago. The war has revealed tho extraordinary financial strength of the Dominion, and has left Us ar the same time in a thoroughly sound position, with ample time to devise measures for taking advantage of both tho strength revealed and tile soundness achieved.