REASONABLE ECONOMY

Rotorua Morning Post, Volume 1, Issue 149, 16 February 1932, Page 4

REASONABLE ECONOMY

lVLotoring experts inform their public in every motoring column in every newspaper that carries a motoring column, that the wrong way to pull up a car is to jam the brakes hard on and remove the tyres. Quite apart from the motoring experts, the fact is self evident. In • applying its economy schemes, the Government might take a lesson from this simile. There is a grave danger at a time when economy is being preached and rigorously practised, that it may be carried to extremes and recovery and progress stultified by the curtailment of the means for normal development. There is no surer way to undermine confidence and restrict progress, than a too zealous application of economy measures in both Government and private enterprise. To take a case in point. There have been hints from time to time, that the Government has not ceased to eontemplate a furtlier wages cut. These hints may have no foundation in fact, but their mere reiteration, whether real or fahcied, has very distinct reactions upon the equanimity of the people. In the face of the facts which have become apparent since the first cut was applied, there can be no dopbt that the application of a second cut in the present condition of affairs would have the most serious reactions upon the great body of the people. The average private purse has been drawn as tight as it is possible to draw the strings and the imposition of further income reduetions upon the great mass of the wage-earners would only further jeopardise confidence and reduce purchasing power without improving the position. The Institute of Architects has rendered public service by drawing attention, in a carefully-worded resolution, to the peril of economy which knows no bounds. The Institute quotes with approval the British Prime Minister's warning; — "I hope that this cry of economy is not going to be made a stunt. There are too many people, both private individuals and public authorities, wh'o imagine that simply by cutting down expenditure they are doing a service to tlie nation." We have advocated economy, particularly where the present scale of expenditure can be maintained only by burdening still more an . already overburdened community, but we have also poiuted out that this does not involve a jolting application of the brakes on all enterprise. It means, rather, replanning of public and private expenditure. The national income has been reduced, and there must be an adjustment. But it Will not make the task'easier to go from the one extreme of reckless extravagance to the other extreme of panicky purse-closing. « To apply a different figure-of speech, the use of an axe at the root of a sound tree is the height of foolishness when careful pruning is called for. Special reference is made by the Institute to the building industry, and it is stated: — "Members of the Institute are aware of cases where building projects of an essential nature, and fop which funds are available for their prosecution, have been abandoned without reason other than what may perhaps not unfairly be described as panic. In such cases undoubtedly public disservice is done, and the individual also loses the opportunity of building at lower cost. No doubt in some places and for some purposes we have overbuilt, but that has .often been due to wrong financial methods. In hous- | lUg particularly we have an illustration and an example of the adjustment that must be made in :both private . and public spending. Many persons have spent their money in other ways and have relied on loans to pay for the necessary provision of houses. The error of this is now plain. In future houses must still be built, but there must be more thrift and less borrowing in the financial provision. In many other ways there has been diversion of money from productive and permanent value works to less useful purposes. Now an endeavour must be made to direct a greater part of expenditure into' useful, channels. It cannot be" too ofteii repeated that true economy is best attained by prudent and well-planned expenditure, kept within the means of the individual and the community.