AN IMPROVEMENT

Rotorua Morning Post, Volume 2, Issue 265, 2 July 1932, Page 4

AN IMPROVEMENT

The taxpayers of the Dominion, on this occasion will be at one with the Prime Minister in "deriving some satisfaction, at least," from the fact that the deficit of approximately £2,550,000 forecasted by the Minister of Finance will be some £400,000 less than was originally anticipated. These occasional rays of sunshine, fleeting as they j may be, do something to relieve the gloom in which we are enI compassed. The Prime Minister made it plain in his statement, that this unexpectedly favourable position was to a very large extent due to the rigid curtailment of expenditure, and that had ft not been for the fact that exchange costs amounting to I £374,000 had not been allowed ; for in the Budget, the expendijture wrould actually have been below the estimates. This is a f eature of our fmancial adminis- ■ tration which in the past has ! been most noticeable from its j absence, and it is encouraging to .note that under the compulsion of stern necessity, our financial administrators have at last ; learned the lesson of living with- | in their means. Concurrently with his announcement, Mr. Forbes touched on the very ob- ; vious fact that "a deficit of £2,- , 140,00 cannot be accepted with ; equanimity," and here again he has but anticipated the general | feeling of the country. However, there are several hopeful signs which while they do not offer any very definite comfort, at least hold out some prospects that the position may be further relieved. The chief of these is

undoubtedly the Ottawa Conterence ; while it is a mistake to expect that all the eggs in the basket of Imperial preference will turn out to be golden, a working commercial agreement between the units of the Empire must unquestionably contribute a very great deal towards the rehabilitation of this Dominion and all of the participating parties. Then again there is the prospect, admittedly indefinite, of a favourable relaxation of the exchange rate, the more definite prospect of a decrease in unemployment and an increase in producfivity with the passing of the winter season, and the probability of recent economies manifesting their effects to a more appreciable degree than could be expected during the first months of their application. The Government has undoubtedly effected very valuable savings in many directions, and while there still remain a number of avenues towards which economy measures should be direeted, something at least has been achieved. But notwithstanding these more encouraging signs, it it abundantly evident that further steps must be taken to curtail expenditure if New Zealand is to square its accounts within a reasonable period. One thing is certain. This country has reached its taxable capacity and irremediable harm will be done if the Government attempts to balance the accounts further by this means. Admittedly a deficit of £2,140,000 cannot be viewed with equanimity, but increased taxation cannot conceivably he contemplated in that light. If all other resources fail, the Government will be much better advised to adopt the justifiable expedient of spreading the deficit over a reasonable period of years, rather than strain the reserves of industry and commerce to meet the position at the next annual accounting.