The Southland Times. PUBLISHED EVERY MORNING. Luceo Non Uro. SATURDAY, MAY 31, 1930. SEEKING THE WAY OUT

Southland Times, Issue 21097, 31 May 1930, Page 6

The Southland Times. PUBLISHED EVERY MORNING. Luceo Non Uro. SATURDAY, MAY 31, 1930. SEEKING THE WAY OUT

Motorists have raised an objection to any additions being made to the taxation on petrol, and there will be protests from other sections of the community if any attempt is made to increase their burdens, but the man on the land will view all these efforts and protests in the light of the knowledge that the bulk of the taxation will fall back on .the land in the end. One of the weaknesses of democratic government is that the easy way to make good the losses incurred by big business departments is to resort to taxation, and it is through this weakness that the country is provided with the melancholy spectacle of persistently rising administration costs. Taxation is not the solution, because it paves the way for further expenditure, and it is really absurd to think that there is real economy when the sums levied by the State are shifted from One shoulder to andther. Some time ago Sir Joseph Ward declared that if the drift in connection with the railways were not stopped the losses to be made up by the taxpayers would climb to £2,090,000 and though they have not yet reached that figure it is obvious that the drift has rtbt yet been halted. Mr Forbes speaks about an overhaul of the Department, but unless there is drastic retrenchment in the numbers employed, how can he hope to save anything like £1,250,000, especially if new construction is going on and loading the Department with further miles of track which will swell the annual deficiencies. Last year the Government relieved the railways of £8,000,000 of capital charges on which interest had been paid to the Consolidated Fund, but at the same time imposed on the railways the losses on branch and developmental lines which had been transferred as a charge to the general fund. Thus the relief to the Department was 'worth practically nothing. The principle underlying Mr Coates’s action in making these lines a charge on the general funds was that these lines were political in character or were developmental and the services on them could not be carried on if the Department were run on business lines. As these votes were shown annually in the Budget there was no secrecy, no disguising of the actual position, and the public could see exactly what these lines were costing. A great deal can be said for this system. Although the Railway Department is a big business organization, it is. subject to political interference and the General Manager must carry on his administrative work within the limits set by the Government, while he accepts additional burdens put on him by political exigencies. For many years political needs kept the railways under a system of accountancy which wholly neglected depreciation and renewals, and when the Reformers put the Department on a business footing they found that there was a tremendous leeway to be made up. These deficiencies which should have been met out of renewal funds had to be made good by meatis of additional capitalization, and so the “successful administration” of the Liberal regime was exposed as a Micawber-like business which shifted the burdens on to future generations and prated of its glowing achievements. Today the railways are suffering from those old errors, and the effects are intensified

s by the fact that the motor offers serious competition, and checks any upward tendency in rates. It is all very well to talk of the developmental work done by the railways. If that work is the railways should be rewarded for it, and not asked to shoulder burdens which properly should be borne by other parts of the governmental machine. This is the case for the railways; but the case for the taxpayer is that before he shoulders additional burdens he should feel convinced that everything possible has been done to effect true economies. Co-operation in this work will lead Mr Forbes to a conflict with the Labour Party, but he will have assistance from the Reform Party, and out of these troubles may come a closer approach to harmony than seemed likely at the end of the last session. The Prime Minister has reviewed the present, condition of the finances with frankness, and in language that is a distinct invitation to the House to assist, and there is every reason to believe that Mr Coates will renew his assurances that there will be no attempt to obstruct the Government, but on the other hand, that the Reform Party will assist the United Party in whatever way it can, provided, of course, no departure from the party’s political principles is demanded. In this spirit the House will be able to accomplish a great deal, and it seems to us that the political situation may be cleared of much misunderstanding and suspicion as a result of an understanding between the two major parties to expedite the solution of the grave problems now facing the country.