The Sun 42 WYNDHAM STREET AUCKLAND MONDAY, APRIL 28, 1930. A PHANTOM DIVIDEND

Sun (Auckland), Volume IV, Issue 957, 28 April 1930, Page 8

The Sun 42 WYNDHAM STREET AUCKLAND MONDAY, APRIL 28, 1930. A PHANTOM DIVIDEND

OX an increased turnover of public money last financial year, the Prime Minister, as national treasurer, was enabled to declare a dividend of one penny plus a farthing in the £. The profits usually a fictitious result in politics—amounted to £150,000. This was a moderate surplus indeed, but still a definite gain, and certainly better than the preceding deficit of over half a million sterling. If the credit balance were to be distributed on a population basis, it would provide (excluding those politicians who helped themselves from the State’s coffers last year to the extent of £IOO each) a dividend-dole of two shillings to each person within the Dominion and its islands. Since such a bonus is not enough to pay for an adult to see a test match between the All Blacks and the British representative Rugger team, the Government need hardly bother to make a pro rata distribution. The surplus, however, is sufficient to help solve the unemployment, problem. Relief employment now costs the State sometiling like £20,000 a week. That, at any rate, was the average weekly rate of expenditure last year. Thus there has been enough money left over on the right side of Sir Joseph Ward’s Budget to pay for six weeks’ unemployment aid for those still unemployed. This gives an opportunity to make another magical attempt absolutely to end unemployment within five weeks. But as far as the disillusioned taxpayers are concerned, the national surplus may be dismissed as a phantom dividend, as a ghost that will not walk. Such, in plain terms, is the pith of the nation’s accounts for the first full and futile financial year of the United Government. It has achieved a record in high finance—higher than Hamaan was hanged. Political wizardry has made the money to come and go. The Dominion’s Treasurer succeeded in balancing his Budget for the period simply by doing everything he vowed he would not do, by surpassing the squanclermania for which he trounced his predecessor, the lion. W. Downie Stewart. Let it he said that everyone realises how circumstances demand an exercise of compassionate criticism, and so in that clear realisation the financial record of the Government may be reviewed with sympathy and generous restraint. It is essential, however, to look at things as they are, and not as hypnotised partisans see them. And these things'are plain and cannot be ignored. The Government was given charge of the nation’s purse on the clear understanding that it would not repeat the extravagances and exactions of the Reform Administration. This was a condition not implied, but a condition deliberately guaranteed by the United Party. It was embodied in the party’s alluring manifesto and blared from a score of platforms. Has that guarantee been fulfilled and honoured in the spirit with which it was voluntarily offered? Par from it: .on the contrary the pledge has been broken and cast aside. The conditions laid down in specific terms by the United Party left no scope or excuse for any misunderstanding of its guarantee. There was to be no increase of taxation, no expansion of expenditure, no high-priced loans (although there was to be an orgy of borrowing), no more unemployment and bad times, and no further cause for anxiety over the Dominion’s finances. What has been the result? All of these things which helped to thrust the preceding Government out of office have been repeated and extended to profligate excess. That is the truth of a Budget which an intelligent country is expected to applaud. Those who can see no reason for applause will hope at least that there may not be a demand for an encore. With hell, book and candle Mr. Downie Stewart was damned for having extracted from the people in direct and indirect taxation the sum of £17,800,000 in even figures—an exaction which, according to a statement by Mr. Winston Churchill in the House of Commons, then made New Zealand the second-highest taxed country in the world. Now, the Reform Treasurer’s successor is being Trailed by deluded admirers as a supreme master of finance for having taken from a tax-shackled community in the same way rather more than £18,800,000. Anticipation of even a greater revenue was spoiled to some extent by the failure of wealthy people to die, as had been expected. Stamp and death duties alone fell short of the estimate. Everything else surpassed the high-pitched expectation of the Government. That is the lamentable record for which the electors of Parnell are being invited to reward the Government by electing its party’s candidate. There is no valid reason for bestowing suen a reward on an Administration that has failed to do any one of the things it guaranteed to do without a penny additional cost to the taxpayer.

THE BENEFITS OF THRIFT

ONE of the benefits of thrift as applied to deposits in the Auckland Savings Bank is that a substantial proportion of the profits is returned to the community in the form of donations to charity and other worthy causes. By this means over £IOO,OOO lias been paid in donations by the trustees since 1906. The trustees are careful to add, however, that no donation is a precedent. Because handsome benefactions are made now, it does not necessarily follow' that this will be repeated next year. The bank’s first duty is to protect its depositors and provide them, where possible, with facilities for obtaining finance, a principle on which the bank’s successful system of loans to depositors is based.

While the Dominion’s largest private savings bank continues to devote part of its surplus funds, within safe limits, to public objects, there is occasional curiosity as to the policy adopted by the State. The position of the Post Office Savings Bank is that it has become a valuable auxiliary source of public finance, which successive Ministers of Finance have not hesitated to use. So positively has this function of the Post Office Savings Bank come to be accepted that the Minister of Finance in the late Reform Government, the Hon. Mr. Downie Stewart, had ideas of carrying the principle further, so that the profits of private savings banks as well could be devoted to what he termed “national purposes.” Since well over two-thirds of the total sum handled by the five private savings banks of New Zealand is carried on the books of the Auckland Savings Bank, there was never any doubt as to the target Mr. Downie Stewart had in mind. Such a proposition might have seriously impaired the bank’s ability to conduct what it regards as one of its primary functions, the provision of a reserve of liquid capital for the use of the community. In the long view, of course, profits from the State Savings Bank are also applied to community purposes, but the manner in which they are applied has considerably less appeal for the public, and is liable to be interpreted as an example of administrative opportunism. In spite of high imports, New Zealand is thrifty at heart. It has higher savings banks deposits per head of population than any Australian State except Victoria, and the amount available for either national jiurposes or worthy objects of charity is correspondingly large.