GREAT ECONOMY DRIVE

Sun (Auckland), Volume IV, Issue 984, 29 May 1930, Page 12

GREAT ECONOMY DRIVE

STATE DEPARTMENTS USE PRUNING-KNIFE TAXATION INCREASE Special to THE SUX WELLINGTON. Todav. What is probably the greatest economy drive ever launched in New Zealand is now in progress by the Government. The heads of various Government Departments, at the end of the last financial year, received circulars setting out the fact that in consequence of the world-wide depression in raw materials and the lower returns for the Dominion's exports a considerable shrinkage of revenue is to be expected for 1930-31. They were requested to bear this fact in mind when framing estimates for the current year and informed that no unnecessary work was to be undertaken. There is abundant evidence that the pruning-knife is being used to delete all items of expenditure which may be jettisoned other items which partmental needs and before the campaign has gone much further there maybe jettisoned other items which will Jead to concern on the part of the sections of the country interested. Following a prudent policy, the Treasury has called attention to the situation at* the earliest possible moment and all arrangements are being made against the position. One fact which gains attention is that in consequence of our decreased national income and the higher exchange rate purchases abroad are falling off. Imports to the Dominion i\X£. expected to be markedly lower this year and in consequence the Customs Department, which last year provided £9,000.000 of the £19,000,000 taxation paid by New Zealanders, will be unable to fulfil the demands made upon it at the present rates of duty. In a period such as the one upon which the Dominion is now entering the volume of some imports is also likely to.be uncertain and their return from a” higher rate of duty problematic. The experience which was that of the Hon. W. Downie Stewart of the uncertainty of Customs revenue is likely to be” repeated to the new Minister of Finance. With this knowledge and a realisation that reduction of State spending below a certain point—and that markedly higher than the total of a few years ago-—financial critics are predicting cn increase in other forms of taxation this year, notably income tax.