Taranaki Daily News. MONDAY, SEPTEMBER 8, 1919. THE FINANCIAL OUTLOOK.

Taranaki Daily News, 8 September 1919, Page 4

Taranaki Daily News. MONDAY, SEPTEMBER 8, 1919. THE FINANCIAL OUTLOOK.

We have become quite accustomed to talking lightly about millions in connection with expenditure, so that the passing of the Discharged Soldiers' Settlement Loan Bill, involving' between sixteen and seventeen millions in no way impresses the people of the Dominion as being anything abnormal. The country is exceptionally prosperous, yet no.thoughtful person can avoid looking ahead with concern at the extent of the req- "cements of the Government that will during the next decade have to be met by borrowed money. Anyone who takes the trouble to estimate the amount of capital needed to carry out the proposals in Sir Joseph Ward's manifesto and in the report of the Parliamentary Industries Committee cannot avoid wondering where' the money is t'i come from, especially in view of the heavy taxation that is inevitable, and the high cost of living that is in some measure remediable. It may be taken for granted that, for some years to come, borrowing on the London market will be out of the and the Dominion will have t<? rely on ;its accumulated and current wealth for supplying the Govern-1 ment with loan money. The question is one that may well be considered in all its bearings so that the national coat may be cut according to the available cloth. There are at present two large loans to be raised—one for ten millions, the balance of the war loan authorised last year, which is now being raised, the other being the soldiers' settlement loan that will presumably be spread over some years. At the same time provision must be made for a large expenditure on public works hydro-electric power, housing, education, and the developing of the Dominion's resources. It is quite possible that if the proposed State Bank is to materialise, the coal mines to be nationalised, and a State merchant fleet provided, the capital required will also have to be raised on loan, and it is prudent to face the position not only as to whether all the money can be found in the country, but what the effect will be on the value of New Zealand's securities that have already been pledged. An incidental query is that as to the effect on the rate of exchange, which is already unfavorable to the whole of the British Empire. That it is quite within the power of this country to provide the loans at hand and in sight is not doubted, especially as a fair proportion will be revenue producing and self-ex-tinguishing through sinking funds. It.will mean the utilisation to the best advantage of all money under the control of the State Departments, including the Post Office Savings Bank, the creation of Government stocks and resort to various financial schemes for attracting money to the Treasury: also it will mean the exercise of great thrift and the highest measure of industry and economy—especially in administration expenses—in order that greater production shall be accompanied by increased savings. We cannot look for any material decrease in taxation, but a readjustment of its incidence On an intelligent and just basis should be one of the first, tasks of the new Parliament, accompanied by a revaluation of

neither the State nor the local bodies can any longer afford to ] suffer the large loss of revenue due to the existing valuations, I while the sliding scale of taxation may advantageously be extended so as to place the brunt of the burden on the shoulders of those best able to bear it. At no time in the history of the Dominion has there been such an urgent need for bold, sound and resourceful finance as at the present juncture. It would be sheer madness to tinker with such a vital matter, or to conjure from one pocket merely to fill the other. Few people realise the full bearings of this problem, or have any conception of its intricacies. The next five or ten years will be a -.crucial time that will test the solidity of the country. To emerge with added stability and prosperity is well within the power of the people, but to accomplish this there must be an intense development of the resources of the country, a'bending to the work of greater production, the exercise of self denial, and the passing of wise legislation that will assist in the task of reconstruction. All money judiciously speut in this connection will bear fruit directly or indirectly, but whether success is achieved will depend on how the policy of the Government* is co-ordinated so as to fit in with the pressing needs of the time. Money is the pivot on which the position rests. New Zealand can be relied on to find the money. The duty of the moment is to subscribe to the Victory Loan, to regard it as an obligation cast on all, being just as essential as was the sending of men to help in the defeat of the enemy. The success of this loan is an essential preliminary to reconstruction, and it can cmly be assured by all doing his or her "bit".