The Daily News. FRIDAY, OCTOBER 31, 1919. NATIONAL ECONOMY.

Taranaki Daily News, 31 October 1919, Page 4

The Daily News. FRIDAY, OCTOBER 31, 1919. NATIONAL ECONOMY.

The inevitable reaction after the enormous war expenditure is indicated by the insistent demand for economy, and the result of the persistent pressure on the Home Government has galvanised the Premier into action. He has thrown himself, with all his wonderful energy, into the work of cutting down expenditure. 1 .Popular opinion may at times be 'attributed to the impulse of the moment, but in the main it is instinctively sound, and no Government which holds sway in a democratic country can hope to continue in office if it flouts the will of the people. Eeal economy is no mere matter of panic Government repentance or of Treasury reorganisation. The roots of the evil go deep and will not be eradicated, as a recent writer lias claimed, "by a campaign against surface growths, any more than a lawn can be purged of dandelions by cutting off their tops." Economy in a self-governing country is the fruit of a careful balancing of expenditure and parsimony. The war has necessitated large borrowing, and that has eaused an ever increasing inflation of prices of commodities, and if inflation is to continue and increase, then the evils of inflation will also continue and increase. The broadest of all foundational truths regarding the production and distribution of wealth is, as Professor Nicholson states, that unless you secure to people the fruits of their economic efforts, those efforts will not be forthcoming, or not to the same extent, or not to the extent required for national welfare. It is essential we should realise that the wastes of war can only be made good by hard work, and not by soft money. Just now what we want to get hold of is not so much special measures as great lines of economic policy, which will be followed by the stable elements of society. There must be a reversion to pre-war methods of larger production with narrower margin of profits, instead of a continuance of the huge profits that grew up during war time. If social reforms are to be carried out over a term of years, the range of prices must be kept down, and the first condition of a check in the rise of prices is the restoration of the balance of revenue and expenditure. If new expenses are to be incurred somebody must have the courage to reduce old expenses. If more is to be spent on providing houses for the people, then less must be spent on the armies of bureaucracy, and a system of rationing adopted in the expenditure of public money. The problem as it concerns the Dominion is as nothing compared to what it has become in Britain, where it assumes gigantic proportions. It was recently stated by Sir Eric Geddes that a Financial Committee of the Cabinet, with Mr. Lloyd George as chairman, had achieved enormous results in cutting down expenditure. The public insisted in the belief that there was an immense redundancy of personnel in Government offices. The Premier hearkened to the outcry and set about the reorganisation of the Treasury, and if economy is to be enforced wholesale the Treasury must be the main lever, especially in the matter of checking departmental outgoings. Mr. Lloyd George sent a severe letter to the heads of all the spending departments, exhorting economy, the bringing back of the establishment to normal strength. and the results achieved justified

his action. Too often tke Treasury! lias a tendency to be rigid in its resistance to new calls on the finances of the country, yet complaisant to established outgoings in their broadest forms, and niggling about details. "War exigencies have undoubtedly had a demoralising effect on departmental expenditure. It was an upheaval in which the greatest difficulty was to retain the sense of proportion, and we are suffering from this malady to-day. In the Dominion, as well as in Britain, there is needed acutely a close supervision of the chief heads of departmental expenditure and a drastic application of the pruning knife to the staffing. There was some excuse for waste during the war, and that is why effective economy should be carried out in every possible direction now. The various departments should be adequately manned, but so that each public servant is as fully employed as if he> were under the eye of a private employer. It has been advocated, in relation to the Government departments in Britain, that there should be a Treasury official of high grade, directly responsible to the Chancellor and free from departmental control, to maintain a continuous and searching survey of all proposals for expenditure and to be regularly consulted before any important decision is arrived at by the Minister. The real guardian of public economy is Parliament, and, while the Dominion might benefit from a finance supervisor, it is to Parliament that the people should look to safeguard the finances of the State, and they should select such representatives as can be relied upon to make parliamentary control a reality, and not a sham.