The Daily News. WEDNESDAY, JANUARY 28, 1920. REMOVING FINANCIAL ANXIETY.

Taranaki Daily News, 28 January 1920, Page 4

The Daily News. WEDNESDAY, JANUARY 28, 1920. REMOVING FINANCIAL ANXIETY.

"In a few years, we shall be able to look back on our present trials and difficulties as a historical curiosity.'' Such was the opinion expressed by Mr. Austen Chamberlain when speaking at Birmingham recently. When Mr. Chamberlain speaks on financial matters his views must carry weight by virtue of the fact that he occupies the position of Chancellor of the Exchequer, and has an inner knowledge of the factors that are likely to influence the world's finances, and particularly those of Britain. The realisation of the belief quoted above is not expected to be brought about by the wave of a financial wizard's hand, but by adopting a policy of increased exports, decreased imports (except of raw materials), the cessation of borrowing, and the curtailment of public and private expenditure. The Chancellor insists that the first thing for the European nations (and he, doubtless, includes the whole of the British Empire in this category) is to set their own houses in order. It may be taken that he means the national finances must be treated on a business footing—the accounts to show a margin of revenue over expenditure, a national surplus obtained without borrowing. A pre-war British Budget rising to about two hundred million sterling annually was thought to be gigantic and sinister. It was often lamented as though it were a black milestone on the last stretches of the road to ruin. If the League of Nations were crabbed cleverly enough to send Europe and the British Empire drifting into another war and its financial consequences, a later decade or generation might, perhaps, look back with envy even to our present state. Instead of Britain having to face a £200,000,000 Budget, as before the war, she might have to raise £1,000,000,000 annually. It is obvious, however, that this would happen unless some exceptional means are taken to reduce once and for all the permanent burden. That is why Mr. Chamberlain emphasises the need for each nation to put its house in order. That the advice is receiving practical application so far as Britain is concerned is evident from the fact that, for the first half of the current financial year, there was a yawning financial debit to the tune of about £300,000,000. Yet the Chancellor discerns favorable signs in the situation. Trade is very prosperous, and the adverse trade balance is being rapidly reduced. It did not, he said, exceed £150,000,000 for the past twelve months, and he will be disappointed if the new year closed without the deficit being converted into a balance on the other side of the account of 150 millions. The marvellous financial strength of Britain is clearly indicated in the revenue for 1918-19, which.

amounted to 842 millions, taxation producing 782 millions, services (including miscellaneous) 60 millions, the death and estate duties alone producing over 31 millions, income tax 290-J- millions and excess profits tax 300 millions. These figures indicate that, so far as revenue is concerned, there is ample available,to readjust the balance-sheet if expenditure is drastically curtailed and borrowing avoided. On this point Mr. Chamberlain is also optimistic. He believes the national debt has reached its maximum and, once the corner is turned, which he believed would be in the next financial year, it would be the duty of the Government to consider the funding of the large existing floating debts, thus removing from commercial and financial centres the cloud of anxiety which at present rested on them. This cloud rests also on New Zealand, in spite of her marvellous prosperity. The Minister of Finance of the Dominion cannot say, as did Mr. Chamberlain, that he believes the National debt has reached its maximum, for the Government's programme during the next five or ten years involves the borrowing of many millions. The country can afford to borrow —it cannot avoid doing so—but the time has arrived when it is necessary to put New Zealand's house in order financially. There is no need to worry over the revenue side of the account, except to readjust the incidence of taxation. It is the expenditure side that really matters, and all parties in the House should bring their wits to bear on retrenchment —not cheeseparing, but waste-pre-venting, diverting money into channels that will be of real benefit, and setting an example to all classes of the community.