The Daily News. SATURDAY, JUNE 4, 1921. THE FINANCIAL OUTLOOK.

Taranaki Daily News, 4 June 1921, Page 4

The Daily News. SATURDAY, JUNE 4, 1921. THE FINANCIAL OUTLOOK.

That the Dominion is financially sound cannot be disputed, but that it is suffering from a severe strain is equally clear. The closer the figures relating to last year’s revenue are examined the more convincing is the deduction that the people are being squeezed in all directions to provide the necessary funds for carrying on the business of the country. The power to pay is governed by the amount and value of what is produced in the country, so that it is evident to the veriest tyro in money matters that largely increased financial burdens on the one side and a considerable reduction in earning power on the other cannot continue without seriously affecting the soundness of the country. Hence arises the necessity for a thorough overhaul of the position before it gets out of hand. How severely the people of the Dominion are being drained of their resources is evident from the details of last year’s financial operations, which show that, although the expenditure was abnormally high, yet the amount of revenue raised was over six millions more than was required to meet the expenditure. The existence of the unemployed problem is in itself conclusive evidence of decreased earning power and production, and a corresponding decline in the ability of the peopie to meet the heavy burdens imposed on them as direct and indirect taxpayers and users of the services controlled by the Government. Although the Customs receipts last year were more than three and a. half millions greater than for the previous year, and five millions in excess of the figures for 1914, they represent abnormal imports at high prices, all classes of the community, especially the farmers, contributing thereto, but as there is bound to be a large falling off in this revenue during the current year, how is the deficiency to be made up without further increasing taxation or the cost of living? The Post and Telegraph revenue, in spite of a falling off in business, showed an increase of over half a million, but even that proved insufficient to meet the additional expenditure for higher pay. The public naturally expect reductions' in the staff to be made, though this does not appear to have taken place, while the fact that, the higher charges have lessened the business shows that the policy is wrong. The same may be said of the railways, to which the public Had to contribute nearly a million and a quarter more last year, only to find that the expenditure was nearly two millions greater than in the preceding year. It is probable that higher wages and dearer coal and material account for this large rise, and there appear to be good grounds for a thorough revision of this expenditure in view of altered conditions and the lowering of wages in other industries. A similar inflation of expenditure is noticeable in some of the other Departments of the State. For instance, under the vague heading of “other items” there is an increase that approaches a million; Finance nearly half a million; Internal Affairs over a quarter of a million. The facts have to be faced. Unemployment, the fall in the value of produce, and of the public revenue, the dearness of money (which, however much the Premier may try to prevent, is beyond his power), the curtailment of public works and of the activities of public bodies, the continued high cost of living, and the general adverse trend of trade, all point to the imperative necessity for drastic economy in departmental expenditure. It is Gilbertian to fuss over small gitagg, jiimUi as aa -dtobafe

go on the importation of gas stoves, and to let the large matters drift into serious handicaps on the resources of the people. Nor is. it reasonable to persistently preach the gospel of economy and at the same time allow departmental expenditure unlimited soaring space. The people have to make both ends meet as well as the Government. The money spent on imported coal is so much loss to the country, and is a glaring exhibition of economic unsoundness, due to the short-sight-edness and “cussedness” of die miners. Mr. Massey may succeed in raising a loan that will give temporary relief, but it, will neither lower the rate of interest on loans for public purposes nor facilitate borrowing by local bodies. The danger is that instead of facing the present unfavorable conditions and taking wise steps to meet and overcome them, the country may drift into, a position of considerable difficulty, causing industrial unrest instead of activity. At Stratford on Tuesday, a speaker said the dairy industry was the thin thread that was holding New Zealand together at the present time. A far stronger bond is necessary to bear the coming strain, and it is as well that this should be fully recognised by the Government and the people generally.