THE FINANCIAL STRINGENCY.

Taranaki Daily News, 6 August 1921, Page 11

THE FINANCIAL STRINGENCY.

i CAN WE IMPROVE ITT j - (Contributed by the New Zealand Welfare League.) Though the main causes of the financial depression* are beyond our control, in so far as we are adversely affected by conditions obtaining abroad, we can undoubtedly modify the position locally. We have in previous articles attempted to outline the general causes which have brought about the present position, and we propose now to discuss, in a general way, the best protective measures I and financial policy to give us relief in • this country. We, like the whole Empire, are faced with the problem of adjusting our economic and financial system to an entirely different set or conditions to those obtaining before the war. We need careful enquiry, clear thinking and bold decision, but as a basis we must have a firm conviction that if we are true to our country our future is assured. Tb sit still and wait j is no use whatever. | ENTERPRISE AND WORK.

One of the results of the war has been a complete change in the trade equilibrium. •' The coal position in England may result in her taking a lower place •a the manufacturing world; other nations to whom the war gave unique opportunities to establish industries and capture markets for manufactured goods have now entered into competition and international rivalry is bound to be intense.

It is a time for sound enterprise, public economy and hard work, and the country which "slacks” is doomed. Yet, it is a curious outcome of the war that large sections of the people seem to be permeated with the idea that they can lead more comfortable lives and do less work than they did before One has only to look at any of our occupations and see that the "output” per man has decreased alarmingly in spite of higher pay. The result is that the services rendered cost far 1 more than the increased payment warrants, and being "passed on” to the consumer adds to his burden at a time when he has almost more than he can carry to pay for the war. This is what is happening in the Old Country and most of the Empire, and is largely due to lack of knowledge in the elements of economies and the mischievous teaching of 1 the Socialist leaders whose aim is to destry our whole constitution. Impoverished and burdened as we are by the war end our own improvidence, we must, if wo wish to relieve the position, work together, 1 get busy, drop every kind of loafing and thus cheapen the "out- : put.” We have seen it argued that the present unemployment and financial stringency is due to over production—we differ with this view—as we believe that facts point tn the hoarding of produce by the Government at Home *o ' avoid loss combined with the diminished spending of consumers abroad (due •to the mischievous strikes and stopnafres of industry) as having caused ’the present fall *n export prices which has hit New .Zealand so hard. When, however. it comes to coal, (houses and other products of enterprise locally, there is no doubt the decreased efficiency combined with increased cost has placed a burden on the community beyond calculation. This is obvious to any who thinks. The evil grows as it progresses, i restricted output, combined with high I payment for services, increases the coat, this curtails the consumption by lessening the demand, resulting in hampering the industry and unemployment.

ECONOMY. Roth public and private expenditure may well cause the alarm which has been repeatedly voiced by many of our leading citizens and by this League during the last twelve months, yet though it vitally affects the financial position of the country and every one in it. no warning was taken to meet the slump which was obviously coming and even now the repeated advice of men who know, appears to fall on deaf ears. Government, municipal and private waste and expenditure still obtains at a t-me when (to quote the president of the Wellington Chamber of Commerce) “the instinct of self-preservation” should rouse Government and the public to curtail unnecessary expenditure. We do not advocate the curtailment of all expenditure but urge tha, it be limited to propositions of a productive nature 'to cut out frills and non-essentials, to concentrate on things that really matter is, in our opinion, essential. Hits applies to employers as well as employees, it implies co-operation in big things in place of the constant squabbling over little things which has been so prevalent during the last few years and has done so much, to aggravate our present troubles.

TAXATION AND LEGISLATION. There is room and vital necessity for a complete overhaul of the Incidence of taxation. It has reached such alarming proportions that industry and enterprise arc being hampered. President Harding addressing the Senate on July 12th, is reported to have said, “It is unthinkable to expect a business revival while maintaing excessive taxes.” In this country it is not only the amount of taxation but the inequitable distribution of the burden that is handieappmi* the development of our resource*. We admit that taxation is necessary to carry on. but it should be made in such a way that enterprise is not hampered. This is too large a matter to discuss at present but. as stated earlier in this article, we have to face new economic conditions, and we should like to see the most careful enquiry by the best available experts with a view to a bold revision of the whole incidence of taxation and the best way to conserve available resources so as to avoid any risk of increased burdens. It should at the same time be seriously considered by Parliament whether the time has come when they should modify rgulations and legislation which prevent the normal movements of capital and which, by artificial controls and subsidies, interfere with the natural laws of supply and demand. No consideration of political expediency should stand in the way of such national needs.