The Daily News WEDNESDAY, OCTOBER II), 19-21. REDUCING TAXATION.

Taranaki Daily News, 19 October 1921, Page 4

The Daily News WEDNESDAY, OCTOBER II), 19-21. REDUCING TAXATION.

The recent statement by Mr. Massey that “the principal business of Parliament will be the reduction of taxation” indicates that the economic position of the Dominion is exercising the attention of the Government, and well it may. This is no question of optimism or pessimism, but of stern necessity. What the community has long been looking for is that the position shall be faced in a spirit of courage, determination and wisdom, for the problem is one that is affecting the greater part of the civilised world. So far as New Zealand is concerned as a producing country, although in some directions there is plenty of room for improvement, yet, 1 on the whole, there is little,. if any, cause for anxiety other than making the revenue and expenditure come out on the right side. At present the position in' this respect is far from satisfactory. If the figures for the first five months of the current financial year are noted it will be seen that the Consolidated Fund is out of gear and urgently needs an overhaul. The figures are: Expenditure ,£12,340,042 Revenue 7,849,196

Deficit £4,490,846 as compared with an expenditure in the corresponding period of the previous year of £10,274,099, an income of £9,169,616, and a deficit of £1,104,483. While, therefore, in the present year the revenue is £1,320,420 less than in 1920, the expenditure is £2,065,943 greater, so that the Consolidated Fund is in a worse position to the extent of £3,386,363 than at the same period last year. That departmental expenditure is mainly responsible for this large increase, and not special outgoings connected with loans and pensions, is evident from the fact that it increased by £1,610,278 over the cost for the first five months last year, notwithstanding that the public was led to expect a decrease owing to the institution of economies. With an excess expenditure of four and a half millions there is ample room and urgency for the application of the pruning knife, and it is the duty of members of Parliament, irrespective of; party, to see that the process is on a scale that will not. only enable the dpficit to be made Up, but permit of the reduction of taxation. If, as Mr. Massey claimed, the Dominion has scarcely been affected by the trade slump that Britain has experienced, then it is evident the 'Consolidated Fund should show a surplus and not a deficit, but the unjustified and intolerable soaring of departmental expenses demands effective treatment. Mr. Massey has stated that salaries and wages have been reduced by £907,041 ; that the abolition of the subsidy on butter and the reduction of the subsidy on floiir will save £646,093; that by using ordinary revenue, instead of borrowing, £888,750 has been saved, and by demobilising defence officials the expenditure has been reduced by £240,000. When the full effect of these economies will be felt is not quite clear, but it is satisfactory to know that the cutting down process has commenced, though the deficit of four and a half millions still stands out uncannily. In following the line of least resistance hitherto the Government has simply ma.de the public pay more for nationalised services wherever possible. Railway fares and freights were increased, but still the expenditure exceeds the revenue, and if the Consolidated Fund is to be relieved of contributing to the railways they must earn a million and threequarters more than they are. doing now. The Post and Telegraph Department not earn interest on capital cost; the profit made by the Public Trust Office last year was only ten thousand pounds as compared with seventy-eight thousand in the preceding year, while the Printing Office earned a profit of only two thousand as against nine thousand. According to a statement appearing in the Public Service Journal, there has in the last eight years been an increase in the staffs of the Departments under the control of the Commission (outside the Railways and Post Office) of 2101, while the additional expense for salaries was £l,026,011. It is worthy of note the Public Service Commission in last year’s report referred to the tendency of staffs to expand beyond any visible increase in the quantity of work to be performed. Such an admission implies that the Commissioner is not free from blame and seems to raise the question as to whether some other system of control has not become necessary in the interests of the taxpayers, who are being heavily penalised by the burden of the cost of administration and the employment of fifty-one thousand persons to do the work. The fig- j urea quoted by the Public Service

Journal cover only <nm eighth of the total army of Govrrnmftid employees, out of which, in right years, the permanent offieerw ros« by forty-five per eenf.., arid the pay sheet by one hundred and rryep teen per cent. What of the re maining seven-eighths? Under these circumstances the prospect of a reduction of taxation doc« not seem very promising. In fact it is out of the question unless the new tariff is going Io be as oppress sive as the present taxation, or departmental expenditure is heavily reduced. Mr. Massey has .stated that he prefers to tell the House what he has done rather than what he is going to do. So long as the people are represented in Parliament it is for the members of the House to decide what the Government shall and shall not do, and on this question of economy, as well as in reducing taxation, our legislators are faced with a duty that is as plain as it is urgent.