The Daily News. TUESDAY, NOVEMBER 8, 1921. THE COUNTRY’S FINANCES.

Taranaki Daily News, 8 November 1921, Page 4

The Daily News. TUESDAY, NOVEMBER 8, 1921. THE COUNTRY’S FINANCES.

To a deputation of business men which waited upon him last week, the Premier stated he had already made substantial economies in the cost of running the departments, and had not yet finished his work, but added that it will take two years to give effect to all his proposals for retrenchment. Even his friends cj”?not look other than with gn.. e concern upon this statement, and upon the trend of Government expenditure generally. For the first half of the current financial year the revenue totalled £10,194,864, as compared with £12,111,190 in the corresponding six montl*: of 1920, showing a decrease of £1,916,326. On the other hand the expenditure exhibited a big increase, totalling. £14,258,148, as compared with £12,588,986 for the same period of the previous year, an increase of £l,669,162. In plain words, the finances have gone to the bad by £3,585,488 in the half-year as compared with the corresponding half of last year. Mr. Massey claims to have made substantial “cuts” in expenditure, but making all allowance for the fact that the full results of his economies have not yet been shown, the position revealed. by the accounts is a disquieting one. Revenue and expenditure must balance if we are to maintain our credit and keep our good name. Revenue is likely to be less rather than more. In the Budget, Mr. Massey estimates the total revenue as £28,000,000. We have seen that the revenue for the first six months was only a Tittle over ten millions, leaving eighteen millions to come in before March 31. Generally most of the revenue is received in the second half of the year,, because the income tax is collected then, but the income tax will not figure this year so very largely, for obvious reasons. We therefore think the Minister for Finance is over sanguine in his estimates. The grave feature, however, is the expenditure. It will have been noticed that the Premier does not expect to reduce the expenditure very substantially. He estimates it at £29,266,367, which is a little more than the rate of expenditure during the first part of the year. It is highly undesirable to continue the present high taxation, which must be reduced if the industry, and commerce of the country are to be re-established and unemployment is to disappear. Mr. Massey, in the Budget, speaks of revising the whole system of taxation and of giving relief where it is most urgently required, but one may look in vain in his Statement for any concrete or definite proposal to that desirable end. He is optimistic throughout, but we are entitled to more than optimism just now. We want action, resolute and thorough, in the direction of cutting down national expenditure, which has grown abnormally, despite the stringency of the times, and the fact that less busi-, ness is being transacted by the various departments. Indeed, the tendency of late has been for expenditure to increase whilst the revenue decreases. In a private business this movement would immediately be arrested, for the obvious reason that otherwise bankruptcy would quickly result. New Zealand can no more trifle with ignore business principles with impunity than can a private firm. To say that economy can only be given effect to fully in 1923 is playing with the subject. The country wants economy now, not in 1923, and also wants a substantial reduction in taxation now, and not in 1923. If Mr. Massey cannot do this, then he should call to his aid the best business brains of the country, which would gladly be put at his disposal. This is not a party question at all; it is a national question of the greatest importance and urgency. As the Auckland Herald, Mr. Massey’s foremost newspaper supporter, so pointedly says:— ‘Tn its Financial Statement the Government has missed a golden opportunity for convincing the country That it is capable of bringing order out of financial chaos. Unless it redeems it« renutation by making a sep-

arate statement on economy the duty j will devolve upon member® of the Re- t form Party in the House of forcing I it to reveal -its programme regardless of political consequences. The fate of any Administration is a small matter compared with the solvency of the State, and nothing less than that is at stake in New Zealand to-day.”