The Daily News. MONDAY, MARCH 20, 1922. FINANCIAL OPTIMISM.

Taranaki Daily News, 20 March 1922, Page 4

The Daily News. MONDAY, MARCH 20, 1922. FINANCIAL OPTIMISM.

The speech delivered by Mr. Massey recently in the South was a very fair sample of the Premier’s policy of taking an optimistic view of the financial situation in the Dominion. Post-prandial discourses generally fit in with the spirit which actuates most society functions, namely, that of giving pleasure to those present. It is quite evident that Mr. Massey has no predilection in favor of the ancient Egyptian custom of introducing a mummy at a feast. Rather does he favor the Mark Tapley example of being jovial even under the most depressing circumstances. Mr. Massey is entitled to all the credit for presenting a favorable change in the financial barometer, and inducing a glow of pleased anticipation of a return to prosperous times in the near future, yet thoughtful people will hardly be satisfied with his forecast, and, while having every desire to regard the outlook through rose-tinted glasses, will yet fail to feel the warmth.of the financial solar orb until the intervening clouds have be£n actually dispersed and not merely pierced by imagination. When difficulties have to be faced British courage and resource have never yet failed in the long run. Whatever errors of judgment have been committed have only deferred the attainment of the desired goal. It . is the will, to conquer that matters, not the lighthearted attempts to brush aside serious impediments. At the conclusion of his speech the Premier said: “All that is necessary is to hold on and have the assistance of increased production.” It is to be feared there are other and far more essential duties to be performed if, in the near future, the Dominion is to regain its former prosperity and the burdens that are now oppressing all classes are to be relies of the - past. That increased production will be a great factor in restoring normality is perfectly true, but it must not be forgotten that the cost of production must also be lowered, and this cannot be accomplished until the cost of living has been considerably more reduced than has already been the case. This, again, depends on reduced taxation, and that is only possible by the utmost possible economy and sound finance. It is all part of one large complex machine, the motive power of which is supplied by the people, while the greater the re* sistance consequent on the work the machine has to perform, the larger is the demand on the power. Naturally Mr. Massey had to mention the problems of national expenditure and retrenchment, but there was much left unsaid. He told his audience that, in addition to the war debts and interest thereon, the extra payments to the Public Service on account of the cost of living amounted to over four and a half millions. What he failed to explain was why, when these extra payments became necessary, steps were not at once taken to reduce the staffs in every Department in order to lessen the expenditure, as well as to eliminate surplus employees. Had that course been taken immediately after the war the process could have been gradual instead -of drastic, and it Would have prevented tfi-e abnormal rise in the cost of administration. In recognising the value of the recommendations of the Economic Commission, the Premier went on to refer to the unpleasant duties falling on Ministers “before many months had passed.” The only inference to be drawn from that remark is that the economies, about which so much has been said, are still in the future, so that the prospect of reduced taxation is as nebulous as ever. He candidly admitted there were three things to be done—reduce the cost of production, the cost of living, and the cost of Government. The order in which these essentials “are placed should be noted, and it is somewhat remarkable that omission was made of another very important essential—higher prices for produce. It will be seen that Mr. Massey places the reduction of the cost of government last. Probably he was well advised in so doing, for to all appearances that is the last part of the economic machinery which will be adjusted. Nothing is more characteristic of Mr. Massey’s attitude on this matter than his reference to taxation “adjusing itself.” There is a spice of droll humor in his statement that income tax this year will be two

and a half millions less than last year, not because the amount of the has been reduced, but by reason of that “the income is not there to be taxed.” That, he admitted, made the position difficult, but he says it can be overcome, though he omitted to mention how, except to refer to the extra two millions it is expected to obtain through the Customs, so that the question of vanishing incomes is to be remedied by dearer tobacco, spirits and a further raid on the totalisatqr. This may be a spectacular method, yet it will hardly denote prosperity or be a source of consolation to those whose profits leave nothing to tax. No one doubts that the Government needs all the money it can get, but the paramount need of the Government is wise and economic administration enabling taxation to be reduced. There is no doubt as to the soundness of the country. The goods are here, ’but the full value therefor is missing for the time being. No one doubts that we shall win through, but the length of time occupied depends altogether on whether the Government acts wisely and promptly. Optimism can only be justified when it is founded on safe lines, and translated into action. j