Wairarapa Times-Age FRIDAY, AUGUST 5, 1938. OUR NATIONAL FINANCES.

Wairarapa Times-Age, 5 August 1938, Page 4

Wairarapa Times-Age FRIDAY, AUGUST 5, 1938. OUR NATIONAL FINANCES.

ALTHOUGH it has run to a great many words, the Financial Debate in the House of Representatives has produced comparatively little as yet in the way of methodical discussion of the national finances. With the party bickering that always figures as padding’ in debates of the kind, a large proportion, of the members who have spoken thus far have been content to talk in rather general terms about opposed principles of policy, or to dilate on particular aspects of policy. Since a Budget debate ought to be primarily a searching criticism of the financial administration of,; the Government of the day and a defence of that administration in detail, the debate recovered something of its true character with the speech delivered in the House on Wednesday evening by the Rt Hon J. G. Coates and the reply made on behalf of the Government by the Hoin W. E. Parry. ■ The initiative on occasions of this kind inevitably is rather with the critics than with those who are concerned chiefly to defend what has been done and people who are prepared to take an unprejudiced view of the management of our national affairs, even if they do not agree with Mr Coates in all that he advanced, may be able very easily to agree that he raised a number of questions which call for careful consideration and a more extended and detailed reply than was made by the Minister of Internal Affairs. One of Mr Coates’s leading contentions was that but for the raiding of the Employment Fund in meeting both departmental charges, the Budget would have shown a heavy deficit instead of a small estimated surplus. " The position in a nutshell (the member for Kaipara declared) is that the Minister is raiding the Employment Promotion Fund to the extent of £1,328,500, and in addition is financing maintenance out of loan moneys.. If the Budget had been drawn up in accordance with accepted practice-, the Minister’s estimated surplus of £58,000 would have turned into a deficit of something like £1,500,000. That would be the true position.... It will be interesting to see what reply the Minister of Finance (the Hon W. Nash) has to make to this criticism when he speaks at the end of the Financial Debate. . An explanation of the transfers from the Employment Fund to the Public Works Department and other Departments itemised by Mr Coates is the more demanded since resources have, here been drawn upon which will not be available in future. Under the Government’s plans, the emergency taxation upon wages and other income, now ostensibly earmarked for the relief of unemployment, is to be replaced by a social security tax. The primary duty of the Finance Minister is to show that the country is not being burdened unjustifiably, or in a manner to endanger its future financial stability and prosperity. In discharging- that duty, Mr Nash may be expected not only to repel, if he can, Mr Coates’s contention that the Employment Fund has been raided to build up an imaginary or unwarranted surplus—unwarranted because, on the face of it there is something to be said for the view that if the emergency tax on wages and other income is not needed for the purpose for which it was imposed it should have been reduced or remitted—but to deal frankly with other aspects of the position. It is denied emphatically by the Government that any element of strain enters into the present adjustment of our national finances, but the simple and established facts of the position are definitely calculated to alarm people who have no other thought than to examine these facts without prejudice and are very little interested in party wrangling. For example, although an appreciable falling off is anticipated in the yield from some leading iteihs of revenue, notably Customs and sales tax, the estimated total expenditure for the current year exceeds last year’s actual expenditure of approximately £35,250,000 by some £338,000. All existing taxation remains unreduced —even the sales tax which was condemned root and branch by members of the present Government before it took office. For next year, under the Government’s plans, there is raised the prospect of heavy additional expenditure on social security, over and above the special tax of Is in the pound, which in itself is a fifty per cent increase on the unemployment tax at its present level. A good many people will be anxious to hear what the Finance Minister has to say about these facts and their implications when he speaks at the end of the Financial Debate.

ON BEING BLAMED BOTH WAYS.

QN the burning question of the adequate peopling and development of the Dominion, it. is possible to sympathise with a complaint made by the Prime Minister in the course of the tour of Canterbury which he has just completed. We have been accused of buying too freely in London (Mr Savage observed) and also of not buying enough. Whatever we do, we get the blame for doing wrong. This is perfectly true. Where its possible plans of industrial development and expansion are concerned, New Zealand at present is under a fire of criticism from opposite extremes. In itself, this implies that there is a safe middle course to be pursued, but that course needs to be plotted clearly and intelligibly, so that an end may be made of conditions in which virtually any and every proposal to extend or expand secondary industries in this country is denounced as a matter of course by some more or less influential people. Our external markets are definitely limited and if the Dominion is to build up a bigger population it must expand its internal production and exchange. A practical understanding is needed as to the broad Tines on which this necessary development ought to proceed. A reasonable basis will then be provided for a policy of vigorous and methodical enterprise. At present we are in. the position of attempting to build on an impossible foundation of shifting and uncertain opinion.