The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo. FINANCE AND DEBT.

Auckland Star, Volume LVII, Issue 161, 9 July 1926, Page 6

The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo.

FINANCE AND DEBT.

For the cause that lacks assistance. For the tcrong that needs resistance. For the future m the distance. And the good that we can do

FRIDAY, JULY 0. 1026

It was made clear in the GovernorGeneral'e Speech at the opening of Parliament that the country could expect no remission of taxation, despite the handsome surplus accumulated last year and the great increase in the receipts from Customs taxation. The Budget, thus anticipated, laid before the House last night confirms the Government's lapse from its declared policy of continued remissions of taxation simultaneously with more economic administration. The scrapping of both these obligations by the Government is possible because with its huge majority it can effectively stifle an} - attempt on the part of the House to force its hand. The reason advanced for the refusal to reduce the heavy drain upon the pockete of the community is that last year's increase was accounted for to a great extent by an unexpected and unstable increase in the Customs duties. That may not recur this year, but year after year the same timidity is apparent, taxation is maintained at a high level in fear that the accounts will not balance— yet each y?ar finds its soothing surplus. It may be very satisfactory to the Minister of Finance to find that he lias extracted from the public a great deal more than was essential for carrying on the services of the Dominion, but when taxation is maintained for all practical purposes at war rates the system is a pernicious one, and a little more judgment as to the income and expenditure should be exercised. In this period of reconstruction it is essential that industry should be hampered as little ac possible by reduction of the amount available for expansion. Doubtless it is easier for the Government to play the part of Shylock on a large scale rather than to practise the economy which is in point of fact the prime essential. The Departmental figures and the increase of expenditure. £1,807,466, indicate how easy it is, when impressive surpluses are paraded, to find new avenues for disbursing public moneys which would be far better employed in increasing the productivity of the Dominion through the ordinary channels of trade. Instead of basing the rate of taxation upon estimates which invariably prove far too low, it would be better if the Minister displayed sound judgment in assessing the probable income and balanced his Budget upon his real resources, thue reducing the call upon the people. In a manner more picturesque than satisfying Mr. Stewart compares present taxation with the present money value of the taxation of 1013-14, but even upon this favourable basis he discloses a per capita increase, despite a greatly augmented population, of £4 1/10 per head. War taxation accounts for £3 13/3 of this, but that still leaves a very handsome balance upon which the pruning knife could be effectively used. The economy committee to inquire into departmental expenditure consisted entirely of departmental heads, and judged by results they were not able to make any very effective recommendations. There seems to be

some necessity for co-opting business men to assist in cutting the ' knots

of red tape which cumber the departments, and by this means it is probable that great reductions could be made in general administration. The very satisfactory results which have followed the application of business methods to its railways, should have satisfied the Government of the necessity for extend-

ing the system. It is of no use to talk of "getting things done" unless some effort is made to get them done with efficiency and at a minimum cost. The enormous increase in the Public Debt, £11,000,000, during the year is

far beyond any past accretion, ana will cause misgivings, especially as it follows a loan of £7,000,000 in the

previous year. True over six millions goes to State Advances, but that does not alter the fact that the per capita annual charges upon the. Dominion have been increased by ten shillings, and that the loan raising operations mean that goods and services to the amount named have come, or must yet come, into the country, because there is no other way in which loan money can be brought out here. New Zealand cannot continue to borrow at this rate. Already the net annual charges upon our loans total nearly £10,00,000, and even though sinking funds designed to extinguish the debt in sixty years are provided the annual drain upon the country's resources is beyond all reason, especially as less than half the debt is held within the Dominion. loans are necessary for development, but it must not be forgotten that they become an immediate charge, and that if unlimited addition is to continue at the present ruinous rate, the cost of meeting the interest bills will be more than the country can stand.