BALANCING THE BUDGET

Auckland Star, Volume LX, Issue 105, 6 May 1929, Page 11

BALANCING THE BUDGET

TO MEET DEFICIENCY. ADJUSTMENT OF TAXATION. WORK ON LONG RAILWAYS. NO NEW WORK ON SHORT LINES. (Br Telegraph.—Press Association.) HAWERA, Saturday. Adjustment of taxation to secure more revenue from "certain quarters," alteration in the system of railway accounts and a declaration that the railways proposed by the Government would pay interest on the expenditure were the principal points of a speech made by the Prime Minister this evening in acknowledging a civic reception. The meeting was held in the winter show hall, which was packed to overflowing by an enthusiastic crowd of about 1000 people. After acknowledging the welcome expressed by the Mayor, Mr. E. A. Pacey, and others, the Prime Minister proceeded to discuss political questions, paying particular attention to the Budget and railways. He referred to the recent announcement that the revenue for the year just ended would be about £550,000 short of the amount required to balance the account. "That is not sufficiently large to cause any serious alarm regarding property or business," said the Prime Minister, "but it is big enough to indicate that the conditions giving rise to jt cannot be allowed to continue. I hope to be able to place before Parliament in the coming session proposals •svhich will bring about the remedy." Adjustment of Taxation. There would have to be an adjustment of taxation, it being essential to secure more revenue than'had formerly accrued from certain quarters. No country could claim it was in a satisfactory condition when the financial balance was on the wrong side, and an adjustment of the Dominion's finances was the mission on which he was at present engaged. Customs taxation was between £300,000 and £400,000, and income tax between £60,000 and £70,000 short. As a primary producing country New Zealand was bound to look principally to the land for its prosperity and in a small holdings settlement scheme, together with careful regulation of immigration, lay the solution of the unemployment problem. Railway Construction Policy. The Government had stated it, would go ahead with work on long railways, but it would not consent to expenditure on short lengths, which, he contended, could not hope to compete with motor services. On such lines as the Taranaki to Auckland, Napier to Gisborne, South Island Main Trunk and Westport to Nelson the Government was prepared to incur expenditure, as they would pay interest on the expenditure. Side by side with land settlement the Government wanted to complete the long-distance railways, but it would stop for ever short fragmentary lines which were a burden on the country. Last year the losses oh the smaller lines entailed £770,000. This was a direct charge against the Consolidated fund, and had been largely responsible for the Budget deficit. But for that charge there would not have been a delicit. During next session he proposed to ask Parliament to adjust the system of railway accounts so as to do away with that system. Checking Unnecessary Expenditure. The .stopping of the Palmerston North deviation was one direction in which the Government was endeavouring to check unnecessary expenditure, but that amount involved was trivial in comparison with the los 3on small lines. The Palmerston deviation was stopped because the Government believed it was not wanted. The Government would also stop any other work concerning which a similar conviction was held. Also, he and his colleagues believed the Rotorua-Taupo line should never have been started. The policy of the Government was that it would not undertake any railway work which w r ould not return at least interest on the capital outlay. "Millions and millions and millions are being borrowed every year," said Sir Joseph Ward. "'Millions and millions and millions are being expended every year, and some of it is being thrown away every year. What we to do now is to ask the members of Parliament to share with us the responsibility of focussing and limiting the expenditure of these millions that are not required, at the same time pushing the country on at a reasonable speed, yet keeping the safety valve on." Referring to the 84 miles of line required to link the South Island Main Trunk railway to Picton, Sir Joseph Ward said it would allow a saving of hours on through passages from the extremities of both islands, as a more direct connection would be afforded in crossing Cook Strait. He believed the completion of the line to Picton, with its facilities for through traffic, would prove in the best interests of the country, just as through services between the principal centres in the North Island had been.