BRIDGING GAP.

Auckland Star, Volume LXII, Issue 38, 14 February 1931, Page 10

BRIDGING GAP.

SEARCH FOR REVENUE.

MEANS OF ECONOMY.

INCREASES IN TAXATION.

POSTAL RATES HIGHER.

Some of the directions in •which the Government will seek to overcome the Budget deficit are outlined. Reductions in salaries- and wages are calculated to provide £1,500,000, comprising the savings from the reductions in the salaries and wages of the general public services, including teachers, together with the benefit from similar reductions to he made in the railway and postal services and also from the reduction in the amount of subsidies payable to local bodies. As a result of the work of the economy committee it is expected that further substantial reductions can be made in the expenditure of the Consolidated Fund and 'the railways, apart from the proposed all-round wages cut. ' The Education Bill. A special committee will be set up to investigate the expenditure on education, which is at present costing the Dominion about £4,500,000 annually— too heavy a burden on taxation under present economic conditions. It is hoped that ways will be found of making large savings without lowering the standard of education. It is further proposed to utilise for the next year or two the reparation money received from. Germany for repayment of the public debt, instead of applying them exclusively to war debt reduction. ' Taxation Increases. The reduction in expenditure apart from salaries and wages and other adjustments referred to is estimated to improve the position of the Consolidated Fund by £1,250,000. It is proposed to obtain further assistance by increasing the postal rates to provide additional revenue estimated at £900,000 a year. The Prime Minister considers it preferable to increase' postage rates under present circumstances than to impose heavy increases in taxation in other directions and thus hinder to a much greater extent the revival of business. At the same time some increases in general taxation will be necessary. Income tax will provide a portion, but detailed proposals, or an amended schedule of rates have not yet been worked out. Furthermore, it is quite probable that 6ome increases will have to be made indirectly, although these will be kept as low as possible so as not to increase the cost of living and the* working costs of the primary producer and business generally. Summed up, the proposals to meet the shortage are:—Reductions in salaries and. wages, £1,500,000; reductions in other expenditure and financial adjustments, £1,250,000; increase in postage rates, £900,000; additional taxation (direct and indirect), £850,000; total, £4,500,000. ' Combined Eifort Required. The Prime Minister points out that the drastic n Measures proposed, while designed to balance the Budget, aim also at solving the wider economic problems on which the maintenance of Budgetary equilibrium depends. The Government will not hesitate to do what it considers is in the best interests of the Dominion and, given the support of all sections of the community, it should not be long before the economic machinery is back into good working order. Mr. Forbes concludes: "Our difficulties are great. . . But all that is required is a combined effort throughout the length and breadth of the land, and 1; confidently appeal to the other political parties and to the whole community for support and cooperation in carrying through the programme that I have outlined for again placing the Dominion on the high road to prosperity and better times."