ECONOMY COMMISSION.

Auckland Star, Volume LXIII, Issue 27, 2 February 1932, Page 10

ECONOMY COMMISSION.

FIRST MEETING TO-MORROW. CONSTITUTION CRITICISED. ABSENCE OF ECONOMISTS. The Economy Commission, of which Mr. George Shirtcliffe, of Wellington, is chairman, intends holding a preliminary meeting to-morrow morning in Wellington. It is understood that several days will be occupied in preparation of lines of investigation, as the order of reference is extremely wide. Proceedings are to be in private, so that the iirst indication of the results will be the publication of the interim report, which the Goverinment has requested by March 1. "Ordinary Methods" Inadequate. The non-inclusion of trained economists in the personnel of the commission is criticised by Professor D. E. Copland, dean of the faculty of commerce at Melbourne University. "The more the public finances are examined, the more obvious it will become that the ordinary methods of economy will not balance the Budget," said Professor Copland. "It is, of course, most important that these methods should be exploited to the full, and a much more rigorous standard of economy adopted than was thought necessary a few months ago. In Australia we had the example of a 20 per cent cut in the Commonwealth basic wage, but in fact most Governments have reduced their expenditures by more than 20 per cent. "Unless considerable savings can be made in fixed charges and permanent appropriations, the relief to be obtained from economies will not be sufficient to balance the Budget. The reason is to be found in the decline of the national income, involving still further reductions in revenue. "Problems Highly Technical." "The problem centres upon the volume and value of the national income, and this is in part dependent upon the level of export prices in New Zealand currency and the maintenance of export production which is now threatened by a tremendous weight of internal costs. The balancing of the Budget, therefore, becomes a problem of the restoration of sound conditions in the import trade, which naturally depend upon bridging the gap between costs ana returns. A reduction in the money value of costs ii not sufficient, because this may not even compensate producers for the reduction in the money value of their produce. "Real costs must be reduced, and this is a task which cannot be easily accomplished with' low export prices in New Zealand currency. The problems involved are highly technical, and demand the combined attention of the trained economist and the practical man. It is unfortunate that the newly-appointed Economy Commission has not been constituted in this way." Prime Minister's Reply. The views, expressed by Professor Copland were brought to the notice of the Prime Minister, the Rt. Hon. G. W. Forbes, who made a brief reply. "The commission," said Mr. Forbes, "has power to call economists to give evidence before it, and I have no doubt it will avail itself of the opportunity to hear their views."