THe Auckland Star. WITH WHICH ARE INCORPORATED The Evening News, Morning News, The Echo and The Sun. THURSDAY, FEBRUARY 4, 1937. THE STATE'S ACCOUNTS.

Auckland Star, Volume LXVIII, Issue 29, 4 February 1937, Page 6

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

THURSDAY, FEBRUARY 4, 1937. THE STATE'S ACCOUNTS.

for the oaute that lack* afietamee, For the wrong that needs resistant*, For the future in the distance, And the good that toe can do.

The Labour Government inherited a balanced Budget and rapidly increasing revenues. In consequence, the Finance Minister on August 4 was able to provide for an expenditure of £31,054,000 (compared with £25,890,567 in 1935-36), with some confidence that the revenue, which had been £26,172,367 in the previous year, would rise sufficiently to meet the extra charges. The public accounts for the first nine months of the current financial year afford ground for expectation that Mr. Nash's estimates will be realised and that there will be a small surplus on March 31. There can be, of course, no certainty, in the absence of information as to the yield of income tax, which is estimated to amount to £6,000,000.

The accounts, as presented by Mr. Savage, should make the community realise afresh how greatly New Zealand is dependent upon the state of the overseas produce markets, and what a change has come over the scene since 1933. The recovery in 1934 and 1935 was steady, though unspectacular, but it was not fully appreciated. Exports last year were valued at £56,752,000, or more than ten millions more than in 1935, imports rose by nearly eight millions to £44,134,000. And the Government revenues have been swelled accordingly. The returns from Customs duties, sales tax and land tax for nine months of this financial year are all considerably greater than the returns for the twelve months of 1933-34. The increase is not likely to be checked in the time remaining before March 31. In the same period, January 1 to March 31, there will be a great increase in export returns, on account of the shipments of wool.

Remembering New Zealand's bitter experiences in past years, the Government — and private citizens —will be deliberately imprudent if they proceed on the assumption that the present favourable position will continue. The public accounts indicate that the Government, now receiving revenue in amounts which to its predecessors were only a dream, is spending all that is coming to it. An economist has pointed out that the price of wool has always been the major factor determining variations in total export values. Just now wool is "up," and there is high confidence that it will stay up for the remainder of the selling season. But who can say that wool prices will be as high next season, and the season after 1 Already in England there are discussions in responsible quarters as to the best way of averting or minimising "the next slump." It is for the Government to realise that although its increased expenditure can be sustained while export revenues remain high, export values notoriously fluctuate, and —as the last Government found to its cost—nothing ia more difficult to reduce than State expenditure, particularly when an increasing proportion, of it is devoted to social services.