The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo and The Sun. FRIDAY, JUNE 28, 1940. PAYING FOR THE WAR.

Auckland Star, Volume LXXI, Issue 152, 28 June 1940, Page 6

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

FRIDAY, JUNE 28, 1940. PAYING FOR THE WAR.

For the cause that lacks a&s&tanoc. For the wrong that reed* reststano9, ' For the future in the distance, And the good that tee can do.

During the years 1914-1922 the War Expenses Account spent £81,000,000. The whole of that

sum was derived from loans, £55,000,000 being raised in New Zealand and £26,000,000 being lent by the United Kingdom Govern-

ment. The cost of interest charges, £15,800,000, on this debt was met by increased taxation. The amount so raised by war taxation far exceeded the higher interest charges, with the result that the Government by March, 1922, had accumulated surpluses amounting to £25,200,000. The foregoing figures form a basis on which the Government's war finance proposals, disclosed last night, may be considered. The first point to notice is that this war is enormously more costly than the last. Its cost to New Zealand in the current financial year is estimated at £37,500,000. This compares with a total of £97,200,000 for actual expenditure on military purposes and extra debt service during eight war and post-war years, 1914-1922.

The disadvantages of depending mainly on borrowing to finance war were sufficiently demonstrated in New Zealand in 1914-18, and ever since, and the Government is wise in its determination to avoid, as far as possible, a repetition of the error. Not that it will be possible to avoid borrowing heavily, both abroad and at home. In the current year alone, expenditure overseas is estimated, provisionally," at £19,750,000. Mr. Nash hopes that it will not be necessary to borrow all of this, but to the extent that it is necessary, "we will bo piling up dead-weight overseas debt that will be a heavy burden on .us for many years after the war, when our ability to pay may be less than it is now." This fact, and the necessity of averting such consequences as far as possible, are the best justification of the exceedingly heavy burdens which the Budget lays on the people.

The requirements of the State for war purposes being of extraordinary magnitude they can be met only by extraordinary means, affecting all classes. It is to the credit of the Government that it has not shirked the imposition of a new tax which will be particularly unpopular among the less responsible section of its own supporters. The Government —or Mr. Nash—has also shown considerable ingenuity in widening the field and increasing the yield of existing taxes. But it is also noticeable that it has shown neither ingenuity nor determination in reducing its own non-war expenditure*. The facts are easily seen:— '

APPROPRIATIONS. Permanent. Annual. £ £ 1034-35 ...... 13,441,762 11,057,834 1935-36 13,748,448 12,142,119 1936-37 14,088,000 16,587,000 1937-38 15,621,000 10,628,000 1938-39 14,333,000 21,440,000 1039-40 17,842,603 19,812,217 1940-41 (est.) 15,134.000 21,650,000

On top of civil expenditures, which have been enormously increased during its term of office, the Government is imposing the extraordinary expenditures necessitated by the war. That the extra burden .vould be heavy the public knew, but they expected, and they have the right to expect now, an extraordinary effort by the Government to reduce its civil expenditure. Many thousands of men are out of the country, on military service. They include a substantial number of civil servants, but the expenditure figures suggest strongly that, whereas private employers meet the position by economies, the State as an employer makes no comparable effort. Its ideas of what is necessary and what is unnecessary in wartime change slowly; its action to give effect to its changed ideas is even slower. The Public Works programme last year was estimated to cost £23,917,000; this year it is to cost £21,589,000, and £15,083,000 is to be borrowed for it. This and other expenditure cannot be justified at this time, and if the Government wishes to retain public goodwill it will not attempt to justify them, but will at once revise the Estimates.

The Budget as a whole emphasises the need of a War Cabinet which will take a new and comprehensive view of the Dominion's war-time problems and devise ways of solving them. It requires heavy sacrifices from the people, and quite rightly; but these sacrifices will not be felt to be right until and • unless the people know that the best available ability is directing the war effort, so that they may be assured that money taken out of pay envelopes, or taken out of bank accounts without payment of interest, is being spent to the best advantage for the purposes for which it is ostensibly taken.