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ISN'T THE WAR ENDING?

NASH'S Financial Statement was delivered after, but necessarily prepared before, the dropping of the first atomic bombs and the entry of Soviet Russia to the war against Japan. Except by delaying and recasting the Statement he could not have taken these portentous events into account. Through not taking them—or, rather, their probable effect, in bringing the end of the war much nearer—into account, he gave the Statement a certain air of unreality. For if, as is now confidently expected, Japan should be. forced soon to capitulate, the military contribution of the Dominion to the war may be considered finished. Though expenditure on military forces will inevitably remain at a high level, it will be expenditure mainly to pay and maintain them until shipping can be found to bring them home. Yet the Estimates provide amounts approximately equal to those spent last year upon the Navy and Air Force. This can by no means be justified if the fighting is soon to end. Similar considerations apply to Army expenditure, which, though substantially reduced, still apparently contemplates the maintenance throughout the financial year of a smaller Division.

This week's events may have other and even more important effects. If it becomes possible for all New Zealand's fighting men to return home much sooner than was expected even a week ago the great task of rehabilitating them, a task inseparably bound up with the general reconstruction and expansion of industry, will be more difficult. Its peak will be higher, and it will occur sooner, than anyone hitherto has assumed. The shortages of many kinds now existing will become, even though temporarily, more acute. The necessity for Government action to encourage and stimulate business and industrial expansion of every employment-giving kind will become sharper. Many thousands of men will be returning, sooner than was expected. They will need accommodation, clothing, jobs. These cannot be provided all at once, but the inevitable period of waiting will be longer, and so will affect more of the returning men, unless an effort commensurate with the need is made to provide them. The magnitude and intensity of the effort that will be required is still not fully realised. It is lamentable that the Government itself, if judged by the Financial Statement, falls far short of realising it.

The principal evidence that the Government appreciates a need to encourage and stimulate expansion of production is contained in the intimation that there will be special taxation allowances for new industrial plant. This welcome and commendable provision is accompanied by a blunt statement that "the time has not arrived for a general review of taxation." Yet, by continuing taxation unchanged the Government, unless its estimates of revenue are recklessly optimistic, will collect huge sums for the purposes of fighting a war that may soon be over. The national security tax—l/ 6 off every £1 of income—the sales tax, which, inter alia, adds considerably to the cost of housing, and the excess profits tax, heavily blunting the incentive to*much-needed enterprise, are to be retained unchanged, with all the.other taxes. The Government, characteristically, believes that it can do better with the-money, than can those who earn it. Though no one will contend' that all war taxation should be abolished—for, if it were/other means would have to be found of damming the flood of purchasing-power—some redaction is,- ; not only justified but. would be psychologically valuable. It is ■ wrong that the Government, any Government, should go on collecting war taxation at the rates which were justified when the war situation was at its worst. It is not only wrong; it will foster the impression that the Government, grown used to high spending, will not be easily broken of the habit. It rightly appeals to the people, for the sake of the servicemen, to limit their spending; but it betrays no anxiety to limit its own. Its assumption is that Government spending is good, but spending by citizens is always suspect.

• For the reasons outlined above, this Financial Statement has been delivered in circumstances not only extraordinary, but unique. While making due allowance for the impossibility of precisely anticipating the course of events, the House of Representatives has a duty to subject it, in its conception and in its detail, to a scrutiny more searching than usual. In so far as it contains an outline of the Government's intentions, it must' be regarded as plainly inadequate to the Dominion's needs in a future now visibly nearer. .

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Permanent link to this item

http://paperspast.natlib.govt.nz/newspapers/AS19450810.2.27.1

Bibliographic details

ISN'T THE WAR ENDING?, Auckland Star, Volume LXXVI, Issue 188, 10 August 1945

Word Count
744

ISN'T THE WAR ENDING? Auckland Star, Volume LXXVI, Issue 188, 10 August 1945

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