The Outlook.

Press, Volume LVIII, Issue 17452, 12 May 1922, Page 6

The Outlook.

In our reference yesterday to the Prime Minister's Feilding speech we noted as an important and encouraging fact the large amount (£968,019) by which the expenditure iii the March quarter of the financial year 1921-21! fell below the expenditure in the March quarter of 1920-21. This is a very substantial saving, but the Prim© Minister indicated that he feels obliged to reduce still further the cost of administration. The main object of the Government must be to bring down the expenditure by such an amount as will almost enable the revenue to meet it without any heavy call being made upon the payers of land-tax and income-tax. The abnormal growth of the income-tax burden is Bhown in the following table: Year ended Amount March 31st. Collected. £ 1912 ... ... 448,936 1913 462,994 1914 ... ... 554,271 1915 ... ... 540,318 1916 ... ... 1,392,119 1917 ... ... 4,262,125 1918 5,619,561 1919 ... ... 6,219,336 1920 ... ... 6,369,765 1921 ... ... 8,248,945 1922 ... ... 6,002,987 It was only because of the abnormal boom and inflation during the years of the war that these enormouß burdens could be bofne. They can be borne no longer, and the Government must reckon upon the necessity to budget for income-tax on something, like the basis of 1916. This points to a reduction of four, inillions or so in the present burden, and since fixed charges will not stand still, it is evident that the aim of the Government mußt be to reduce expenditure by a good rqany millions. Some provision has already been made to, this end, but retrenchment must bo the cardinal consideration for two or three years to come, even when the commercial sky has become sunny once more. It is when conditions are improving that the Government will encounter the greatest " difficulties. Most people are at present sufficiently alive to the need for „■ economy to make it easy for the (Government to shorten sail, but the Prime Minister fears that people will come along when conditions become normal and ask 'for enormous expenditure in the good old way. It is not merely possible, but probable almost to the point of certainty, that the lessons of the depression will thus be forgotten. [We may, indeed, expect a strong offensive against the policy of prudence and economy in the latter part of this year, when the- Opposition parties will certainly appeal, for support on the ground that they will provide something for everybody. Mr Statham's party announced its birth with a programme which consisted almost wholly of schemes for expenditure and for giving money away in one shape or other to almost every section of the community; The Liberal Party, in forming an alliance with Mr Statham, has, of douree, taken over the policy of prodigality.. The Labour Party, of course, aims at confiscation and a division of the spoils. This situation will afford Mr Massey on opportunity to commence his next three years of office as the guardian of the national economy against the spoilers, and if he makes full use of it he will be in a position to resist ,the pressure that will certainly be put upon the Government to spend freely as soon as the clouds pass away.