BUDGET SURPLUS

Press, Volume LXXXIX, Issue 27151, 22 September 1953, Page 3

BUDGET SURPLUS

“SHOULD TAXATION BE REDUCED ?” NEW ZEALAND POSITION DISCUSSED “Is such a current surplus an undesitable thing?” asks the writer 6T the Canterbury Chamber of Commerce’s’ latest bulletin, discussing the £26.000,000 surplus (as shown tn the; official- estimates of national income and expenditure) of revenue ■ over current expenditure in New Zealand’s Public Accounts for 1952-53. “Is this surplus a sign that the Government is overtaxing and should reduce taxation? There are doubtless some who would say that at all times the private citizen can use his money better than the Government can do it for him. and that this £26,000,000 should have been used to reduct taxation. “In the situation in which New Zealand finds herself, however, with a population anticipated to reach 2,500,000 in ten years and 3,000,000 in 20 years, it seems that the citizen must be forced to save so that the capital equipment can be supplied which will serve our rapidly growing population: educational buildings, roads, bridges and hydo-electnc works are some of the projects which the State is carrying out on behalf of the nation. “The £26,000,000 surplus has been used in 1952-53 to finance part of this capital expenditure.” Discussing Wagner’s Law—"that there is a persistent tendency both towards an extensive and an intensive increase in the functions of the State” —the writer compares State expenditure with gross national expenditure for the years 1938-39, 1949-50 and 195253. His figures show that gross national expenditure rose by 224% over the 14 years while total Government expenditure rose by 318%. The increase in Government expenditure. however, had slowed down since 1949-50.

“The present Government is one that has come to power with the objective of an economy campaign. However, following Wagner’s law these efforts of the Government seem to have produced ‘only temporary fluctations in the growth of State activities, not reversing the continuous upward trend.’ . . .

"The Government has put up a valiant fight against Wagner’s Lawit might not have been valiant enough for some, too valiant for others, but obviously it is not any easy thing to reverse a trend which has been going on for decades.”