The Dominion. THURSDAY, APRIL 8, 1909. RETRENCHMENT AND AFTER.

Dominion, Volume 2, Issue 477, 8 April 1909, Page 6

The Dominion. THURSDAY, APRIL 8, 1909. RETRENCHMENT AND AFTER.

.Most of the discussion that has followed upon the Prime Minister's speech at.Upper Hutt has been concerned only with the financial aspect of the work of government. The work of rehabilitating the country will not be accomplished, however, merely by carrying 'out economies in administration. The extravagance and wasto that have grown up in the past dozen years have accounted for an enormous and, as the Government's present action admits, a quite improper increase in the national expenditure. But the revenue side of the national ledger requires attention. We pointed out in November last, when commenting on the returns for the September quarter, that there had been a check in the progress of the country. Although we were then fiercely assailed, not only by the Government's friends but from quarters which profess concern at the Government's wasteful methods for pointing out the plain lesson of the statistics—namely, that revenue was practically stationary —time has brought confirmation of our view in the shape of a statement by the Prime Minister himself. In his Upper Hutt speech there occurred the following passage, to which the public should give its attention pending the completion of the retrenchment scheme:

"As to the year 1908-9 the whole of tlio figures arc not yet available, but wo nmst necessarily expect a largely reduced balance to onrry. forward to tlio coming year. In _viow of the fact that wo have a, reduced rev\.

enue, caused largely by remissions of taxation, and that wo have paid during tliopast year ££00,000 out of revenue to tho Public I Works l'lirid, our balance must jiecossavilv he smaller, but 1 am glad to say that as tar as I can judge at present, the cstiiyato given by mo in my Budget last session, will bo realised. . . . Why I feel that it is necessary that we should examine tho general position of tho public services is largely due to the fact that our expenditure in tli'o past year has risen considerably, and that thcro is a known shrinkage in tlio revenue." The financial returns for the year will shortly make it quite clear that remissions of Customs taxation are only responsible in part for the falling away of revenue. As a matter of fact the rate of taxation per head has increased to an astonishing figure. It was £5 Os. -Id. a head during the year 1907-8. The public is already paying far more than should be asked in the way of taxation. Yet the revenue remains as stated. This is a fact of greater moment than oven the preposterous growth of the public expenditure. Its causes are less plain, and the remedy for it is less simple than the remedy for extravagance. Whether or not expenditure should keep pace with population is a question that admits of argument But nobody will contend that while a country is growing rapidly tho rate of increase of revenue should not only be maintained but should grow larger. New Zealand is a country almost virgin when compared with older lands. It is wonderfully rich in its resources, and may almost be considered specially framed for the exposition of what sound government can do for a people. Unfortunately we have not had sound government for many years past. That the country has thriven is testimony, not to the wisdom of its governors, but to the ability of the country to survive bad administration. It has thriven, but it has not thriven as we should expect from its unequalled natural advantages. One of the causes operating against the full and stable growth of the nation has been a spirit of extravagance and thriftlessness in the community as a whole. Industry, conservation, and thrift have been neglected virtues for some years, and the community has been encouraged in its extravagance by the assurances of the Phime Minister that unlimited confidence in the present and the future should be the guiding motive of the public's behaviour. The first cause of tho present unsatisfactory position, that is to say, is waste. It is waste, too, to which in the last result must be reduced the failure of the Government to carry out a wise policy of land settlement. We willingly give the Liberal Government the credit of having placed thousands of men upon the land, but the bulk of the settlement that has taken place has taken place on wrong lines. Not only is it impossible that the land when held on a leasehold can yield as rich a return as when it is held by freeholders. There is a secondary result of the leasehold policy which leads to further waste of the national resources. The possession of large land revenues from properties bought with borrowed money has encouraged careless financing on tho part of the Government. A vigorous policy of land settlement that would allow every settler to acquire the 'fee simple of his holding would not only bring forth richer returns from the soil, but would keep the Government's finances sound and wholesome.. The second cause of the check in the country's progress is therefore also waste.

There is a third source of waste, which is perhaps the most deadly of all—the waste proceeding from the restrictive labour legislation upon which short-sighted men have plumed themselves for years. As we have said before now, wo believe that the State should prevent sweating, and should see to it that industry is surrounded by humane conditions. That can h?, done, however, without any arbitrary interferences with the natural laws of industry. Let us place a ban on sweating, as we place a ban on cesspools and open drains. But do not let us go further, and provide an industrial equivalent of such a rule as that everybody must diet' himself and take perpetually a course of medical treatment. The most notable and most disastrous result.of our compulsory arbitration laws has been tho encouragement of the ca' canny , policy, and the conversion of industry into a duel in which tho workers' main endeavour is to_ get the better of his employer, and to give as little as he can in return for as much as ho can get. In his evidence before the Parliamentary Labour Bills Committee last session, Me. George Booth quoted some remarkable figures to show the extent to which tho iabour laws had restricted the production of wealth. He showed- that in a certain large industry tho output per man had fallen from £254 in 1901 to £224 in 1905, and this I despite the fact that there was an increase in the price of the goods manufactured. These figures undoubtedly reflect the general tendency of the past decade. _ It is beside the point to quote the statistics of our manufactures, which show an increase in production. Tbe point is that the growth of production has been far slower than would be expected if the sun of good government had been shining. The three diseases we have been discussing—evil counsel from high places, a bad land policy, and bad labour laws—are all curable. Their results are manifest in the serious check to the country's progress. And no policy of reform can be sound which does not cure these evils.