SERIOUS OUTLOOK

Dominion, Volume 24, Issue 54, 27 November 1930, Page 12

SERIOUS OUTLOOK

National Finances FURTHER ECONOMY Special Cabinet Meeting DEFICIT FEARED Ministers of the Crown have been summoned to Wellington for a special meeting of Cabinet to-day, when it is understood that the serious position of the finances of the country will receive urgent consideration. Considerable importance is attached to the meeting, as it is believed that steps will be taken to effect even further economies than those originally planned by the Government in order to avert a deficit on the year’s financial operations. In spite of the fact that a surplus of £246,000 was estimated for the year in the Budget, fear is already felt in Treasury circles that a deficit will occur unless immediate steps are taken to right the position. All Possible Savings. Heads of departments have been instructed to meet Cabinet to-day, and it is expected that they will be impressed with the necessity of still further curtailing expenditure by effecting savings in every possible direction. In the Budget forecast of the current year’s operations, it was estimated that revenue would total £25,120,000 and expenditure £24,874,000, leaving an estimated surplus of £246,000. Since the Prime Minister delivered his Budget speech to the House, however, the financial position has not evolved as anticipated, and the Government is now faced with the possibility of expenditure proving greater than expected. National spending falls under two heads, permanent appropriations and annual votes. The former were expected to absorb £17,289,000 this year, and annual votes £7,585,000. Permanent appropriations have in any case to be met. by the Government, so that the only way to curtail expenditure is to reduce annual votes, which include the sums spent on administrative work. By pruning in various directions, the Government was able to cut down annual votes this year by, £388,000, as compared with the previous year. By this means it was hoped to do a great deal toward balancing the Budget, as about £2,500,000 was expected to accrue from extra taxation. Revenue Disappointment. The position now appears to be that the increased taxation will not result in revenue being benefited to the extent at first anticipated. The only course now open would seem to be a still more drastic revision of departmental expenditure. An indication of the recognition of the need for economy was provided by the announcement of the Minister of Defence on Tuesday that Cabinet had decided to postpone the holding of camps for officers and non-commission-ed officers who have continued training voluntarily since the temporary abolition of compulsory military service. It was fully intended until recently that these camps should be held, but Cabinet decided tha: it could not afford to spend the £25,000 which would be involved. Customs Receipts Decline. This year’s Estimates were notable for the fact that practically every department’s vote was cut down. Although Parliament passed them with little alteration, the Government is now’ faced with the position that it must effect greater savings. The economic position generally is believed to be chiefly responsible for the situation that has arisen, and most importance is attached to the serious decline in Customs revenue. The value of goods imported for the nine months ended September 30 totalled £33,348,543 as compared with £36,345,414 for the corresponding period of the previous year, a decline of £3,005,871. The value of goods imported during September totalled £3,711,313 as compared with £5,082,319 for September, 1929, a decrease of £1,371,006. The falling-off in revenue from this source has been caused mainly through a fall in the importations of motor vehicles. The value of vehicles imported for the first nine months of this year was £1,391,487 less than for the corresponding period of last year. It was estimated in the Budget that Customs revenue for the year would total £B,530,000, but it appears that the actual Customs receipts will fall far short of this. The Acting-Prime Minister, Hon. E. A. Ransom, will be unable to attend to-day’s meeting of Cabinet, as he is taking a rest from official duties at his home at Dannevirke. His place is being taken in the meantime by Sir Apirana Ngata, Minister of Native Affairs.