STATE ECONOMY

Dominion, Volume 24, Issue 104, 27 January 1931, Page 11

STATE ECONOMY

Task for Cabinet

PUBLIC SERVICE PAY Prime Minister’s Review IMPORTANT MEETINGS > ' ■ . 0 Members of the Cabinet will assemble in Wellington to-morrow ttf meet the Prime Minister, Rt, Hon. G. IV. Forbes, and to start the first of what promises to be a series of highly important meetings of the Ministry. Important announcements upon questions of national interest are expected to be made within the near future, Mr. Forbes will return from his home at Cheviot to-morrow morning and, apart from the preliminary work carried out by Cabinet as part of its economy campaign, he will review the developments in the economic condition of the country since his departure for England about five months ago. First and foremost of the questions to be taken up by the Prime Minister this week is that of the state of the national finances. This embraces the whole field of State expenditure and revenue and in addition to involving the policy to be followed by the Government during the present depression it includes considerations affecting the country’s commerce in general. Cabinet has made no secret of the concern felt as a result of the unexpected decline in revenue, and the setting up of the Special Economy Committee was the outcome of its determination to bring about even further reductions In expenditure than were at first considered necessary to balance this year’s Budget. Prime Minister’s Attitude. The Economy Committee has met almost daily since its formation and. comprising as .ft does members of Cabinet and two departmental experts who are in a particularly good position, to offer sound advice, it is expected to . place concrete and drastic proposals before the Prime Minister. In his one and only speech since his return from the Imperial Conference, the Prime Minister was fairly emphatic that he was going to adopt a determined attitude in meeting present difficulties, and it is understood that if he considers drastic action to be necessary he will' not hesitate to carry it out. It has been stated that the Economy Committee has come to the conclusion that small economy measures will not be sufficient to curtail expenditure to the necessary extent, and the inference is that further heavy “cuts" will have to be made. In ■ spite of the fact that suggestions of wholesale salary reductions in the Public Service were not treated very seriously in many quarters several Weeks ago, the impression is gaining ground in the service that this course might be taken at no distant date. There is also a persistent suggestion that reductions in departmental staffing may be made in all instances in which it is found that fewer employees will not seriously impair efficiency. In spite of the absence of official confirmation of these rumours, they are thought to have a certain amount of foundation in van-., ous branches of the service. Naturally Cabinet. will not adopt this course if it can see any other way out, but the fact remains that a certain uneasiness prevails among the departments. Although Mr. Forbes lost no time after his return to New Zealand early last week in meeting his colleagues of the Cabinet, his real work cannot be said to commence until to-morrow. It is understood that various economy plans are nearing completion, and it will remain for the Prime Minister to go into them and give his verdict. The activities of practically every Government department'have been passed in review by the Economy Committee, and Cabinet itself has given close attention to questions of wider import. Important Stage Reached. It will thus be seen that Cabinet has at no time during the past year reached such an important stage in its deliberations. . Circumstances have forced it into a difficult position, and there is every likelihood that it will be called upon to make decisions within the next few days that will bo unpopular in many quarters, should it decide to adopt the suggestions for even more drastic economies which it is known have been put forward. A revision of conditions in the Public Service will naturally' not prove the complete solution of present financial troubles, and it can be taken for granted that the Prime Minister's activities will extend into a far wider field. The rationing of work upon public works has been suggested as one measure to be adopted in order to give employment over a wider range and so lighten the growing burden qf unemployment. Although drastic curtailments have been carried out in railway construction there • is a possibility that the Government wifi once more investigate this question, and that it will not hesitate to stop other lines if that course seems unavoidable.