IN 9 MONTHS’ TIME

Dominion, Volume 26, Issue 30, 29 October 1932, Page 12

IN 9 MONTHS’ TIME

Price Levels Will Improve MR. COATES HOPEFUL But Economy Still Needed CLEAR MESSAGE GIVEN Dominion Special Service. I’ukekolic, Oct. 28. “As a result of the Ottawa Confereiwo the {Dominion wilt see, not in the immediate future, but in about nine months’ time, a gradual but definite improvement of the price levels for the produce we depend on —the products of the farmers,” said tlie Kt. Hon. J. G. Coates addressing an audience of «<>(> in Pukekohe to-night on the general atmosphere surrounding the conference. Mr. Coates remarked that he felt more confident about the future than before the conference. He dealt with the Ottawa concessions on the lines previously published, and announced that arrangements were being made to sell surplus hops on hand, and that, for some time to come, New Zealand had gained a reputation for good products. He urged producers to maintain the high standard. A great deal had been done in the matter of effecting economies in public expenditure, Mr. Coates said, and as a result a substantial improvement had been effected in the position of public finances for the current financial year. The restoration of business confidence undoubtedly would do a great deal to accelerate progress along the road to recovery. In order not to check the incipient recovery of such confidence the Government had this year adopted the extraordinary course of budgeting for a deficit not exceeding a million and had refrained from imposing further taxation either for general purposes or for the Unemployment Fund; in fact, there had been some movement in the opposite direction, in that the Government had restored penny postage and, in pursuance of the Ottawa agreement, had made reductions in Customs taxation estimated at £250,000 for the balance of this financial year. In addition every effort was being made in providing work for the unemployed and to use the moneys in such ways as would provide a maximum amount of assistance toward a revival of business activity. The building subsidy scheme was a case in point. In short, the Government had so arranged matters as to provide a breathing space from further taxation burdens, and was doing its utmost in other directions to encourage business recovery. At the same time it should not be assured that it was out of trouble financially. The Budget for the current year allowed for a deficit not exceeding a million after taking into credit two and a half millions toJje obtained from reserves. These reserves were not in a liquid state and special arrangements had to be made with the banks to enable the amount to be made available. It had to be realised that the country was practically at the end of the reserves built up in more prosperous times and that, to obtain a balanced Budget next year, the amount of reserves being used this year, plus the estimated deficit—a total of three and a half millions—must be made up from some other source or obtained by a further reduction of expenditure. Certainly they could not go on budgeting for deficits. Such a course would inevitably increase the difficulties instead of relieving them. A rigorous control of expenditure and a campaign for economy in all directions had to be continued without abatement. He would like, he said, to impress this on the people of the Dominion. Furthermore, Mr. Coates said, they had to press forward with permanent, far-reaching economies designed to afford a maximum amount of service at minimum cost. After this had been done there was no possibility of effecting further substantial savings in administrative costs of services on their existing basis, and a permanent lightening of the burden of expenditure would to a large extent depend upon far-reaching changes to obtain equal service at less cost or on a definite curtailment of the services rendered by the State. Just as the Government was overhauling its costs, it expected local bodies to do likewise, Mr. Coates added.