SOME NOTABLE NEW ZEALAND BUDGETS

Dominion, Volume 27, Issue 280, 23 August 1934, Page 8

SOME NOTABLE NEW ZEALAND BUDGETS

Recorder.)

Country’s History Traced In State Expenditure

(BY

The first Financial Statement under constitutional government in NewZealand was submitted to the initial Parliament at Auckland 80 years ago. It made no claim to fame and suffered no charge of futility. In the searchlight of to-day the document appears notable for its simplicity and political idealism. It covered the activities and needs of a European population of upwards of 30,000. whose Customs revenue for 1854 amounted to nearly 130.000. Total revenue was £200,000 in round figures; expenditure £86,000; surplus £114,054. The Public Debt amounted to a little over £170,000. It was generally agreed that times were good and that government was sound. “A great work then, gentlemen, now lies before you.” observed the Financial Administrator (Mr. It. 11. Wynyard). “To confirm by your prudence and moderation the fitness of ottr countrymen for Representative Self-Government and Free Institutions, and to develop the resources of a country rich in all the elements of future national greatness.”. Bleven years later, when Parliament first assembled in Wellington, the Colonial Treasurer’s record was less exhilarating. Prudence and. moderation had become slack. National revenue had increased to nearly £1,500,000, but expenditure also had grown. Within six years taxation in terms of population had risen from £2/16/6 per head to £4/9/11. The Treasurer (Mr. William Fitzherbert) defended the increase,, saying: “Now, at first sight this might appear to be a very disheartening fact, as exhibiting a population ground down by taxation. But such is not the case. The consuming power of the population has nearly doubled in six years, which means that the fair dame who*only wore cotton formerly now dresses in silk, and that the 'settler who was contented with his beer now affords himself the luxury of wine.” It may be noted that within the more extravagant years the Colony' had exported gold to the value of £7,500,000, or nearly £1,000,000 in excess of the whole of the National Debt. A Wave of Depression.

Tilings political went forward with relative smoothness until IS6B when, in September, the Treasurer (Hon.. J. Hall), presenting a sombre Budget, craved from the House “something more than the ordinary measure of consideration,” because he had to speak of financial depression. He deplored the fact that, for the first time in the history of the Colony, “its revenue exhibited a falling-off corresponding but too truly with’ ■ the general commercial depression.” That Budget was not popular. It discouraged extravagance and counselled harder work. But it opened the way to what was called “a reawakening of New Zealand’s colonising spirit.” The country rang with demands for a renewal of development and many public works. A Famous Budget. <■ In June, 1870, the Hon. Julius Vogel, as Colonial Treasurer, brought down the •first of really famous Budgets and outlined a lavish programme of public works. Aiming at the abolition of Provincial Councils, with whom the general Government had often clashed, and insisting upon equal treatment of both. Islands, Mr. Vogel announced that his Administration proposed to provide £400,000 for a trunk road in the. North Island (the South Island had. good roads and a railway, the North Island was deficient in both roads and railways) also £200.000 to create a landed estate for the North Island, £60,000 for telegraph extension, £50.000 for road districts, and £10,000.000 during ten years for 1500 or 1600* miles of railways. The era of bold expenditure had dawned. There was some hostility and much adverse criticism. The Treasurer brushed objection aside. “We shall he told that, these proposals will entail on posterity an enormous burden.” he said. “Granted—but they will give to posterity enormous means out of .which to meet it.”

Changes of Ministries. There were, numerous changes of Government before the “colonising spirit” had full play in the direction of land settlement, advances to settlers and workers, and all the more or less expensive development giving posterity enormdus means to meet burdens. From 1872 till the advent of the Ballance Government on January /24, 1891, no fewer than 17 different Ministries came, did their best, and disappeared, although their rival parties remained, and helped either to curb expenditure or to give it a loose rein. In that period there Were no outstanding Budgets, although each in turn, irrespective of the responsible party’s angle of vision, indicated the New Zealand political passion lor spending public money almost with nonchalant freedom and passing the burden on to posterity. With the advent of the Liberal Administration to unbroken power for over a score of years “humanitarianism” was the spirit of every enactment, and New Zealand acquired the reputation of leading tl(e world in democratic legislation. Many Budgets were acclaimed as being famous for administrative enterprise and political generosity; here and there, however, many thopghtful men foresaw results whicli would seem to be infamous in their exactions and effects. Reproductive Borrowing.

The matter of revolt against State extravagance became louder as the Liberals' power waned, and in 1911 Sir Joseph Ward’s Budget was distinctive for its vehement defence of borrowing. He flagellated political and journalistic critics for having dared to injure New Zealand’s credit by asserting that the Government had over-borrowed. lie explained that while the public debt, from 1891 to 1911 had increased from £38,830.350 to £81,078,122, more than 80 per cent, of the increase was selfsupporting. This' recalls the experience, of a former Liberal Minister who once had the pleasure of a talk with Mr. Calvin Coolidge. “You are from the little country that is overweighted with debt.’’ said the then President of the United States. “Do you mean ever to pay for anything?" "Ah.’’ replied (tie touring Minister, "don't forget that most of our public debt is reproductive." "Yes. I know." observed Mr Coolidge. "We have had the same experience. £5.000.000 for roads, and in 15 years your , assets are gone You step into a first-class railway car which will never lie paid for; and a worker switches on electric light of which the capital cost has not been paid." Reform and War. When Sir James Allen introduced his first Budget on behalf of the Ito form Government in 1913 it was considered notable for its evidence of prudence and promise of a firmer control of finance. Unfortunately the out-

break of war a year later made a violent end to good intentions. ' A proposal to borrow £12.000.000 for war purpose's was merely an item in the first wai time National Government’s Budget. Everything that appeared to be taxable- was taxed without ,a murmur, and the necessity of dire emergency became an irksome habit. Indeed, it mny .be said that successive Governments have been' able to impose burdens and spend money on an unparalleled scale during the past fifteen years witli loss trouble than the first Parliament in 1854 resolved to impose a duty of 5/- on each imported sword Again', an emergency lias brought il National Government into power for the purpose of helping the Dominion out of an economic morass. Will tlie Coates Budget this evening gain distinction for a reversal of past policy, thus giving taxpayers relief instead of an additional burden?