THROUGH LONDON EYES

Dominion, Volume 29, Issue 301, 16 September 1936, Page 12

THROUGH LONDON EYES

“New Zealand’s Experiment”. It is one of the advantages of democracy that a country can indulge in the luxury of a reformist Government during prosperity and return to the discipline of rt conservative Government during depression, says the “Economist” of August 8. In New Zealand a Conservative National Government restored the financial position during the crisis of a few years ago, and a reformist Labour Government is now engaged in distributing the fruits of recovery. Already the new Government has raised Government wages, reduced hours, and guaranteed certain agricultural prices; and this week it introduced its first Budget. The Budget, which shows a small surplus, is an orthodox “recovery” one, enlivened with a dnsh of redistributive taxation. Some £470.000 additional expenditure necessary to restore salary “cuts,” some £1.037,000 for public works not of . a “self-supporting” kind. and £250.000 extra for defence, are all to be financed out of the natural increases from revenue accruing from recovery. A further £1.710,000 for extending old age and invalid pensions, however, is to be provided by increases in income tax and land tax. Provided that recovery continues, as now seems probable, this modest increase in direct taxation should lie able to be borne. It is proposed to spend £10,450,000 out of loans for selfsupporting public works. Meanwhile the guaranteed, prices for butter and cheese, now published by the Government, have evidently been fixed with great caution. They have even been criticised by Conservative speakers as ungenerously low I The success of the Labour Government’s policy, wholly depends, of course, on the maintenance of the price of New Zealand’s exports. So long as world recovery keeps those prices from falling. New Zealand's new reformist experiment will continue to be prosecuted under the most favourable conditions.