ASSISTING WAR FINANCE

Dominion, Volume 34, Issue 135, 4 March 1941, Page 6

ASSISTING WAR FINANCE

In Canada the Minister of Finance was able to show that, in two years, ordinary expenditure had been reduced by almost 17 per "cent. As a result of the economies effected more revenue was available for financing the war effort, thus reducing the necessity for borrowing. This must be regarded as a very substantial contribution toward the policy of paying for the war as it went on. And it is evident that this system is generally favoured in the overseas British countries. Commenting on the last South African Budget a London journal states that the Minister. Mr. Hoftneyr, was able to offset loan expenditure by £11.500.000 “as a result of economies seared in other directions both in 1939-40 and in 1940-41, and as a result of the Treasury’s profits on the sale of gold.” In South Africa the allocation of war expenditure, as between revenue and loans, is in the proportion of 3 to 2. and this has been made possible by strictly controlling ordinary outgoings. The British Government," of course, has adopted the same course, reducing all civil items where savings could be effected, and it appears to be the accepted policy in practically ail British countries except New Zealand. Here, in the first nine months of the current year, expenditure did show an apparent decline of about £2,000,000, when compared with 1939-40, but that was solely due to the fact that in the previous period expenditure on defence was included in the “ordinary” expenditure aggregate. This year it has been excluded. If the item had been excluded for both years, then the ordinary expenditure of the Dominion has actually increased.