FINANCIAL POSITION

Evening Post, Volume CII, Issue 29, 3 August 1921, Page 4

FINANCIAL POSITION

THE PRESENT STRINGENCY CAN WE IMPROVE IT? No. in. (Contributed by the New Zealand Welfare League.) Though the main causes of the financial depression are- beyond our control, insofar as we are adversely affected by conditions obtaining abroad, we can undoubtedly modify the position locally. We have in previous articles attempted to outline the general causes which have brought about the present position, and we propose now to discuss, in a general way, the best protective measures, and financial policy to give ua relief,in this country. We, like the whole Empire, are faced with the problem of adjusting our ecohomic and financial system to au entirely different set of conditions to those obtaining before the war. We need careful inquiry, clear thinking, and bold decision, but as a basis we must have a ■firm conviction that if we are true to our country, our future is assured. To sit gtill and wait is no use whatever. ENTERPRISE AND WORK. One of the results of the war has been a complete change in the trade equilibrium. The coal position in England may result,in her taking.a lower place in the manufacturing world; other nations to whom the war gave unique opportunities to establish industries and capture markets for manufactured goods have now entered into competition, and international rivalry is bound to be intense. It is a time for sound enterprise, public economy, and hard work, and the country which "slacks" is doomed. Yet it is a curious outcome of the war that large sections of the people seem to be permeated with the idea that they can lead more comfortable lives and do less work than they did before. One has only to look at any of our occupations and see that the "butput" per man has decreased alarmingly in spite" of higher pay. The result is that the services rendered cost far more than the increased payment warrants, and being "passed on" to the s consumer adds .to his burden at a time when he has almost more than he can carry to pay for the war. This is what is happening in the Old Country* and in most of the Empire, and is largely due to lacjj of knowledge in the elements of economics and the mischievous teachings of the Socialist leaders, whose aim is to destroy our whole constitution. Impoverished and burdened as we are by the war and our own improvidence, we must, if we wish to relieve the position, work together, get busy, drop every kind of loafing, and thug cheapen the "output." We have seen it argued that the present unemployed and financial stringency is due to over-production. We differ with this view, as we believe that facts point to the hoarding of produce by the Government at Home to avoid loss, combined with the. diminished spending power of consumers abroad (due to the mischievous strikes and stoppages of industry), as having caused the present fall in export prices which has hit New Zealand so hard. When, howevei, it domes to coal, houses, and other products of ontorprise locally, there is no doubt that decreased efficiency , combined with increased cost has placed a burden on the community beyond calculation. This is obvious to anyone who think*. The evil grows as it progresses, restricted output, .co.-'uned with high payment for services, increases the cost, this curtails the consumption by lessening the demand, resulting in hampering the industry and unemployment. ECONOMY. Both pubKc and private expendrtnte may well cause the alarm which has been repeatedly, voiced by many of our leading citizens'and by this league during the last twelve months; yet though it vitally affects the financial position of the country and every one in it, no warning was taken to meet the slump which was obviously coming, and even now the repeated advice of men who know appears to fall on deaf ears. Government, municipal, and private waste and expenditure still obtain at a time when (to quote the president of the Wellington Chamber of Commerce) "the instinct of self-preservation" should rouse Government and the public to curtail unnecessary expenditure. We do- not advocate the curtailment of all expenditure, but urge that it be limited to propositions of a productive nature —to cut out frills and non-essentials, to concentrate on things that really matter is* in our opinion, essential. This applies to employers as well as employees, it implies co-operation in big things in place of the constant squabbling over little things which has been so prevalent during the last few years and has done so much to aggravate our present troubles. TAXATION AND LEGISLATION. There is room and vital necessity for a complete overhaul of the incidence of taxation. It has reached such alarming proportions that industry and enterprise are being hampered. President Harding, addressing the Senate on 12th July, is reported to have said, "It is unthinkable to expect a business revival while maintaining excessive taxes." ,111 this country it is not only the amount of taxation but the inequitable distribution of the burden that is handicapping tho development of our resources. We admit that taxation is necessary to carry on, but it should be made in such a way that enterprise is not hampered. This is too large a matter to discuss at present, but, as stated earlier in this article, we have to face new economic conditions, and we should like to see the most careful inquiry by the best available experts with a view to a bold revision of the whole incidence of taxation ;uid the best way to conserve available resources so as to avoid any risk oi increased burdens. It should at the same time be seriously considered by Parliament whether the lime has not come when they should modify regulations and legislation which prevent the normal movements of capital, and which, by artificial controls and subsidies, interfere with the natural laws of supply and demand. No consideration of political expediency should stand in the way of such. national needs.