PUBLIC AND PRIVATE FINANCE

Evening Post, Volume CIX, Issue 27, 1 February 1930, Page 8

PUBLIC AND PRIVATE FINANCE

The Public Accounts for the first three quarters of the financial year indicate that revenue is likely to exceed the estimate; but expenditure is also high. The Minister of Finance anticipates the possibility of a small surplus if the Customs revenue does not materially decline. The position is not one warranting pessimism, but it certainly emphasises the need for caution in preparing and ■carrying out expenditure plans. At a lime like this prudence is highly desirable, not merely for the conservation of State finance, but to obviate the necessity of the State competing too keenly with private finance for the funds which are necessary in business. The hardening of the money market, to which we referred yesterday, is again brought to public attention by an increase in the bank overdraft and deposit rates. The banks have found it necessary, as they did in 1927, to check advances by raising the overdraft rate by a half per cent. At the same time, they are offering a higher rate for fixed deposits over twelve months. Such measures are deemed advisable, so that the bank resources | for essential business may be strengthened and not depleted by diversion lo less urgent purposes. The upward movement will not be popular, but agitation and protest will, not remove the basic cause. The only remedy is the exercise of such reasonable prudence that, without checking progress, a speedy improvement of the position may be brought about in so far as it lies in New Zealand's power to do so.