A WARNING CONTRAST

Evening Post, Volume CXXX, Issue 25, 29 July 1940, Page 6

A WARNING CONTRAST

The contrast between the British and New Zealand War Budgets, to which attention was drawn during discussion of the Estimates, is so striking as to compel investigation. Four-fifths of Britain's expenditure is for war purposes and one-fifth only for civil needs, including the service of the National Debt. In New Zealand this year £37,000,000 is for war and the balance of a total expenditure which will' exceed £100,000,000 (from revenue and loans) is for civil needs. It is admitted, of course, that the two cases, are not exactly comparable. Britain is in the middle of the war zone and is putting every ounce of energy and effort into war-waging. New Zealand is remote, and, fortunately (owing to British naval strength and prestige) is not called on to prepare so intensively and thoroughly for home defence. Also, New Zealand is still in process of development, and cannot immediately stop all works which are designed as part of this process. When full allowance is made for

these differences, however, the contrast between our own and the British proportions of war and peace • spending shows that the New Zealand Government has failed to recognise what the heavy drain of war cost means economically. We simply cannot go on spending as we have done in the past. The excessive expenditure of former years landed the Dominion in great difficulties, , but we did not feel the full blast of , adversity because the reserves accumulated in an earlier period tempered its force. Now the reserves have been dissipated. If we continue on a career of prodigality we are surely rushing into difficulties. The Minister of Public Works, defending the share of expenditure under his control, said that if we were going to populate this country we must not take the attitude that we had to stop works because the country was at war. No one has said that we should stop, but a total expenditure of £20,589,000 (not all under the Minister of Public Works) is a very long way indeed from stopping. The effect of this is seen and will be seen still more in a drastic reduction of private spending.^ Mr. Doidge gave some instances in relation to housing. Private economy is, of course, essential as well as a reduction in public civil expenditure. But the two should keep pace. As it is " the* demands of the Government are forcing, and will force still more, the diversion of money and labour from necessary and productive private use to less essential public purposes. It is wise to prepare for development after the war; it is even wise to carry on development now, but it is most unwise to push this public development at the cost of neglect of the private estate. Progress is not assured by public development alone. The productive value of private assets must also be maintained. Otherwise there may be the contrast of splendid roads giving access to neglected farms—neglected because the profits which should go to maintenance are taken in taxation. Such a state of affairs would surely lead to depression and a check on productive private enterprise. The ; Government should take warning by studying the British Budget of the impossibility of all-in war and allin peace development at the same time. If the attempt to keep the ■ two persists the all-important private foundations of prosperity mil be < undermined.