The Evening Star. FRIDAY, MARCH 8, 1918.

Evening Star, Issue 16677, 8 March 1918, Page 4

The Evening Star. FRIDAY, MARCH 8, 1918.

The Minister of Finance announces that ho is warranted in sayNO'lncrease ing that the general posiln Taxation tion of the revenue at the This Year, end of the financial year (March 31) will be so ''satisfactory that no further increase in taxation will he necessary during the year 1918-19. This announcement is as satisfactory afi it is surprising, which is saying a great deal in a few words. The exaggerated Ministerial depression over the Dominion’s finances five months ago, when members of Parliament heard a gloomy statement that quelled their clamor for very substantial increases in war pensions and allowances, had prepared the people to expect o heavier financial burden in the form of increased taxation this year. Indeed, Ministers did not hesitate to permit the very general inference tha. the present exemption limit (£300) in respect to, ordinary Income Tax would require to be lowered severely, and that the Income Tax scale generally and specially would have to be heavily increased. The people will not ho disappointed, however, over the pleasant change in prospects and conditions, but will cordially endorse Sir Joseph Ward’s gleeful remark that, as Minister of Finance, he feels very happy that the position is as ho has outlined in his interesting statement, which is published in our news columns.

It is to be hoped very earnestly that tho Minister’s appreciable statement will not cloak the necessity for an assiduous practice of Nations' Economy. It is almost remarkable how Responsible Ministers shirk their duty to urge upon the country tho paramount urgency of economy. Sir Joseph Ward's statement contains abundant and very welcome proof of the buoyancy of the Dominion's ordinary finances even in. abnormal circumstances, but it almost ignores tho extraordinary finances occasioned by such circumstances. The fact that New Zealand’s enterprise in tho war represents a tremendous financial burden of close on £25 per head of population annually is not emphaaised-as it shordd be, for tho huge and ever-swelling war cost to the Dominion must eventually bo met. There is a prospect of Now Zealand having to bon'ow for war purposes in a few years as much money as has been raised for the development of tho country in about half a century. Tho National Government persist, as has been pointed out in this column time and again, in- pursuing the obstinate policy of filling the War Chest From borrowing almost exclusively, leaving the question of repayment to a far-off day. In view of this obstinate practice, the only way to counterbalance its economic evils is by raising the war loans as far as possible out of savings. Hence tho paramount neccssity for thorough National Economy. Tho Government have so far done very little to curtail extravagance in the Dominion. It is expected that the additional War Purposes Loan (£10,000,000) will be issued on tho 21st of this month. This amount will bring the Dominion's borrowing total during the war period to well over £70,000,000. Is anything more than that bald statement required to emphasise the necessity for National Economy ?

Ihe Minister s review of the financial position for the eleven months ended February 28 affords striking proof of the strength of the -Dominion, in spite of the withdrawal of some 80,000 men from its normal activities and industries. It also shows to a less extent that the administration of several State departments has been creditable, although it is still clear that there is room for the practice of departmental economy. Ihe revenue for the period increased in seven departments by no less than £3.036,115 over the corresponding period of last year; six departments showed decreases totalling £520,977. The net increase amounted to £2,5(5,108. Land 'lax and Income Tax were responsible, of course, for the greatest portion of the increase. The satisfactory results might have been substantially improved if the Government’s policy in respect to railways had been less wrongheaded. For the twelve-monthly period ended February 23 the net increase in revenue, compared with that for a similar

period the previous year, was £5,315,948, tho decreases totalling £483.931. The revenue from Land Tax and Income Tax, the Minister points out, showed a larger amount than has been previously produced in tho history of the Dominion. The position of the Public Works Fund, which has been administered with exceptional prudence, is especially satisfactory. From April 1, 1917, to February 28 last, the expenditure under appropriations totalled £852,286, leaving a total of ways and means of £287,962 to carry on public works till June 30 of this year. All things considered, the position in respect to ordinary revenue and expenditure justifies tho Minister s optimistic cheerfulness, though less buoyant-minded men might easily see less agreeable factors of. the Dominion's finances. It is regrettable that similar frankness and generosity of details are not practised in regard to war loans and expenditure. The country was gloomily assured five or six months ago that the war expenditure was approximately £1,900,000 a month. The total war ex-

penditure to June 23 last was stated to be £28,433,912. It was therefore anticipated that the total at the end of December would ba £59,000,000. But tho Minister of Defence has announced, that

up f» December 31 the -dotal was £52,515,711. .Someone has been out only about £6,000,000 in calculation. It was on tho strength of lugubrious estimates ns to finance that Parliament last session accepted a lower scale of war pensions and allowances than it had originally urged. Ministers may expect a demand for a detailed explanation next month.