The Evening Star THURSDAY, AUGUST 6, 1931. THE BUDGET DEBATE.

Evening Star, Issue 20864, 6 August 1931, Page 8

The Evening Star THURSDAY, AUGUST 6, 1931. THE BUDGET DEBATE.

Mr Coates did not keep Parliament on tenterhooks last night ns to his attitude towards tho Government s attempt to square the finances. Ho is not going to move a vote of want of confidence, and he announces that las party’s policy to help rather than hinder tho Government in a task which dwarfs other parliamentary business will bo continued. After the rumours about dissensions at the very protracted Reform caucus, this may he taken as evidence that tho insurgents have been quietened and that Mr Coates is still sufficiently master of his own house to be able to guarantee tho line of conduct his followers will pursue. This puts well into tho background the possibility of a dissolution and an appeal to tho country at a date rather earlier than the normal time. After his preliminary reassurance Mr Coates did not discount its value by hostile criticism of methods, despite concession of the basic I’/rinciple. As a matter of fact, tho impression convoyed by hiS speccn is that it differs very little from what on© would expect from a Minister in the Cabinet room discussing with his chief a first draft of- tho Budget prio» to its adoption for presentation to tho House and tho country. The tenor ol his argument was for budgeting on a smaller scale—a reduction of the figures on both tho revenue and the expenditure side. Could not saving bo still more rigorous so that taxation could be less rigorous? It is a question that nearly everyone has been asking; but the answer is not easy by any means. Tho effecting of economies takes time. Mr Coates’s own Finance Minister was talking of “ tapering off ” —though this applied more to borrowing than to departmental spending—for some years before tangible results began to appear. It is significant that Mr Coates singled out the Education Department as one providing the widest field for retrenchment, and in this ho seems to be in agreement, not only with tho Prime Minister, but with a considerable section of public opinion. Haphazard deductions from the vote of over four millions would be made if tho inexpert attempted them forthwith, and tho matter is being entrusted to those who know enough about pruning not to injure the tree permanently. Again Mr Coates asked whether it was necessary to spend so much .money on railway and road construction, and was sufficiently answered hy the one word “ Unemployment.” It is perhaps incontestable that in some Government departments, because of the reduced amount of money available for expenditure, enough work cannot ho found for the permanent office .stall's to. keep time from hanging heavily on their hands. In some districts this is understood to apply to the Public Works Deportment. Again trade stagnancy must moan less to do iu other Government offices. If wo take the case of the Post and Telegraph Department, it is not unlikely that higher telegraphic rates have accentuated 1 <■ decline iu turnover duo to business quietness, thus causing the equivalent of overstaffing. There might, of course, bo retrenchment here; but again the result is additional unemployment to cope with. And one hardly dare sugc*st that before long altered conditions might call for their replacement. In

more ways than one Mr Coates was in a delicate position. Apart from the presence of the hardly restrained “ insurgents ” behind him, there is the knowledge that he was the sponsor of tho Main Highways System, that he was mainly responsible for the huge expenditure on a railway workshops reorganisation on a scale fit to cope with a railway track mileage far greater than what New Zealand would have oven if the present Government had persevered with Ileform’s legacy of unfinished lines instead of shutting down summarily on some of them. To our way of thinking Mr Coates was on the soundest ground when ho queried the wisdom of increased Customs taxation, particularly the heavy primage duty, as raising the cost of primary production. Mr Forbes is no less alive than his vis-a-vis to the need for lowering production costs; Mr Forbes is equally reluctant to increasing the cost of 1 ving through Customs and income taxes that catch the small man in the towns. But what alternative had he? Mr Coates suggested no other practicable way. As to income tax increases, the path followed, apart from lowered exemptions, is that instituted by Mr Dowuio Stewart. His analysis of the Budget-balancing proposals should bo the most instructive of further contributions to the debate, just as Mr Holland’s may possibly bo the most sensational. _______