THREE MILLIONS SAVED

Evening Star, Issue 20985, 26 December 1931, Page 8

THREE MILLIONS SAVED

BUT MORE ECONOMY NEEDED THE COMING COMMISSION [Fkou Our Correspondent.] WELLINGTON, December 2G. A year ago tho Forbes Government appointed a Cabinet committee, assisted by tho head of tho Treasury and the Public Service Commissioner, to make drastic reductions in the estimates of expenditure, and as many immediate curtailments as possible owing to falling revenue. The Prime Minister was in England when the matter was first considered by the Hon. E. A. Ransom (Acting Prime Minister) and his colleagues, but tho position was made clear to him by cable, and he authorised tho setting up of tho committee. It is now an open secret that a cut in Public Service salaries had been officially suggested at an earlier date, but that it was postponed in tho hope that conditions would improve and obviate the necessity for this drastic measure. However, it had to he enforced on April 1 last, and in tho opinion of high financial authorities was then a year overdue. The Cabinet Economy Committee, which functioned right up till tho formation of tho Coalition Government, and achieved some remarkable results in reducing the immense volume of departmental reports submitted to Parliament, is to bo superseded by a Royal Commission, for the economy measures now needed go beyond the pruning of departmental expenditure. It is understood that the Government’s plan is to set up a small commission which will bring to bear on the problem the expert advice of outside financial and commercial authorities, and that possibly the commission may include someone with a thorough knowledge of departmental expenditure. It is probable that taxation questions will he included in the order of reference, as in some directions the limits of taxable capacity appear to have been reached. The Finance Minister (Hon. W. Downie Stewart) is responsible for the statement that it is well known that the company tax in New Zealand is the heaviest in the British Empire, if not in tho world, while individual income tax is the lowest in the British Empire. Economies approximating to three millions sterling per annum have already been mafic in governmental expenditure since the Cabinet Economy Committee set to work on December 23, 1930. This committee effected reductions which totalled two millions sterling, hut the Coalition Cabinet decided on further economies, which for the current year amount to £400,000, and will total one million sterling in a full financial year. The limit of economies has not yet been reached, as falling revenue and poor prospects for the financial year opening on April 1, 1932, impel the Government to make inroads into services not yet affected. It is significant that a prominent Minister has publicly stressed the fact that fourpence in every shilling collected from tho taxpayer lias to be used for social services, including pensions and education. The Economy Commission is faced with rigid limitations, owing to the fact that nearly half the net expenditure of the Consolidated Fund consists of debt charges. Financial conditions abroad and the fall in the net income of tho people have combined to increase tho relative burden of theso debt charges, and as they are a first call on the dominion —as evidenced by the important decision to control exchanges—it becomes evident that tho many forms of pensions payable in the dominion must come under review, and that the Public Service has reason to fear that tho 10 per cent, cut of nine months ago may not represent the complete measure of its sacrifice.