Grey River Argus SATURDAY, April 30th, 1932. OVERSEA INTEREST TOLL.

Grey River Argus, 30 April 1932, Page 4

Grey River Argus SATURDAY, April 30th, 1932. OVERSEA INTEREST TOLL.

Despite the suggestion in his latest statement that the orange of taxation in the Dominion has not been squeezed quite dry, the Finance Minister does not disguise the fact that the pips are beginning to squeak. The Consolidated Fund has since the starting of the retrenchment policy been saved over ten and a-quarter millions, but the fact remains that another raid upon the reserves is going to be made to the extent of a couple of millions in order to reduce the prospective budget, deficit to a similar amount. It can be said that the Government has gone the limit in its exactions from the workers, and the Minister admits the point has been reached where the effect of any fresh imposts upon the less wealthy section of the community will be an actual lessening of revenue owing to their reduced capacity to pay. Moreover, there is the reduced capacity of the public to buy, which the Ministerrealises to be a danger for traders, and likewise, through their lessened taxable capacity, for the Treasury, not to mention the effect of curtailed purchasing on customs and other revenue, as well as the lowered living standard. The public service wages cuts are not fully indicated, but only the total of the first ten per cent, reduction, which lessened spending power by £1,390,000 per annum. The second cut will make another big encroachment. The large reductions in departmental votes have meant the sack for a great many, and curtailments in public services have been a tangible loss for many more. The position, in fact, has, in spite of all attempts to conceal it, become now more akin than ever to that in Australia, where, equally in spite of political protestations, the question is now more than ever whether the country can pay the oversea moneylenders their full pound of flesh without any reduction for the future. It is worthy of note that the Finance Minister is presuming another saving of £600,000 towards the next budget through an anticipated extension of the moratorium upon the war debts. It certainly comes in very helpfully, even though the Minister at first asserted he would prefer to do without such 'a benefit. The Australian situation has a special interest for us, because we may stand tomorrow where that country stands to-day. The Victorian dissolution is due to the fact that the idea of securing at once either a moratorium, or a substantial interest reduction, upon oversea debt has gained ground in that State. It is an idea that is very widely and increasingly held in New South Wales, and the Queensland elections are likely to show it is growing in that State also. As for the other States, they all need and would welcome such a relief. Needless to say. too, it is just the thing with which New Zealand could do to-day, and which she may have to go after urgently to-morrow. At anyrate, there has now been a general application of the principle itself to nearly all debts within the Dominion—although a certain favoured few are being allowed to please themselves in a certain degree—and the next logical step is to ap ply the principle to the oversea debt. It is the Governmnt’s present expedient to boast that it raised a loan in London, but the amount going yearly there in interest was already far more than enough in the prevailing stringency, so that a matter the Ot-

tawa Conference could consider with as much prospect of advantage as, say, a Dominion monopoly of the meat market in the Old Country, would be a reduction of interest on Dominion oversea debts. Why it is quite in order for Britain and every other European debtor country to agitate in many directions for cuts in the interest on their oversea debts, or indeed for actual cancellation, and at the game time is considered infra dig for New Zealand or Australia to even moot the same thing to the London money-lenders has never been explained convincingly. Tributes are paid bankers by our Ministers, but they know well that no accommodation from that quarter is given without a financial consideration. At anyrate, once the last tangible savings of the State have been used up—“hypothecated” is the Minister’s way of putting it, but the result is the same—then, if Ihe Treasury remains as empty as at present, it will be a case of Hobson’s choice. Had the Coalition not put all of the eggs in the basket of retrenchment, but endeavoured to build ' up production by deeds instead of words, the outlook must have been better than it is. The further that the Government has gone the further away from a recovery does it seem to be. We have had everything retrenched but one thing, and that the biggest outgo of all, and it will soon be a very serious question as to whether so much can continue to be sent away in the way of interest at a time when the return is more than ever one of less than nothing at all.