Grey River Argus FRIDAY, August 24, 1934. THE BUDGET.

Grey River Argus, 24 August 1934, Page 4

Grey River Argus FRIDAY, August 24, 1934. THE BUDGET.

The first items to catch the public eye in the Budget may be the minor exemptions and two-penny cut in wages tax, the five per I cent, restoration of old age pension and public service salary cuts, the provision of about three and a-half millions for public works, and the proposal to load the job of meeting the mortgage crisis upon some sort of a “national corporation.” Taken with these alone, the Minister’s estimate of a balance in next budget might indicate quite elever Coalition finance. But it is all quite misleading as a criterion of the real financial position. There is another side to the picture than that of increasing revenue. There is not only the hole which taxation has made in the national income. but also the growth of the public debt beyond three hundred and two millions, the very large floating debt, the use of .yet more reserves, the failure to stabilise I lie superannuation funds, the diversion of specific taxes to general purposes, and, above all, the conjuring trick whereby the Tleserve Bank is drawn as a curtain over the exchange liability. Thus

the balancing of the budget next year will not be such a contrast to this year’s £700,000 deficit as it might at first, sight appear. The Government is merely covering up its mistakes, although to say so does not necessary mean that such relief as that proposed for the poorer people is questionable. It is, indeed, as meagre as it is belated, and likewise the cut restoration for the public servants. These are but a modest response Io (he unanswerable plea of the Labour Party on behalf of the pool - and to the strong feeling prevalent against the exaclions from that largely increased seelion of the community. The action taken regarding the public seivants contracts with the recent statements of the Government spokesmen that anything of the sort now would be premature. The reason assigned, that revenue is better, is not confirmed by the general financial position, so-that if the thing itself is now possible, it should have been far sooner; but the truth is that the eiits policy was never called for. and is to-day the greatest obstacle 1o a real ibcovery. X<> doubt, that is at last realised only too well, but the suspicion

will remain that if a general election could be postponed for two years, instead of one, Ihe Budget would have postponed any relaxation of the pauperisation policy for yet another year. As the Minister admits, the increase in income among the earning and aged and more youthful classes will reflect itself favourably for others as well. It is a pity that idea did not prevail before purchasing power dwindled away. There is not much to cheer over in the public works policy, even if it is a liltle less stagnant. The national mortgage corporation is going to the a questionable experiment. It looks like an essay in high finance. Bonds just now arc not altogether so buoyant as they might be, but if another huge issue is launched in the country. there may result a far greater degree of uncertainty about the security than there is about even that of the mortgages which such bonds would be designed to render saleable on the stock exchange. That sort of finance has been coming cropper after cropper all over the world, and it looks mighty like the last resort in the crisis of New Zealand’s inortgagehold. The Minister says the project is too big for this session, and it remains to be seen what session will be able to cope with it. This Budget, leaves things largely as they were, and the best that can be said for it is that it may be a straw that shows a change in the wind. Our financial .edifice, however, is now such that we have to look out for the whirlwind !