The Hawera Star. FRIDAY, MAY 30, 1930. GOVERNMENT’S FINANCIAL PROBLEM.

Hawera Star, Volume L, 30 May 1930, Page 4

The Hawera Star.

FRIDAY, MAY 30, 1930. GOVERNMENT’S FINANCIAL PROBLEM.

Delivered every evenine by 6 o’clock in Hawera, Mnnaia, Kaupokonui, Otakeho, Oeo, Pihama. Opunake, Normanby. Okaiawa Eltham, Ngaere, Mangatoki, Kaponga, Awatuna, Te Kiri, Mahoe, Lowgarth, Manutahi, Kakaramea, Alton, Hurleyville Patea, Whenuakura, Waverley, Mokoia, Whakamara, Ohangai, Meremere, Fraser Road, and Ararata-

The review of the financial position of the Dominion, issued to-day by the Prime Minister, does not make cheering reading. From the point of view of Government supporters it is depressing. A fbrecase of a Budget shortage of £3,000,000 would not be a happy augury for the future of a Government numerically strong; for a minority Government it must be a forerunner of the end of its reign. Mr Forbes is to be congratulated upon his frankness and courage, and his personal prestige will not suffer by reason of his act in taking the public into his confidence. But can he expect the country to accord a minority government, such as his own, that solidity and strength of purpose for which he appeals? He warns the electors that there must be a hardening -in the rate of public expenditure, and he shows that he fully understands that sectional ! dissatisfaction will arise as a result of the operation of an “economy policy.” On the figures he has submitted it can bo seen that there is a definite need for Now Zealand to “tighten its belt,” but the Prime Minister’s suggestion that the country should allow a minority government to do the “tightening” and still not murmur is altogether too naive. However, the political results of the introduction of an economy axe can be left to the future. What the public is most concerned about at the moment is the immediate reaction of a shortage in the financial operations of the current year upon itself. In his review of the figures the Prime Minister says that additional taxation is undesirable, but in almost the same breath he makes it clear that the Government cannot hope to overtake a threatened deficit of £3,000,000 by economy alone. If. has been contended by some, with a good show of reason, that what the Dominion needs most urgently is a reduction in taxation to encourage a greater flow of money into reproductive channels, but with the probability of Customs revenue being short by £1,000,000 and a deficit of a million and a quarter in the railways account to be made up, it is obvious that this ideal, desirable as it is, is totally unattainable at present. The Government’s announcement of its legislative programme will be eagerly awaited by every section of the community and it will be most closely scanned for information as to what it proposes to do about railways. Will Mr Forbes, in the light of his appeal to the country to cut its suit according to its cloth, propose to-go on with his party ’s: plans for the completion of the South Island main trunk line—a line which, when completed, is certain to add to the department’s annual interest bill, in addition to absorbing a large sum for construction? It seems almost certain that that ambitious plank in the Government’s original platform must be discarded, and it is significant, in this connection, that Mr Forbes purposes appointing a special commission from outside the Public Service to advise where economies can be effected. It will be interesting, also, to see if the Government can find ways and means of coordinating road and rail transport services. It has been done in England, where both classes of transport are in the hands of private enterprise, but, though there has been much talk of the necessity for the adoption of a similar policy in Hew Zealand, results have been sadly lacking ,and this despite the creation of a Portfolio of Transport. We have before expressed the opinion that a party which came before the electors pledged to cut out unproductive expenditure and get on with the business of developing the resources of the Dominion on truly national lines, irrespective of parochial interests, would capture the support of the public at the next election; at present, however, we have the spectacle of a party which attained office on a promise of lavish expenditure and the certainty of plenty of: cheap money, endeavouring to appeal to the good sense of the public for the support of a policy of economy when only halfway through its first term. This is not quite the same situation as that which we have imagined when we have anticipated a swing-over in public demand from extravagance to economy. ' The electors have been faced by the Prime Minister by a stern necessity for some clear thinking; and good reasoning. followed to a logical conclusion, brings one to the recognition of a double need—the need for strict economy and also development along certain lines, backed up by the majority of fne people. If the country is faced with a season of doing without the extras in order to ensure the provision of necessities, it must first be convinced of the need and then ashed for a mandate—not a silence which may be taken for consent, but a real authority issued through the election-box.