SHORTENING SAIL

Hawera Star, Volume L, 20 December 1930, Page 9

SHORTENING SAIL

Government To Take Action

DRASTIC ECONOMIES PROMISED

Overhaul of State Departments

Inquiry Into Dairy Industry Conditions

(Bv Telegraph—Special to '“The 'Star.”) WELLINGTON, Dee

As part of a determined effort to balance the Budget and reduce cost, the Government has set up a special economy committee to make a drastic overhaul of all departments, from the Prime Minister’s downwards, to investigate and report from time to time to Cabinet on the further limitation of, and economy in, Sate services.

A special committee has been set up by the Government, the personnel being’ Hon. Sir Apirana Ngata, Hon. R. Masters, Hon. W. A. Veitch, the head of the Treasury and the Public Service Commissioner.

In « statement released to-day, following continuous long sittings of ’Cabinet, Hon. E. A. Ransom, ActingPrime Minister, said that the present economic position, duo principally to. the decline in the value of the Dominions primary products, was' engaging the active attention of the Government. 'The decline of export values lwas not peculiar to New Zealand, but was evidence o'f the fact that, world prices are tending progressively downward®. The country was, therefore, paid at present with a substantial reduction in national income and 'they would have to adjust expenditure accordingly from the point of view of the public accounts. The Government was faced with reduced revenue from both Customs l and land and income tax, from railways, and in- fact from all heads of revenue during the year. On the other hand, debt charges, pensions and other statutory payments of a rigid nature had resulted in additional expenditure. The position was a most difficult one for any 'Government to face, but 1 Cabinet was bringing the whole economic situation under review.

Lciwer prices 'for our primary products in the world’s markets had to be met by lower production costs'. The Government fully recognised that the question of lower rates and taxes 1 was involved in this pressing problem and the special economy committee set up would make & searching investigation and overhaul of aM departments of State from the 'Prime Minister’s downwards.

CONDITIONS IN DAIRY INDUSTRY

“The Government has had under consideration the general position of the country in all its aspects and while it recognises the grave difficulties of the situation due to circumstances and conditions perhaps unprecedented in the history of New Zealand, it deprecates, uiy attempt to exaggerate the; position or to stampede the country into hasty and ill considered solutions,” continued Mr. Ransom.

“In the first place, on two questions that! have excited’ discussion in the Press and at conferences, and even elicited tentative pronounements from .public men, namely the fusion of political parties and the formation of a National Cabinet and the early summoning of Parliament, Cabinet teois that these are matters, that must await the. return of the Prime Minister, who is entitled to. a dominant voice in their determination so far as iris Government and political party are concerned. Then, in regard to the demand for an immediate assembling of (Parliament., ministers do not consider this step either necessary or wise at this juncture. I have recently announced | the view of Cabinet and the Prime i Minister lias definitely declared from England that a moratorium is undesirable. These views are supported by the State loan departments, which provide nearly one .half of the total amount of finance for farmers and who say that there is not at present such a pressure from their clients ais would justify the application of a moratorium, even if that kind of remedy were desirable, which they emphatically deny. “The Government, thinking that a diagnosis of the condition of each section of industry was necessary and that it 'should be carried out in a, sane and practical way has, as a beginning, approved the setting up of a committee of experts in the dairy industry which would, determine the extent to which

that industry is embarrassed and suggest the form of assistance required. The trouble may he far greater tn.an is realised, or much less than general statements make out. It is recognised to be serious enough, owing to the severe fall in the price of dairy produce. but the perturbation of many dairy farmers may rather I>© in anticipation of the effects upon their financial holdings of the slump in prices than in consequence, of extreme financial pressure applied by mortgage®. “The committee suggested to investigate the condition of the dairy industry will consist of men who are intimately acquainted with the position of dairy farmers in their respective districts. The Department of Agriculture iw getting into touch with; men whose names have been suggested. The committee will be asked to meet in Wellington early in the New Year and to carry out their investigations with all despatch. It Is hoped that on the Prime Minister’s return the actual position. with Cabinet recommendations, will be ready for action.

“Those in the pastoral industry have made no direct approach to the Government for assistance. The Government took the precaution a month ago to consult with the government directors on the bank of New Zealand, who advised that not only was a .moratorium undesirable but unnecessary at present. The Government gathered that although banking figures showed the strain on the resources of all banks, accentuated in cases by the greater financial difficulties of Australia, all possible steps were being taken to maintain the strength of mercantile firms and station agents to support land owners and to assist farmers where they had exercised care and economy in the management of their farms. The Government recognises, as well as y.Lads of financial institutions and business men, that farmers who overreached themselves in the purchase of estates, or in expenditure, and have had! difficulty in normal times in meeting current obligations, will experience extreme hardship. “The Government is prepared to meet delegations of each branch of industry, which should he ready to state its actual and detailed difficulties and its suggestions for the minimum assistance required of the State.

PUBLIC FINANCE. “The position of the public finances is appreciated by the Government and lias been the subject of the closest scrutiny and consideration. Revenue has fallen at a much greater ratio than expenditure, due to the same causes that have affected all branches of industry, and more especially the primary industries. The charges on the Consolidated Fund cannot, within the financial year, he shortened to the extent that will take up the decline in revenue owing to the heavy rigid annual outgoing for interest, pensions and special permanent items that are the accumulation of a generation of Parliamentary and Government action in the anual appropriations for services. The first overhaul of the departments’ made last month, at the earliest available moment after the close of the session, revealed the extreme difficulty in the face of sectional demands by institutions and the public iu curtailing, deferring or cancelling the expenditure of items voted by Parliament. The economies proposed in certain departments, such as Defence and the working Railways, will not he materially effective within the financial year.”