THE ECONOMY CAMPAIGN

Hokitika Guardian, 29 February 1932, Page 7

THE ECONOMY CAMPAIGN

(otago Daily Times) The pressing need of the times is the curtailment of public expenditure in the Dominion. A Government cannot, any more than an individual can, reasonably permit expenditure 'to exceed income. The individual who spends, or incurs debts, to an extent ithat is not Covered by his income, eventually finds himself in the Bankruptcy Court. The nation that is not guided by the safe rule of living within its income is punished by the loss of its credit and in the final analysis its taxpayers 'have to bear the brunt of the effect of its prodigality. The measure of the deficit 'in the public accounts for the Dominion for tho current year can at present only be estimated. The Treasury officials themselves can have merely a faint notion of ithe amount that will be derived from the payments of income tax which are being made this; month. he 'Minister of Finance calculated last -October that the tax would yield (£4,935,000. In the previous year i. produced £4,003.606. Tne f ax i s so much heavier this year 'that it would not be surprising if the Ministerial estimate turned out to be on the con- I servative side, always provided that those on whom the impost falls possess the means ito enable them 'to meet theii obligations. The tax, it is ‘to be remembered, not only increases enormously the demand that is made this year on the payerron the 'higher scales, but is more widely spread than it ha s been at any time in the past. It will have been a mattei of considerable difficulty in the circumstances to compute the amount that iyjll be realised by the tax. F,ypn, how ever, if the yield should be greaterthan the amount of the official estimate jit will be insufficiently large tc. neutralise the effects of the. diminished and still diminishing from ot'hm sources,

Anti, despite the fact that in tin ensuing year the Government- will do live the full benefit of the economies in the- public service that have ahead} been made, it is certain that fre.sl adjustments of revenue and expend) lure have to be devised, The velt'an •of the country demands that tin financial integrity of the Governmen ,shall be maintained, Thii s, as l’rcs: dent Hoover .said in a recent message to Congress, is a necessary factor ii tlie re-building of sound national prosperity, The practicability of raising ndcUitiama] revenues of fconsiderab.c volume is, however, exceed high doubtful.

The payment of taxes has in tlu current year necessitated, in mni.\ instances, an enroachment upon tin reserves of capital that are necessary for the restoration of business activity when the solution of the outstanding; problems, national and international, economic and political, opens tli*. way for an upward movement in tlie trade of the world, This strong!,, suggests the inadvisability ot seeking to secure fresh revenue through tlu channel of direct taxation. But i increased revenue is not obtainable, other reductions in expenditure mus lie effected.

The Government is waiting the interim report of the Economy Commission before it announces its decision on this point, but it must be apparent to it, even if there were no E.-on uinv Commission, that there are various directions in which the pruningknife may justifiable, and some n which it must necessarily, be applied. It is unfortunate that a policy of retrenchment in the Government serviei must- be continued, but it is impern tive '“that public waste and extravagance be firmly checked.