The Guardian (And Evening Star, with which is incorporated the West Coast Times.) WEDNESDAY, MARCH 20, 1940. ECONOMIC POSITION.

Hokitika Guardian, 20 March 1940, Page 4

The Guardian (And Evening Star, with which is incorporated the West Coast Times.) WEDNESDAY, MARCH 20, 1940. ECONOMIC POSITION.

The recent statement by the Minister of Finance indicated that the ordinary finances for the present year, ending this month, were likely to approximate the estimates.' While this is a somewhat remarkable, achievement in all the circumstances, the world position is such that it does not give a guarantee for tire future that all will be well. Indeed, .Mr Nash forecast a much • heavier expenditure due .mainly , t:. war expenses, and, while borrowing in part will be necessary, fiuther taxation appears inevitable. However, the Government is receiving something of a windfall in the interest free loans now rolling in.- Large sums are being offered by patriotic .companies, firms, and individuals with the cash to spare and there is the- promise cf . this new souice of income reaching high fig-'' nres. For the time being at all events it will be a pallative, avoiding borrowing at interest rates, or imposing additional taxation. But the debt will be there to be redeemed in due course, and ns most cf tho money will go for. defence purposes there will not be any very tangible asset remaining, and ways and means will require to be devised to repay the capital. Nevertheless if with the aid of this free money New Zealand can assist to pave the way, to victory, as was the case in helping to end the career of the German pocket-battle-ship of which so much was expected, it will be all the easier to repay the money. All this, however, takes no note of the financial policy which is to govern the Dominion's immediate and future operations. Thanks to the -cash business being done with Great Britain, New Zealand goods are going overseas as quickly as despatch will permit, and the country is being recouped promptly. This enables a generous level of expenditure along peace lines to be maintained. But it becomes a question for consideration, following experience .in previous years, as to the amount of control which! should be exercised over the general expenditure to provide in advance for the aftermath of the war. The How of exports will not be so intense, nor the market so stable. The state of the world into which it. is drifting while countries a re- maintaining expenditure at an enormous rate, will he dislocated wlu'ii these tremendous outgoings cease, and an endeavour is made to settle down to more peaceful pursuits. The dislocation of trade and the rehabilitation of labour, with the settlement of- the soldiers back in civil life, Will cause, as" was the case before. great changes and require much can ful handling of funds for practical purposes. The Government has been very fortunate in building up its policy so far, hut the supply of funds must be limited in the* future, for 'that time of stringency preparations should be taken in band betimes. With other countries depreciating their currencies or going into debt unduly, the trading intercourse must be affected also. Normal conditions will lie at slake when funds cannot be found for needs and it can lie realised New Zealand's exportable goods will fall in price That stringency will reflect through the producers, and on throu'di all classes, for the Dominion is very dependent on its overseas markets—where it requires good prices and sustained demand. These conditions may dis-

appear for a time, and the possibility of such a visitation should ensure tho foresight to meet it.