FACING THE MUSIC.

King Country Chronicle, Volume XXV, Issue 3373, 3 October 1931, Page 4

FACING THE MUSIC.

There is never smoke without fire, and judging by the rumours from Wellington the Prime Minister has the unpleasant duty next week of announcing a further heavy deficit in the national budget. These rumours indicate that the additional deficit to be disclosed will be at least £1,000,000, and will have to be met by additional taxation and further economies in public expenditure. It

•is no use trying to place the responsibility for the present financial and economic position on any particular section of the community or any political party. We have been caught in the maelstrom of a world depression and it is the country that is prepared to face facts and make the necessary sacrifices that will first weather the storm. If we are not prepared to co-operate in the works of rehabilitation, the economic position will become worse, leading.to general chaos in business circles which must inevitably be reflected on all other sections of the community. There is not the slightest doubt that we have been living beyond our means during the last twenty years. In .his remarks during his recent visit to Te Kuiti, the Governor-General stated that this Dominion had been rather too ambitious. This is only a diplomatic way of saying we have been spending beyond our means. Public works have been on a basis beyond our real income, and these could only be carried out by heavy borrowing on the part of the State. An artificial standard of living has been in vogue for the last two decades, and now the penalty for all this extravagance has to be paid. It is not'

one section of the community that is responsible for this, but every section, and it is every section that has to pay. One fact stands out clearly —borrowing has reached its limit in this country—both in regard to State and public bodies, and we will have to live within our income After living on credit so long the new order of things will entail many hardships, but these will be nothing compared to what will accrue if we continue to carry on with the policy which has been in vogue since the start of the war. Yet in face of all the signs of pessimism that are to be seen on every side, there are many factors that allow of optimism and confidence in the future. There are changes taking place in the manipulation of the world currencies, and these are apparently acting beneficially for Great Britain and in turn for the Dominion. The flood tide of prosperity, however, cannot be anything else but slow and will never reach the former high levels. There is also a large amount of leeway to be made up, and this will retard the progress of prosperity for some years at least. In the meantime we have to make plans for a general readjustment of our economic conditions to meet the changes and this calls for the whole-hearted co-operation of all. It has to be remembered, however, that these plans

must be on a less lavish scale than those of the past. Prices will be on a lower level, but should be more stable, and stability is what this country requires to-day.