THE PUBLIC FINANCES.

Lyttelton Times, Volume CXVIII, Issue 18353, 10 March 1920, Page 6

THE PUBLIC FINANCES.

is rapidly accumulating to prove the deplorably bad condition into ■which the public finances have drifted »nd are further drifting, and we must pay that it is high time that this subject received the very careful attention of the head of the Government. The Consolidated Fund accounts for eleven jnonths of the current financial year, as compared with the corresponding months of the previous year, show increases of, in round figures, four and b quarter millions in both revenue and expenditure, and the two sides of the ledger nearly balance, the excess of revenue being ; £411,000 for the 191920 period and £344,000 for the 1918-19 period. March being a large revenue month, through a considerable part k bf the income tax coming in, it is probable that the financial year will end with a surplus. There are, however, several disturbing features in the position. One is that while the total revenue has gone up by £4,224,000, the net revenue from the two great publio services, the post and telegraphs and the. railways, has actually shrunk by pome £268,000, notwithstanding that the operations of the departments have grown substantially. This means that the whole of the increased revenue, practically, is tax revenue. Taxation has been automatically increased, and very largely so, through the system of levying Customs duties according to value, the duty rising with the cost of imported articles hr the country of origin, so that two factors •instead of one operate to increase the cost of living. To illustrate this it m%y be stated that the amount of duty

collected per ton of merchandise imported rose from £2 4s 6d in 1914 to £3 12s 6d in 1918, an increased rate of tax equal to 63 per cent. Unfortunately wo have not the tonnage of last 3'ear’s imports, or w© should certainly he able to show that this form of taxation. was aggravated in 1919, when the Customs revenue was abnormally high. However, this is a matter for Parliament. T?he particular blot on the Consolidated Fund at present is that the whole of tho increased revenue, taken, as we have said, for tho most part from the taxpayers, has disappeared through the unparalleled growth of expenditure. We offer no criticism in regard to tho permanent charges—tho oivil-list, the loan charges and payments under special Acts, including war pensions. These charges nr© fixed by Parliament, and the increase of £1,807,000 for the eleven months is unavoidable and therefore quite legitimate- But these account for considerably less than half of the total increase in the expenditure. It is the enlarged cost of running the Departments of State that- w© feel bound to complain about, for this class of expenditure is subject to control and is tho direct responsibility of the Ministry as a whole, tho Minister of Finance in particular, and, of course, the Prime Minister. It is necessary to say again, as we have had to say more frequently than-is pleasant, that tho Government ought to learn tho meaning of the word economy and give the heads of its Departments some definite instructions to begin tho practice of that virtue. For instance, while tho post and telegraph revenuo advanced, through tho growth of business, by £45,000 the expenditure jumped £133,000. In other words, for every additional £IOO earned nearly £3OO was spent—and £2OO lost. The railways earned £660,000 more and spent an extra £840,000. The rest of the Departments apparently determined not to bo out of th© spending, and between them managed to get' through in the last eleven months no less than £2,482,000 in excess of their expenditure in the corresponding part of the previous year. We say that this movement ought to be immediately checked. The Government and its officers have no right to ho spending tho hardearned money of the taxpayers in this reckless, unparalleled, shocking manner. It would be interesting to know what tho Minister of Finance thinks on the matter, if he really gives it any serious consideration. Sir James Allen ought to be astonished and concerned over the position, for it is very different from what he forecasted in his Budget only last September. He allowed for increased Departmental expenditure amounting to £1,726,000 for the full financial year. That was bad enough, in all conscience, but the actual increase for eleven months is £2,482,000, or more than threequarters of a million in excess of the Minister’s estimate for the year. The truth seems to be that nobody is looking after the publio finances. Sir James Alley’s record in this domain of statesmanship was never brilliant, hut he was generally over-weighted with portfolios and ho now Is probably thinking less about ways and means and balance-sheets than about the High Commissionership in London. At all events, the accounts of tho Consolidated Fund contain no indications that the finances of the country are the special car© of a conscientious, capable Minister. Mr Massey,' who is now acting Minister of Finance, is expected to take over that Ministry shortly- If he had the capacity for the portfolio, which wo doubt, he certainly has not the time unless he yields up more of his other responsibilities than w© think he is likely to surrender. Meantime, the long-suffering taxpayers have to carry the burden of war taxes in peace time, increased by circumstances, and await with what patience they may the fulfilment of Mr Massey’s promises of economical administration and reduced taxation.