MANAWATU DAILY TIMES. FRIDAY, JUNE 11, 1920. GALLOPING TO A DEFICIT.

Manawatu Times, Volume XLIII, Issue 1586, 11 June 1920, Page 4

MANAWATU DAILY TIMES. FRIDAY, JUNE 11, 1920. GALLOPING TO A DEFICIT.

Our contemporary, the Christchurch "Sun," points out that it costs a great deal more to run New Zealand in time of peace than it does in war. In prewar days the revenue amounted to about twelve millions annually, half of which was the proceeds of direct and indirect taxation: the other haif being- mainly made up of postal and railway receipts and the earnings of other Government services. Last year the Government took nearly three times as much in taxation as it required in 1914, and the increase in the earnings of the State-owned services is trifling by comparison. But apparently the expenditure has got completely out of hand. The total is about £23,781,924, and there are huge unexplained increases in various departmental totals which suggest that a very grave financial situation is developing, and one that calls for drastic remedies. Why, for instance, should the cost of running the Defence Department jump up £86,038 as compared with 1919? It can only be explained by the retention in public employment at increased salaries of numbers of military officers and others taken on during the war. There is nothing in the international situation to 'warrant the Dominion maintaining a defence establishment costing £502,4t;5 annually, and the sooner the Government realises this the better. Then it will astonish people to know that the cost of running Dr Reakes' Department of Agriculture has expanded from £240,4G4 in 191819 to £BlS,5fiG in 1919-20. The cost of carrying on the Health Department has grown by £238,000 in a year, the Treasurv by £21,824, the Ministry of Internal Affairs by £65,138, the Tourist Department by £12,202, the Justice Department by £38,195, the Customs Department by £40,914, not to mention others equally striking. The Government has pretty well reached the limit of its resources in the matter of taxation. Taxation has reached a point in the Dominion when the persons and firms whose earning power is large have every incentive to inflate their expenditure to avoid returning such large taxable incomes. This is responsible for a great deal of extravagance, which in tarn helps to Keep up the cost of living. The income tax is practically stationary. Yet, unless the growth in public expenditure is sharply checked, taxation even on the present scale will fail to meet public requirements. The taxpayer is finding large sums annually that ought to be provided by the users of the railways and the post office. The expenditure on these departments is increasing much more rapidly than their earning power, and the increases in wages which the Government must now provide for both departments will make the position look far worse next year unless there is a revision of rates and charges to make both the railways and the post office self-suppporting. We agree with our contemporary that Mr Massey is faced with the most serious task that has fallen to the lot of any public financier in the Dominion since the days of Atkinson, and on J could only wish he were better qualified by training and experience to cope with it.