Nelson Evening Mail WEDNESDAY, AUGUST 8, 1928 THE COUNTRY’S FINANCES

Nelson Evening Mail, Volume LXI, 8 August 1928, Page 4

Nelson Evening Mail WEDNESDAY, AUGUST 8, 1928 THE COUNTRY’S FINANCES

TAKING a general survey of tho position it- seems to me that when the present heavy programme of capital expenditure is completed in the next, few years, the then Minister of Finance should find himself in the huppy position of being able to more rapidly reduce our war debt and also taxation, provide more funds for land settlement, and view with a less reluctant eye reasonable demands for improved social services. In these words the Minister of Finance (the Hon. W. Downie Stewart) gave a

“final survey of the position” in presenting the Financial Statement to Parliament last night. It was not expected that the Budget would present any great surprises. The financial position had been already disclosed by the Minister from the public platform and in the official “Gazette.” Despite, a decreased revenue of £188,245 a surplus of £IBO,COO is shown. A gratifying feature is the decrease in departmental expenditure of £90,000, and while critics will say the decrease should have been greater, the Minister emphatically denies that there has been any extravagance and affirms that the strictest economy 1 within reason has been practised. Tim much-needed diminution in tho volumoj of imports—especially of luxuries —is re-

fleeted in- the decreased return from Customs duties upon which, it must bo romombered, remissions were made Inst year. The general depression, too, resulted in an inevitable falling off in the revenue from income-tax.

There has been much criticism of the increase in the country’s indebtedness since the Reform Government came into office, even allowing for the fact that the total was greatly added to by .the War Debt. The Minister has frequently emphasised that essential developmental works such as hydro-electric installations and railway extensions (of which Nelson district has had such a paltry pittance) could not be gone on with without further borrowing. He now points out with satisfaction that the net increase in the public debt in the past year was about SJ) millions, as compared with 11 millions three years ago, and 7 millions two years ago. He regards this as demonstrating that the Government, is proceeding resolutely with its declared policy of steadily reducing the annual not increase in the debt without, however, in any wav hindering the progress of the large capital works at present under construction. Regarding the oft-heard demand for economy, the Minister frankly states ho is averse to making any promises of great economies aS he cannot see how any substantial savings can bo effected while the demand for increased social services is so insistent. On this subject he comments: “It is not the extravagance of the Government that is at fault, but the almost universal belief that the resources of the Treasury are bottomless.” That remark will probably appeal more to his colleagues and than to the Opposition. The estimated revenue for the currentyear is £23,868,250, which is expected to exceed the expenditure by £260,146. That estimate is certain to cause a renewal of the demand for a reduction in taxation and especially in the incometax, although it should bo borne in mind that the £260,146 is subject to expenditure on supplementary estimates and contingencies, as usual. Many close students of economies are confident that a reduction in income-tax, would hasten a return to that prosperity which we believe is assured. But it is clear that no such reduction is likely at present. The extract from lhe Minister’s final survey of the position indicates that. Ho is more explicit in another passage in which, it is of great interest to observe that while claiming the general incometax to be comparatively low, he admits that,-the company income-tax is high, and that this “is a fact which should not be lost sight, of when the national revenue warrants a general reduction in taxation.” Moreover, Mr Stewart, -who 'is. generally regarded as the most .able member of tho Ministry —“the brains of the Cabinet”—confidently predicts that increasing prosperity and the increased revenues to be expected as a result, should enable a reduction in taxa-tion-to bo made in the near future. He, however, does not- think the margin in sight is sufficient to render a reduction for this year either practicable or safe. The Minister’s caution appears to be warranted; his prediction of increasing l prosperity justified.' More land settlement and greater production 7rom land now occupied and not made tho best use of will expedite the return of that prosperity.