THE FRUITS OF ECONOMY.

New Zealand Herald, Volume LX, Issue 18297, 13 January 1923, Page 8

THE FRUITS OF ECONOMY.

There is remarkable evidence of the Government's success in economy and of the rising prosperity of the country in the statement of the public accounts for the nine months ended December 31. Whereas the Budget forecast, as modified by reduction/ of taxation and by the addition of the Supplementary Estimates, pointed to a deficit for the year , of ; £2,794,806, Mr. Massey now expects that the account will balance on March 31, and :an examination of the figures suggests that'this is a cautious view of the prospect. ; For the full year, the Estimates indicated a decline in revenue of £3,046,505, and a reduction in expenditure of only £591,530. Actual results at every accounting have shown these forecasts to have been unduly cautious. At the end of nine months revenue has increased by £984,340, while expenditure has been reduced by £2,545,930. The contribution of each quarter to this results is shown by the following summary of the differences between the accounts for. the current year and those for the previous period:— ;

The recovery in revenue during the third quarter has surprised, the most optimistic anticipations. Combined with the continued effects, of economy, the last three months have contributed more to the improvement of the accounts than the first .six months of the year. The projection of these tendencies over the current quarter suggests a conclusion that seems almost too attractive to be attainable. Yet a conservative estimate fully confirms Mr. Massey's hopes •of a balanced budget. In view of the manifest buoyancy of the revenue, it is reasonable to anticipate that the current quarter's revenue from general sources will be no less than in the corresponding quarter of last financial year, while there will be a margin of safety in setting against it the whole of the estimated loss on income -£2,670,000. By that calculation, the year's revenue should be at least £26,680,000. On the other hand, expenditure should again l)e lower during the current j quarter, but without allowing any reduction, the total for the year would be £26,161,000. Hence instead of a deficit of £2,794,000 the present positiori points to a. substantial surplus. ■" y There is, however, no justification for relaxing the control on expenditure. The whole structure of national finance rests upon the insecure foundation of excessive taxation, and until it has been strengthened by reducing taxation, the size of the year's surplus will be a measure of the Government's failure to serve the country's needs. .. - < -

Revenue. Expenditure.. Quarter— Increase. Decrease- Gain. First .. £288,426* 1,512,963 £1,224,535 S»cgnd .. 74.113 357,400 431,'518 Third .. 1,198,655 675,567 1,874,222 Totals .. £984.340 £2,545,930 £5,530,270 •Decrease. .