BUOYANT FINANCE.

New Zealand Herald, Volume LX, Issue 18381, 23 April 1923, Page 6

BUOYANT FINANCE.

The state of affairs disclosed in the Prime Minister's statement of the Dominion's finances' during the year ended at March 31 last is one about which he may well be jubilant, and upon which he is to be most warmly congratulated. To be able to show a surplus for the year of £1,315,683 is an achievement of which any Minister for Finance in this country may justifiably be proud. An improved condition of affairs in the Dominion has reacted beneficially on the national exchequer; but the year had its financial anxieties. They have been faced with combined caution and courage. In considering the main items of the statement, due regard must be paid to the fact that the amount raised by land and income tax, £5,373,434, shows a decrease of £2,267,369 on the amount collected last year. • This is due largely to decreased taxable incomes, and but slightly to a lower rate of taxation. The rate of tax is still a crushing handicap on the Dominion's industry, and the point arises to what extent does the favourable balance now presented justify reduction. On the figures it is evident that Mr: Massey could have balanced his Budget on a basis of approximately 5s 6d in the £ of maximum income tax instead of 7s 4d. The current year begins with a surplus of £1,315,683. That being so, Mr. Massey could now, with a wide margin of safety, announce a reduction of the income tax rate to at most ss. Such an announcement, if made at once, would give a marked impetus to industry and trade throughout the Dominion. A noteworthy contributing factor to the year's result has been a reduction of expenditure by over two and a-half millions. This is the result of all-round economy, but there are items in the list, such as the severe restriction of necessary railway services and the practical annihilation of the defence vote, which have reached their limits. Such means of saving cannot be used repeatedly, least of all in a growing country ; and other means must be found of effecting the economy that the future will demand. The expenditure on public works, £3,850,048, taken together with, the fact that the public debt has not been increased, gives also some cause for

gratification. , Yet, in this item, it must be borne in mind that it represents, all things considered, no advance on pre-war expenditure ; and that, while credit must be given for a strict husbanding of resources, there is a limit, as in other channels of expenditure, to advantageous economy on public works. They have an investment value; and , the spreading of the public debt is even more important than its reduction. Taken ' in . all' • its bearings, Mr. Massey's statement, however, will strengthen confidence in his administration. A wise persistence in the economical course ho has pursued, coupled with a reasonable measure of relief in taxation, will help the Dominion further on the way to renewed prosperity.