A WORTHY EXAMPLE.

New Zealand Herald, Volume LXV, Issue 19916, 9 April 1928, Page 8

A WORTHY EXAMPLE.

In a modest message cabled from South Africa there is given an example in the handling of public finances which should be noticed and laid to heart by the Government of Now Zealand. The South African Budget has disclosed a surplus of £1,750,000, a situation described as unprecedented. The virtues of a balanced budget need no extolling ; the benefits of a huge surplus are habitually rated far too high by those who handle public finances. A surplus means that xnoro revenue than was required has been raised. Since taxation is the outstanding source of the revenue, it follows that the demands on the taxpayer have been unnecessarily heavy. The logical sequel to a substantial surplus should be easily realised. It has been in South Africa, for £500,000 ofHhe surplus having been earmarked for debt redemption, the remainder has been utilised to make possible a reduction of taxation. Income tax and super-tax are each to be lowered by 20 per cent., and, as details show, there will be reduction of customs duties on many articles of household necessity. For years past successive Ministers of Finance in New Zealand have been urged to do just these things, accept the inevitable annual surplus as evidence that taxation should be

reduced. ~ : They have regularly refused, to do it, afc least to any substantial extent. Allocations for the redemption of debt —despite the statutory provision for a regulaf amortisation process—transfers to the Public Works Fund, and a substantial carry-over to the succeeding year have been the favourite means of using this product of excessively high taxation. The present Minister, defending the process, has argued lately that it has been necessary to maintain the Dominion's credit on the London market. South Africa has not allowed such an idea to stay the sound, sensible and logical course of reducing the taxation that furnished revenue so much in excess of requirements. The example should be kept very prominently in view by New Zealand for the present financial year.