BALANCING THE BUDGET.

New Zealand Herald, Volume LXVI, Issue 20234, 19 April 1929, Page 10

BALANCING THE BUDGET.

Proposals that will have tho effect of producing a surplus in next year's Budget were forecast by the Prime Minister in his announcement that last year's result was a deficit of about £550,000. This may bo a hint of additional taxation, a promise of stricter economy in expenditure, or merely a suggestion that revenue from the present scalo of taxation may expand under more prosperous conditions. There is, however, one aspect of the deficit which deserves further consideration. In 1927-28 the Budget received from the Post and Telegraph Department a net revenue of £1,026,000, out of which had to be paid whatever interest was due on the capital invested in the department. In accordanco with legislation passed in 1927, the Post Office at the beginning of the financial year entered into an independent budgetary status, its only obligation to the Consolidated Fund being the payment of £425,000 in respect of its capital liability. This separation is in accordance with tho policy by which the railways were given an independent budget, as had previously been done in respect of other commercial undertakings, and particularly it appeared to establish (he principle, which has been strongly advocated in Britain, that the Post Office should not be used as an instrument of taxation. The effect of tho change, however, was to deprive the ordinary Budget of at least £600,000; had it been postponed, there would not have been a deficit. A vigorous protest against this alteration was made by Sir Joseph Ward when the legislation was before the House, and, though he may not contemplate reversing it, inquiry might usefully be made by the Government to ascertain whether any real advantage has accrued to the public, and especially to taxpayers. The Budget has sacrificed at least £600,000, and that money has been retained by the Post Office. To what uses has it been or will it be applied? There has not been arty compensating reduction in charges for services, and if the department is now meeting such charges as depreciation of its assets from its profits, there should be apparent relief in the ordinary Budget. Some explanation should be given to taxpayers before they are asked to provide for a surplus in the coming year, when the deficit now disclosed seems to be attributable to a sacrifice for which the public has not received any appreciable compensation.