THE New Zealand Herald AND DAILY SOUTHERN CROSS TUESDAY, JULY 22, 1930. POLICY FOR THE TIMES.

New Zealand Herald, Volume LXVII, Issue 20622, 22 July 1930, Page 8

THE New Zealand Herald AND DAILY SOUTHERN CROSS TUESDAY, JULY 22, 1930. POLICY FOR THE TIMES.

The policy needed in New Zealand to lit the times has been clearly indicated by the Prime Minister. The first statement of moment he made after assuming office said bluntly that all was not well with the country. The point was clinched by the prediction of a £3,000,000 deficit at the close of this financial year if measures were not taken to balance the accounts. Mr. Forbes showing courage by his statement, declared that he was prepared to face the position. Economy was the new note. Within the past few days the Prime Minister defended himself against a charge of undue pessimism in warning the country of what he saw ahead. He reiterated his contention that the hard road of economy must be travelled, and asked for the co-operation of the people in the work that he must do. He would stand a much better chance of receiving co-operation if he showed more signs of attacking the task in earnest. The prospective loss in the railway working account was an outstanding feature of the financial review. Following this a start was made by shortening staff and curtailment of train services. The train "cut" has already been shown to have amounted to very little in effect. The reductions at the workshops arc admitted by the Minister of Railways to have done no more than bring the strength down roughly to what it was before extra men were taken on last year in the endeavour to carry out a rash promise to provide for all unemployed within five weeks. The dismissals have been confirmed, but there is a virtual promise there will be no more. It is painful to think of men being put off, but the circumstances in which the process has ceased are significant. Labour is the real master of the country, and at its behest other measures of economy may easily be abandoned as readily as that which the Government tried, in the endeavour to profit by the labour-saving equipment and lay-out of the new workshops. The weeks go by and the country is drifting along to a serious deficit at the end of the year. New taxation is proposed, but on the Prime Minister's own estimate cannot be sufficient to meet the position. This country has about reached the limit of its taxation resources. The burden already carried is the principal obstacle to the economic recovery which alone will bring an issue from the troubles pressing over New Zealand, troubles threatening to bring a situation as serious as that which Australia is facing. Increased production from the land and stringent economy in all departments of the State are the only sure remedies. The Government temporises over measures of economy, and hampers the increase in production by heavy taxes, and the threat of new taxes. Whatever view is taken of the economics of primary production, nobody can seriously contest the proposition that a reduction of overhead costs is the surest way of increasing the area over which effort is spread. This development, in other words an acceleration of land settlement, is the outstanding need. The intensity, or (lie level, of production has shown a remarkable increase. It is painful to think what would have been the position of the country, with the fall in export values, but for this happening. The process cannot continue for ever. In the meantime, what should be the natural growth in the area of production should be proceeding with equal speed. It is not, and there is no disguising the fact. There is very little use in the Government paying lip service to a policy of settlement when it shows no signs of providing the most essential preliminary to its execution, a reduction of overhead by effective economy. The Prime Minister, remarking recently on a slackened demand for the land bought and offered for selection, attributed it to the fall in prices for produce, especially wool. At best this is only half the explanation. The other half has already been stated, the failure of the Government to grant primary industry the relief that is its due now its returns from sales abroad have become unavoidably smaller.

To reduce the position to its plainest terms flic country must accept measures of real economy, and settle down to living within its means. The present Government came into office on a policy of borrowing to assure speedy prosperity. If there were any delusions about the logical end of that process, Australia has supplied the evidence to dissipate them. The Covernment cannot pretend to be facing the position unless it reconsiders the programme it proposed to finance by loan money from abroad,

especially the railway projects which promise nothing but an addition to an already staggering rate of working loss. That is to safeguard the future. For immediate needs a curtailment of departmental extravagance is imperative. Reorganisation and reduction, to prevent overlapping and eliminate waste, must be faced. It is not enough to warn the departments that estimates must be kept within bounds. The Prime Minister says this has been done, and appears to think the ends of economy have been adequately served. Superfluous activities, which come into being almost unnoticed, should lie reduced with a strong hand. Can it be proved that the books, returns, and masses of statistics continually pouring out are indispensable in times like this? Is every department innocent of overstuffing? The phenomenal growth in personnel during recent years hardly suggests it. Public buildings continue to go up in response to local pressure, post offices being especially noticeable. The Prime Minister prefaced his tenure of office by a courageous financial statement, accompanied by an indication that adequate measures would be taken to meet the position outlined. Unless his Government displays equal courage in applying the necessary remedies—a thing it shows no sign of doing at present—it will stand condemned out of the mouth of its own leader. National economy, comparable with that an individual would perforce exercise in similar circumstances, is the need of the times. Those who will not apply it unflinchingly must make way for others more capable or more courageous.