THE New Zealand Herald AND DAILY SOUTHERN CROSS TUESDAY, DECEMBER 29, 1931. ECONOMY AND THE EXPERT.

New Zealand Herald, Volume LXVIII, Issue 21067, 29 December 1931, Page 6

THE New Zealand Herald AND DAILY SOUTHERN CROSS TUESDAY, DECEMBER 29, 1931. ECONOMY AND THE EXPERT.

With the announcement just before the holidays of a plan for the pooling and control of foreign exchanges came a statement that a special economy commission would be appointed shortly "with a view to assisting in the planning of a programme for next financial year. Since the exchange scheme bears directly on ordinary commercial and financial operations, it has naturally received most attention. Yet this other proposal, explained as following the budgetary effect of what the Government is doing, is a very significant development. The word commission, deliberately used, can only mean that the Government proposes going beyond Parliamentary ranks for advice and assistance. This will be no recess committee, but a body on which the non-politi-cal expert will have an opportunity to serve. New Zealand is now on the same road as that travelled by Great Britain and Australia. In both these countries the problem of making ends meet has been submitted to men who could review the national finances with the complete detachment the active politician can seldom, if ever, achieve. In Britain the expert committee, now commonly known as the May Committee, was the body which brought home to the public with arresting force the peril ahead if public finance was not taken firmly in hand. It is not too much to say that its report was the strongest single factor in producing the National Government and making possible the policy it has pursued.

As New Zealand has followed the course of Britain and Australia, it is easy to forecast what the result will be if the commission is rightly chosen and given a suitable order of reference. On the known facts it must tell the Government and the people that New Zealand nmsfc come down to fundamental principles and live within her income, because there are no other resources to look to for public expenditure. If the income is likely to be insufficient to meet all the demands commonly made on the public purse, then some of those demands will have to be rejected. In fact, this commission might very well take an entire paragraph from the report by Sir G. E. May's Committee as its guiding principle, and as the keynote of its advice to the Government. That paragraph says: "Existing financial difficulties make it necessary for the nation, like the private individual, to consider seriously what it can afford, and not merely what is desirable. Reviewed from this standpoint, much expenditure is unwarrantable at the present time, which, under more favourable conditions, we should deem justifiable and even a wise investment of the national resources." "With such principles in mind the Slav Committee dealt boldly with the national accounts, and recommended economies from which many of the politicians recoiled in dismay. The Government which could not agree to implement the report fell to pieces. The section which went to the country deriding and denying the need for-tire -course advised suffered one of the most spectacular defeats in the history of British politics. Even more recently the Australian Government which accepted only grudgingly and in part similar drastic and salutary advice was swept from power with equal emphasis. Since the New Zealand Government is asking for outside advice to the same end, that of balancing the Budget within the limits of a seriously depleted income, its cue is plain. It has a mandate in advance to deal firmly with the national finances, and its duty is to accept without faltering the prescription the experts will write.

The three countries considered have needs and prospects in common. A common feature has been the way in which all three Governments have sought outside help to decide what measures of economy are needed, and how they shall he applied. The first impulse is to agree that it has been a very sensible course. So it has, once the implied confession of weakness has been made. For surely it is a weakness of modern Governments, at least as exemplified by these three countries, that there has been little disposition to ask the advice of experts in committing them to schemes of heavy expenditure. Only ( when the inevitable consequences of mortgaging the future for the benefit of the present have accrued do those really responsible to the public seek to buttress their decisions by the views of outside experts. In other words, the politicians have not asked for help in the popular business of spending money and distributing largesse. The prosaic, unpalatable task of curtailing expenditure, of limiting the stream of benefits, is the one to prove, by implication, beyond their powers. Of course it is neither accurate nor wholly fair to visit (his situation entirely upon the politicians. The community must bear its share of responsibility. Long periods of prosperity have bred a generation accustomed to consider ihe coffers of Ihe State inexhaustible. The politician prepared to promise most has been most favoured. The voice of those who warned the public, against the inevitable result at the first breath of serious adversity has been a voice crying in tlx l wilderness. The simple truth that what a Government gives free of cost to the recipient must eventually be paid for by somebody, that in the end it is paid for by everybody, has been lost to sight. It' expert advisers, in addition to devising means of" meeting the present emergency, can also bring home those truths as a guide for future days of greater prosperity, they will do a great and useful work. Somebody must do it unless, in the words of the May Committee, "democracy is to suffer shipwreck on the hard I rock of finance.