THE NATIONAL FINANCES.

New Zealand Herald, Volume LXIX, Issue 21100, 6 February 1932, Page 8

THE NATIONAL FINANCES.

The confidence with which estimates were presented in the Budget last year is missing from the official review of actual results for nine months of the financial year. Official deductions from the figures are extremely hesitant, and neither the Minister of Finance nor the Treasury officials venture to make a public forecast of the final result at March 31. Surveying.a corresponding position a year ago, the Prime Minister concluded that the accounts would close with a deficit approaching £750,000. The actual deficit was £1,639,000. According to the final estimates of this year's Budget, revenue was expected to exceed the actual receipts in 1930-31 by £1,597,000, and expenditure to be reduced by £BI,OOO, both sides of the account being inflated by provision for £1,100,000 in unemployment fund subsidies and £115,000 in hospital and fertiliser subsidies. Those estimates were presented on October 6, leading to a forecast of a surplus of £38,000, and consequently an improvement on the previous year's result of £1,677,000. Three months later, the accounts disclose that the position is worse to the extent of £1,266,000 than at December 31, 1930. Mr. Stewart mentions deficiencies in revenue —from customs, land tax, stamp duties and railways —amounting to £915,000; he indicates that expenditure will be in excess of estimates on account of interest and unemployment fund subsidy; the only redeeming feature is that departmental expenditure is apparently £190,000 below the appropriations. Thus, at the moment, there are indications of a deficit of at least £1,000,000, without allowing for shortages in income tax payments or the failure of the Post Office to earn profits exceeding £1,000,000. It is not surprising that the official statement is reticent. The Budget was based upon extravagantly optimistic forecasts of revenue and absurdly exaggerated statements of the effect of economies, so that the Government has for nine months pursued the illusion that it could balance the accounts with revenue rapidly shrinking and expenditure proceeding at the old inflated level. Excessive staffing, extravagant administration and wasteful methods have not been seriously attacked. They have been allowed to continue until the Budget has been wrecked, and even now the Government has delegated to a commission a task which is essentially its own responsibility. It is useless for the Government to imagine that the gap in the Budget can be filled by making fresh demands on taxpayers. Already the practicable limits of taxation have been passed, and rising rates are producing falling returns. The commission may be able to offer useful advice later, but there is an imperative obligation upon every member of the Government, whicfr ought a great deal that the commission has still to discover, to curtail the expenditure in every department under his control. If Ministers had been sufficiently resolute and zealous, there would be no possible reductions for the commission to recommend. 'They have allowed their departments to spend too much, instead of compelling them to adjust their activities to the funds available. The result of this lethargy is that there will acain be a large deficit in this year's Budget, arid unless action is taken prompt!}' and decisively, efforts to balance the accounts in 1932 will be hopelessly prejudiced.