RETRENCHMENT IN WORKS.

New Zealand Herald, Volume LXIX, Issue 21112, 20 February 1932, Page 8

RETRENCHMENT IN WORKS.

Unofficial though it is, the Wellington, report; of a drastic turtailment in public works activities must, pass the test of credibility. Loan money has lieen the means of pushing forward the programmes of years past. The supply has ceased, hence the programme simply cannot proceed on the old scale. It, is a serious development, particularly serious in that it comes when the infernal resources of the country are so meagre. There can be no escaping the fact that those internal resources will be all to which the country can look for some considerable time to come for nil classes of capital expenditure, public works included. Going beyond the immediate, the social, consequences of this retrenchment which is being forced on the Dominion, whether it likes the prospect or not, there is no doubt that a very drastic alteration of outlook on State investment in public enterprises is involved. It will no longer be possible to pay mere lip service to the principle of confining expenditure to directly reproductive work: it will have to be confined to absolute essentials, and rigid tests to prove the urgency of the objectives will have to be imposed. In the past it has been easy to raise loans by assuring overseas investors that everything was sound and satisfactory. The mass of the people in this country, not appreciating the responsibilities they, in the aggregate, were shouldering, have been ready to applaud the. lavish expenditure. of borrowed money on public works. All that is ended now. The money has to be found in the country itself. Instead of going ahead in the expectation of paying for what is being provided in roughly two generations, it will have to be paid for as the work is done. Consequently the public works programme can be carried on only as fast as the cash to finance it can be found inside the country. That is the stern reality which makes the retrenchment process inevitable. It is not welcome, it cannot be effected without intensifying the problems of the day ; but it cannot be evaded, and there is nothing to gain by refusing to recognise the plain facts.