SERVICES AND ECONOMY.

New Zealand Herald, Volume LXIX, Issue 21116, 25 February 1932, Page 10

SERVICES AND ECONOMY.

Four organisations representing employees of (he State, protesting against further wage or salary cuts, have produced proposals which, they contend, would relieve the financial stringency without resort to such a measure. The employees of the Stale are entitled to sympathy if they can show that their salaries are liable to he reduced as a means of avoiding other forms of economy. Any suggestions they can make for other economies should receive full and serious consideration. But the fatal defect in their schedule of proposals is that there is not. one measure of economy among them. One suggestion, the collection of income tax in half-yearly instalments to-reduce interest costs—by reducing the issue of Treasury bills—has something to be said for it. The remainder, unfortunately, has to he dismissed as almost entirely unsound where if is not fantastic. A brief list, but it contains two suggestions for deliberate inflation of the currency and at least two for the repudiation of State obligations. The "fresh internal loan" is an outstanding example. Too much borrowing, and squandering of loan proceeds, is the worst poison working in the State now, and to suggest a further dose of the poison is scarcely helpful. Besides, to balance the Budget is the chief need of the day, and if. is not long since British Treasury experts remarked that, borrowing for revenue needs is the surest mark of an unbalanced Budget. But, after all, the true method to determine the merits of this memorandum is to compare the position and the needs of the State with those of the individual. The income of the State has fallen low, and threatens to go lower yet. What is the remedy when that happens to the individual 1 He is forced to reduce his expenditure within the limits of his income. Only in that way can he avoid bankruptcy or worse. There is no magic device by which the State can be exempted from the same procedure to regain financial health. The State servants are entitled to be heard if they protest that economy is likely to be achieved too much at. their expense, too little by savings other than in salaries and wages. That is an arguable question. But no argument can establish that solvency in the present emergency can be achieved by anything but, economy, by direct, old-fashioned saving on expenditure.