THE New Zealand Herald AND DAILY SOUTHERN CROSS. SATURDAY, MARCH 12, 1932. PLAIN WORDS ON ECONOMY.

New Zealand Herald, Volume LXIX, Issue 21130, 12 March 1932, Page 10

THE New Zealand Herald AND DAILY SOUTHERN CROSS. SATURDAY, MARCH 12, 1932. PLAIN WORDS ON ECONOMY.

The National Expenditure Commission in its interim report has given the country much food for thought. In every section the report is the work of practical men who have gone about their task in a thoroughly businesslike way. They have spent no time pursuing theories, or discussing academicplans by which the country would lie placed on the high road to recovery without anybody feeling the pinch or doing without anything. These commissioners have come to grips with the real problem of extravagant administration and of services which, however desirable in themselves, have become more costly than can be afforded in the present conditions of production, trade and revenue. They have pointed the way to rectification by the plain, unpalatable, but absolutely unavoidable path of direct saving. In contrast with the timidity and hesitation previously displayed, the commission gives chapter and verse for economies amounting to almost £3,000,000 with the possibility of a good deal more to come. It is possible still to have reservations about the policy of calling in commissions to do work of this character. A survey of the report strengthens the impression that Ministers, presumably in close continuous touch with the departments considered, should have been able to realise the feasibility of almost all these savings and to have set them in train. Yet, the commission having been called to the, task, it has done it faithfully and unflinchingly. At most the report can only be the prelude to action, or the call to action. The executive side of the task remains with the Government and with Parliament. The Government has the numerical strength to do what the situation demands. Its duty lies plain before it—to go ahead and implement the report of this commission.

At the very outset the commission disposes of an obstacle long represented as barring the way to more e:ffective economies than have as yet been achieved. It has been customary for Ministers to emphasise the division of expenditure into permanent or statutory and annual appropriations, to represent all the items of the first class as incapable of variation, and to plead that those of the second class left very little scope for effective saving. The commission denies the right of much that appears on the permanent list to inclusion in it, recommends that numerous items be made subject to annual review by Parliament, and marks down many of them for substantial reduction. It is refreshing to find so downright a denunciation of Parliament's ingrained habit of relinquishing its right and duty to review national expenditure year by year by increasing the number of statutory charges. The fact is that with the exception of the Civil List and the essential debt service items, there are few of these charges which are properly classed as fixed and invariable. Parliament, which established the rest as permanent appropriations can very soon disestablish them ; and the sooner it does so the better. It is particularly significant that out of all the economies recommended, apart from the salaries cut, only £402,810 belongs to the annual votes section. The remainder comes from the socalled permanent charges. The savings demand legislative action, but it should be effected as speedily as possible. Apart from this broad feature, the outstanding characteristic of the report lies in the number of economies it proposes. That such a body should have been able, in the short time at its disposal, to discover so formidable a list of items ranging in size from a few pounds to many thousands shows what hundreds of streams of expenditure the departments cover. The assumption on which much advocacy of saving has been based, that there were ample opportunities of making it, has been fully vindicated by a report giving chapter and verse for what it proposes. In a long list three items single themselves out as being the largest, I he most controversial and the most important. They are the appropriation of £500,000 from the road fund for the service of the Budget, a reduction of nearly £(i00,00o in pensions of all classes, and a furl her 10 per cent, cut in public service salaries, to yield £310,000 directly and £621,000 indirect ly. ('onm ning the first, it means a radi-al departure from what, was intended when the existing system of special taxation arid highways finance was established; but, however it l>e viewed, the national situation surely precludes any real protest against such an expedient. Reduction of pension rates is a measure of saving which most people "ill contemplate with distaste and regret. Vet, how to avoid laying a, hand on a department in which expenditure has grown so rapidly in recent years, as the report- shows, is a question without an answer. Similar action with regard to pensions was found essential in Australia, where it, was justly stated that actual inability in the Government, to meet payments would reflect especial hardship on pensioners. The inequalities discovered in the payment of pensions, while, too detailed for comment, certainly seem to allow for adjustment to which nobody can reasonably object. As for the further cut in salaries, those liable to be affected are not likely to have their objections reconciled by what the commission says; but there remains the question the Prime Minister asked them —which is better, a salary cut or wholesale dismissals 1 There are only two items in the annual votes

class selected for attention. The cut in the vote for Legislative Departments, affecting the privileges and emoluments of members of Parliament, will seem to most people a measure of poetic justice, and the country will watch with great interest to see how it is received. The proposed reduction in the education vote is an answer to those who have declared that, despite its phenomenal increase in the past couple of decades, <his allowed no opportunity for saving. The commission says it docs, says it. with emphasis, gives details and reasons. A cut of ,11369,050 is not to be despised, even if it covers some economies already ctlected, as it possibly does. Taken in all, (lie National Expenditure Commission has produced an impressive document in its interim report. This is not the last word 011 the subject from the commission, but even in its first pronouncement it has stated a case which the Government and Parliament must consider. Moreover, they must act on it, or provide the country with unanswerable reasons for failing to do so.