COMING YEAR'S BUDGET

New Zealand Herald, Volume LXIX, Issue 21326, 29 October 1932, Page 10

COMING YEAR'S BUDGET

WARNING BIY MR. COATES EXHAUSTION OF RESERVES TAXATION OR ECONOMY [BY TELEGRAPH —SPECIAL REPORTER] PUKEKOHE, Friday "A great deal has been done in the matter of effecting economies in public expenditure and as a result a substantial improvement has been effected in the position of tho public finances for the current financial year as sot out in the Budget," said the Rt. Hon. J. G. Coates, in (he course of his address at Pukckoho this evening. "Restoration of business confidence would undoubtedly do a great, deal to accelerate our progress along the road to recovery, and in order not to check tho incipient recovery of such confidence tho Government lias this year adopted an extraordinary course of budgeting for a deficit not exceeding £1,000,000 and has refrained from imposing any further taxation, either for general purposes or for the. unemployment fund. In fact there has been some movement in the opposite direction in that the Government has restored the penny postage and pursuant to the Ottawa agreement has made reduction* ip customs taxation estimated to cost £250,000 for the balance of this financial year. "A Breathing-space " "In addition, every effort is being made, in providing work for the unemployed, to uso the moneys in such ways as will provide the maximum amount of assistance toward a revival of business activity. The building subsidy scheme is a case in point. In short, the Government has so arranged, matters as to provide a breath-ing-space from further taxation burdens and it is doing its utmost in other directions to encourage business recovery. "At tho same time," continued Mr. Coates, "it should not be, assumed that we are out of trouble financially. The Budget for the current year allows for a deficit not exceeding £1.000,000, after taking in credit £2,500,000 to be obtained from reserves. Tlieso reserves are not in ;t liquid state at present and special arrangements had to be made with the Bank of New Zealand and the National Bank to enable the amount to bo made available this year. Next Year's Position "It must now be realised that we have practically come to the end of the reserves built up 111 more prosperous times, and that to obtain a balanced Budget next year the amount of tho reserve being used this year, plus the estimated deficit for the year, .1 total of £3,500,000, has to be made up from some other source or obtained by further reductions in expenditure. '"We certainly cannot go on budgeting for deficits, for, as was pointed out in the Budget, such a course would inevitably increase our difficulties instead of relieving them. This being so, it is imperative that the rigorous control of expenditure and the campaign for economy in nil directions must be continned without any abatement, and I would like to press this fact upon the people of the Dominion. Far-reaching Changes "Furthermore, we must press forward with permanent and far-reaching economies designed to afford the maximum amount of service at a minimum cost, After what has been done in the last ccuple of years there is no possibility of effecting further substantial savings in administrative costs of services on the existing basis, and a permanent lightening of the burden of expenditure must to a large extent depend upon far-reaching changes to obtain equal service at less cost or on a definite curtailment of the services rendered by the State. Just as the Government is overhauling its costs, so we should expect local bodies to do likewise."