NOTES AND COMMENTS

New Zealand Herald, Volume LXIX, Issue 21349, 25 November 1932, Page 10

NOTES AND COMMENTS

FOREIGN POLICY

Addressing the International Federation of Journalists, Sir John Simon said that every country had to keep a close connection between the press and the Foreign Department, and the method adopted in Britain was to take the press into their confidence to the greatest possible extent. If 'a secret was imparted as a secret, it was never divulged. If they could not tell the press anything about a particular matter they told it nothing, but what they did tell it was always the truth as far as they knew it. The press was of great value to the department, too, because it brought to the notice of the Government what was being done and what was being said outside. "We are not trying," Sir John continued, "to set ourselves up as the special friend of one country, and certainly not in any combination for the purpose of injuring or in any way undermining another. The present method is to work for co-opera-tion between the whole, and although the details of such work become ever more complicated the principles are more straightforward. I hope that the delegates will report to their countries that we are honestly trying to carry out a straight policy with great sincerity in the interests of the whole world and that wo believe that in the cause of disarmament will be found one of the best ways of cementing peace and ensuring that equal justice is served out to every nation on the face of the globe."

EXCESSIVE TAXATION

"The whole of our ideas on public expenditure need to be recast," says the Federation of British Industries, in a memorandum to the Government. "The illusion of inexhaustible wealth which deluded the world up till the close of 1929 has vanished. A substantial and growing part of our national and local tax burdens in recent years has been due to the necessity of abstracting from current savings funds to meet the charges on past loans, raised in order to carry out schemes of development conceived in optimisvi and executed with extravagance, or to finance social services which minister to the individual's need without reference to his productive power. All these charges, be it remembered, were additional to the dead weight of a national debt of over £7,000,000,000, entailing high taxation which must by itself diminish the competitive power of our industry and hamper our efforts to participate in world trade. A further effect of this borrowing has been that lenders have been able to command rates of interest which have been quite out of relation either to what was customary on such loans before the war, or to what competitive industry can afford. Before the war taxation, national and local, absorbed one-tenth of the national income. In 1931 the Chancellor of the Exchequer estimated that this had increased to onethird, and in the present year there is very littlo doubt fhat, as a result of the shrinkage in the national wealth, the proportion has correspondingly increased . . .

Since 1923 the real burden of expenditure has nearly doubled. Whatever may be the outcome of the present crisis, one fact is, we believe, unchallenged. Our survival as an industrial nation depends on our ability both to retain the initiative in tho domestic market and resume our traditional role of financial leadership in world affairs. Without accumulated resources both these things will bo impossible. To remain efficient, adjust itself to the new price level, develop new markets, and provide new outlets for employment, industry must be provided with continuing supplies of cheap capital. These can be obtained from two sources alone—from the saving? of the nation as a whole or from the internal resources of industry itself. The former source of supply is being rapidly dissipated through the high rates of taxation, which not only prevent savings, but also remove the incentive to save, and in many cases deplete savings already accumulated. Industry is unable to accumulate adequate resources from its undistributed profits."

CHANGED OUTLOOK REQUISITE

The memorandum of the Federation of British Industries concludes: "It is essential that more drastic measures be taken to reverse the course of post-war history. It is no longer enough to look for small savings in the departments, though every endeavour must ho made to reduce their unessential expenditure. A change of policy and of outlook is now requisite. We must curb our desire to find a short cut to Utopia and rest content with the standard of life which we can afford. We must also pay cash for the benefits which we consume: tho war debt is a sufficiently heavy legacy to pass on to our children and even that may make it difficult for them to enjoy a standard of living equal to our own. . . Taxation must be reduced in order that industry may be able to accumulate resources to enablo it to maintain its efficiency and attract a fertilising flow of new capital. It must also bo reduced in order that private savings may be made on a scale sufficient to finance new industries and develop new inventions, which can offer profitable employment. Development requires that capital should be cheap. It cannot be cheap until it is plentiful. It cannot be plentiful so long as it is dissipated through taxation. This will involve sacrifices by every section of the community. It will mean the abandonment or postponement of schemes of social advantage until more prosperous times, and the curtailing of activities by the State and the local authorities. Tho Government, alone can decide where savings should be made. But unless the cost of government is speedily and drastically reduced the whole industrial position of the country will remain in jeopardy."