NEW ZEALAND ECONOMY

Otago Daily Times, Issue 21300, 2 April 1931, Page 22

NEW ZEALAND ECONOMY

PRUDENT FINANCE COMMENT IN LONDON. (From Our Own Correspondent.) LONDON, February 17. The Morning Post pays tribute, in its leader column, to the New Zealand Prime Minister. Mr Forbes, says the writer, “has set an example in prudent and courageous finance which ought not to be lost either on Mr Scullin or Mr Snowden. Now Zealand has suffered as much as any country under the maelstrom of world depression; the price of all her staple exports, on which she is dependent to an exceptional degree, have slumped heavily, her national income has shrunk, unemployment has increased. _ Owing to the resulting decline in public revenues she finds herself faced with a prospective deficit next year of £4,500,000, a large amount for a country whose Budget balances at about £24,000,000. That is a series position, though incomparably less serious than the one with which Australia is faced; yet whereas the Australian Government, after talking for seven morphs, is still shirking the issue. Mr Forbes has lost no time in deciding upon a course of action calculated to bring the situation under control without delay before it becomes unmanageable. His proposals, admittedly drastic, are to be submitted to a special session of Parliament, and include a 10 per cent, cut in all State salaries and wages, some moderate increases in taxation, and the diversion of funds from less urgent objects of expenditure to the alleviation of the debt burden.

“ The programme of Mr Forbes embodies just those measures -which Sir Otto Niemeyer recommended to Australia as a way out of her far more serious emergency. New Zealand is justly proud of her record of balanced Budgets, and her Government is determined not to allow a passing depression to tempt her from a pathway which has led her to prosperity in the past and has maintained her national credit at a deservedly high level. Improvident Governments like our own, who cut their coat without due regard to their cloth, are well advised to take a leaf out. of Mr Forbes’s book.”