THE OTAGO DAILY TIMES THURSDAY APRIL 2, 1931. BRITISH FINANCES

Otago Daily Times, Issue 21300, 2 April 1931, Page 10

THE OTAGO DAILY TIMES THURSDAY APRIL 2, 1931. BRITISH FINANCES

With characteristic promptitude the position of the national finances in Great Britain was made known on the night on which the financial year closed. The Chancellor of the Exchequer had foreshadowed a heavy deficit in a momentous speech in the House of Commons last month —a speech described at the time as “ the gravest for 50 years.” The actual deficit is now revealed as £23,275,971. There are, however, some compensating circumstances. According to the Daily Herald, the Labour organ, Mr Snowden can point to the reduction of the National Debt by £30,000,000 during the year, and there were payments of over £11,000,000 to the Sinking Fund in excess of the estimates. Nevertheless, Mr Snowden cannot avoid the confession that the anticipations upon which he prepared his Budget last April have been seriously falsified. In that Budget, the first for which a Labour Chancellor was solely responsible, he submitted proposals whereby he would meet an estimated expenditure of

£787,209,000 with an anticipated revenue of £789,445,000 and thus secure a surplus of £2,236,000, He relied principally upon increased taxation to provide him with £42,000,000 approximately of fresh revenue, but he has been severely disappointed in his expectations of fresh revenue. It may be regarded as a sign of the times that Mr Snowden realised the vanity of his hopes at the same time that the Prime Minister of New Zealand decided to take the country into his confidence and admit how remote the prospects were of the accounts balancing in the manner for which he had budgeted. Mr Snowden’s announcement to the British taxpayer was scarcely less distasteful than that in which Mr Forbes emphasised the necessity for drastic and disagreeable economies, but there was this difference between his attitude to the crisis and that of Mr Forbes that he made no attempt to disguise the fact that he recognised that the burden of taxation —which amounts in Great Britain to £ls 13s lOd per head —was already so great that he could expect little benefit from the imposition of new direct taxes. There is a significant similarity between the situations confronting the two countries at the present time, and it would appear that one course only is open to each —a complete overhaul of national expenditure. In both cases are to be found convincing illustrations of the futility of trying to make both ends meet by imposing upon the taxpayer heavier burdens than he can bear. In admitting that “ an increase of taxation, under present conditions, that fell on industry, would be the last straw,” Mr Snowden has affirmed a truth that may readily be applied to the Dominion, and there is equal applicability to New Zealand in his statement that “ schemes involving heavy expenditure, however desirable, will have to wait until prosperity returns.” The first duty of individuals or nations when adversity comes is to practise economy, and it may be suggested that the exigencies of the time have induced in the taxpayers of Great Britain and New Zealand alike feelings of impatience and resentment at the waste and extravagance of successive Governments which have essayed to remedy the position by increases of taxation. That recovery from the present crisis cannot be achieved by such means is unquestionable, and Mr Snowden admitted as much when he stressed the fact that the restoration of the financial equilibrium would “ involve some temporary sacrifice from all.” There can be no argument about the inescapability of sacrifice of some sort, and it is suggested that politicians themselves might set an example in this direction. It is becoming increasingly apparent that the grip of polities on the nation must be relaxed if economic chaos is to be avoided. A national effort is required to restore financial stability, but this is not to be expected while party bickerings and differences are allowed to hinder the work of reconstruction. Mr Snowden, admitting that his party is powerless itself to avert disaster, has issued an appeal to the Conservatives to join in a common effort to take the steps that are essential to overcome the temporary difficulties which are confronting the nation. Until all sections of the community can agree respecting the unavoidable necessity for the painful measures which the exigencies of the case demand, progress towards the economic rehabilitation of the country must be retarded.