COUNTRY'S FINANCES

Otago Daily Times, Issue 22212, 15 March 1934, Page 10

COUNTRY'S FINANCES

TROUBLES NOT OVER MR J. A. HANAN'S VIEWS Mr J. A. Hanan, M.L.C., in the course of a speech in the Legislative Council last session, referred to the large amount of public debt and the deficit shown by the State finances, and summed up his remarks in the following words: — " Borrowing large sums is continuing. In the Budget mention is made of the Government offering new stock and debentures to investors. I mention this fact because it is painfully evident that no country can go on borrowing and spending at the rate we are without getting into grave financial trouble. Any individual %vho spends more than his income is bound to find himself in a financial morass,_ probably bankruptcy, and what applies to individuals is also true of the State. Why do I give utterance to such thoughts tonight? Simply because we who are intimately associated with Parliament and Government know that there are many in New Zealand who imagine that the Government is a producer of wealth. Nothing could be further from the truth, because as a matter of fact a Government consumes wealth which it obtains mainly by taxation. A fact overlooked by many is that when the Government is asked to provide money for certain purposes, it is the people who are asked to give it. The Government cannot by a simple edict create wealth and restore the economic balance. It is patent to all who give the matter a moment's consideration that until we can secure a substantial increase in the prices we receive for our primary products and an increase in earning-power, we will not get far in the direction of balancing our Budget. Sometime it must be balanced. Deficiency for a time may be inevitable, but the principle of a balanced Budget must never be abandoned. The reservoir of credits is being exhausted, and we are engaged in the extremely doubtful policy of mortgaging the future taxable power of the country. Is this fair to the present or succeeding generations Well might we ask where that will lead us. What do we find today? Far too many people are turning to the Government for aid in all directions, special interests demand financial assistance or protection, until it seems that too many people are leaning on the Government. How long can such a lamentable state of affairs continue? What with State and local government, financial benefits to individuals, wages, bonuses, subsidies, superannuation grants, pensions, concessions, and so on, the taxpayers are carrying a very heavy burden. We find certain persona demanding certain rights in connection with superannuation, utterly regardless of the financial condition of the country, while others have been called upon to agree to their contracts for payment of interest, rent, etc., being broken and to make heavy sacrifices, and, be it said, these sacrifices have been made by a great number who have been alw"ays outside of Government employment and benefits and with a full sense of patriotic duty to the country in a time of difficulty and stress. Surely it is full time that many people generally awoke to a realisation of the fact that in such times they, as citizens, owe a duty to the State, and that duty is not to look to the Government, that is to say, to the taxpayers (direct and indirect) for all the help required to enable them to escape from all their difficulties, but rather to do their part to help the State gradually to win its way. to a sounder financial position. What prompts me to speak as I am speaking to-night is the knowledge that on every hand we find selfish interests seeking to benefit at the expense of the State, regardless of the fact that those less fortunate even than themselves are called upon to bear a burden which they should rightly shoulder or partly bear themselves. Temporary sacrifices on the part of many people able to make such sacrifices will in the long run bring them benefit. Parliament is invaded with all kinds of applications, 'Ministers of the Crown are badgered and pestered from day to day with demands for concessions of all kinds —many of which represent drains on the Treasury. When some of these requests meet with the refusal that they justly merit in the interest of the people as a whole, what is the result? The Government is attacked and denounced, and against that attitude, selfish in the extreme, and not in the true interests of the State or the people who comprise it, I desire to enter my emphatic protest. The duty of the Government is to do what is best in the interests of all the people, not pandering to any section or seeking to benefit the few, but fully realising its responsibility to the whole, conscientiously seeking to discharge a difficult and onerous duty. "I also want to bring it home to the people that financially our troubles _ are not all over, that we are still financially embarrassed. We can go on borrowing and creating new loans or debts to pay old loans, but no country can live for ever on bond issues and floating debt. We have been living to a great extent on borrowed money, and if we go on increasing our floating debt, borrowing huge sums of money, with the consequent heavy burden of interest, what is in front of us? Certainly not progress and prosperity. As for increasing taxation all round the result will be that there will be an overloading of the burden of taxation which will stagnate economic progress and retard all citizens'_ progress. ?t is necessary to issue a warning to the people of this country who think that the Government can find all the money they require to help their sectional or special interests, that the money simply is not there. I am sorry to find attempts made by some Governments to doctor the results of their financial and economic illness and not to remove the cause. That is a foolish policy. We in New Zealand can go on borrowing, side-stepping and postnoning, but only for a short time. There must be more attention given to a selfreliant and a pay-as-you-go policy. What we should do is to adopt measures which will not only tide us over our troubles to-day, but will also be of such a nature as to prevent a recurrence of that disaster of that economic crisis through which we are now passing. In other words, we should be guided by what will be for the ultimate and lasting good of the country and not merely to seek to do what will benefit or please for the time being, with no regard as to future consequences."