THE CALL FOR ECONOMY

Otago Daily Times, Issue 24336, 28 June 1940, Page 6

THE CALL FOR ECONOMY

The keynote of this War Budget is necessarily one of sacrifice. The taxpayers are being asked to face, and meet cheerfully, demands which by all ordinary standards must be deemed abnormal; and, to the end that the Empire’s war may be successfully prosecuted, insofar as it is in the capacity of this Dominion to assist,' the people will not be found wanting. They have a right to insist, nevertheless, that the practice of economy, urged by the Minister of Finance as essentia! to a vigorous and sustained war effort, shall not be one-sided —that the Government, in brief, shall itself give a lead in the curtailment of expenditure and in that way give practical recognition to its own plea that, in this critical period, there should be no avoidable diversion of resources from the vital channels of war supply. The Government has a record of expenditure that, in four years, has resulted in an enormous increase in the demands made upon the taxpaying body. Every wage-earner is now to be taxed still more for the purpose of providing the means by which the war commitments of the Dominion may be met. The Government’s first duty, when faced with the need for drastically enlarging its claims on the private resources of the people, was to consider the contribution that it might itself make to the common cause by a vigorous pruning of the votes of the’ great spending departments of State. It cannot be said that there is evidence in the Budget of any real determination on the Government’s part to meet the taxpayer at least half way. Mr Nash placed heavy emphasis on the magnitude of the provision that would have to be made in the current year for war expenditure by borrowing and other means. That consideration, he implied, was studied in calculating the requirements of the Public Works Department, for undertakings presumably accounted vital to the public interest. Yet, regardless of the exceptional strain otherwise imposed on the spending power of the State, the Minister has found it impossible to finance public works except on the basis of a loan allocation amounting to £15,000,000, as compared—he seems to say with some satisfaction —with £19,000,000 in the previous financial year. Railway construction is to absorb £3,450,000, even after allowance has been made for the tapering off of operations which might be discontinued, at this stage, without grave risk of loss. It is possible to recognise the Government’s .difficulties in respect of railway undertakings, the chief of which it has advanced to a stage where it might be very difficult to decide upon postponement of operations. The question of postponement ought nevertheless to be considered, in the light of the immensity of the Government’s other commitments and of the deadweight of debt with which the Railways Department is already saddled in respect of unremunerative lines. Certain aspects of the contemplated land development and afforestation programme should also be capable of modification. The call is certainly for increased farm production; but that end is not likely to be attained by the bringing in of new lands while productive effort is being stultified on hundreds of existing farms by high costs and a shortage of suitable labour. In a country already ex-

pensively and extensively roaded there is provision also for the expenditure in the present financial year of £4,350,000 on roads and highways, while schools, telegraphs, telephones and other services are to absorb another £2,805,000. The extension of the national chain of hydro-electric undertakings is to require £2,750,000, but as this expenditure will apply to a useful and profit-earning State enterprise the vote should be fully approved. In other respects, however, it is impossible not to conclude that the total loan allocation for public works could, with a show of earnestness on the part of the Government, be brought into closer accord, with the realities of the financial situation confronting the country. A similar unwillingness to cut the coat according to the cloth available is shown in, the still-mounting cost of the maintenance of the several administrative services which are a charge on the ordinary revenue account. Provision is made for the appropriation for social and other services of £21,650,000. The prodigious rate of growth of these annual appropriations in the past six years is demonstrated in the following table:—• £ 1934- 11,057,833 1935- 12,142,119 1936- 16,586,659 1937- 19,628,144 1938- 21,440,105 1939- 19,812,316 It is to be noted, moreover, that the decrease indicated last year is unreal, for the reason that the cost of pensions, amounting to £ 10,843,216, previously charged against the annual appropriations, was transferred to the Social Security Fund, to which, on the other hand, a sum of £ 1,809,368 was contributed from the Consolidated Fund. If, therefore, annual appropriations had been made in 1939-40 on the same basis as in the preceding year, they would have totalled £28,846,164. The addition of the cost of pensions under the Social Security scheme to the appropriation for the present financial year would produce a total of even more alarming proportions. In respect of the cost of public administration the Government is clearly reaping where it has sown. It has brought numerous new State departments into being, as a necessary corollary to its policy of socialisation, and it has tremendously increased staffs by shortening hours of work and in other ways encouraging dependence on the State for employment rather than on private enterprise. That there is, no tendency disclosed in the Budget toward the goal of administrative economy surely indicates that the Government, even while it preaches saving as an essential virtue of these troubled times, is singularly reluctant to practise it.