WAR SURPLUSES.

Poverty Bay Herald, Volume L, Issue 16496, 31 July 1924, Page 6

WAR SURPLUSES.

TE ,\! FT ATI(' *N TO KXTRAA'A <! AX ( E (Parliamentary Reporter.) WELLINGTON, this day. Although speaking from 1 lie Governmeat benches Mr. •) • F. Rolleston (Timaru), maintained a critical attitude throughout the Budget speech. He condemned the policy of carrying forward accumulations of wartime surpluses, and analysed the finances of the year, contending that if they had stood on their own feet one million would have been paid from current, revenue to the publicworks fund. £375,000 for the purchase of Bank of New Zealand shares, and £IOO,OOO advances for education loans, which would bring the real surplus down to £387,365. This was an answer to the suggestion that too much was being wrung from the taxpayer. “The whole amount of accumulated surpluses,” he- continued, “should have been applied, as in England, to the reduction of the wav debt. Tf we had done that, we should not have had 13.', millions to spend on soldiers’ lands, the effect of which we have not'yet recovered from, and there would have been no land boom and consequent farmers’ trouble, because tire land, i fit had been bought would have been bought, not for cash, but bonds, a sounder financial wav of doing it. We should also have been without the loss of millions which we are prepared to make in connection with soldiers’ settlement. It is no use crying over spilt, milk, but 1 suggest, even at the eleventh hour, we should apply whaf is left of surpluses to war reduction." Mr. Rolleston went on to say that we raised our war loans by a bank note issue, causing an inflation of currency. England had adopted Hie policy of deflation, bringing it back to a gold standard. and this had its influence on New Zealand finance.-, If it- succeeded, then everyone who loaned New Zealand £IOO in 1915 utaler the conditions of high prices would receive in value double the amount, of this loan when il was repaid. This was another argument in favor of getting rid of the war debt ns soon as possible. The bigger the surplus the greater the excuse for increased expenditure or decreased taxation. He maintained on broad grounds that no reduction was justified this year, and it was not justified last year, hut'remissions were made, and he gravely feared that in future the Finance Minister would need to increase taxation to make up his revenue. He would make no objection to readjustments of taxation by Customs concessions, but it would be advisable to keep up the total of gross revenue by increasing direct taxation. The surplus should not bo considered other than as a windfall, or a temporary easing of the economic situation. The lime to practice economy was not when times were bad, but when times were good. What the Government should do was -not to treat the surplus as a basis for further concessions in the way of taxation, but rather ns something which would help us to face the possibility of a falling revenue, which might happen at any time. (Per Press Association.) Air. Rolleston. in the course of his speech, said he thought it would he a good thing if the mass of papers and figures presented with the Budget could lie scrutinised to a greater extent by the Public Accounts Committee. It was impossible for a- private member to go through these accounts intelligently without some assistance ‘‘From the heads of the Departments or the Ministers concerned. He hoped the Public Accounts Committee, which apparently ceased functioning, last session, would he ab[c lr> take up the work again and enable members lo get a better grasp of the tinanees of the country than they bad at present. He pointed to the fact that ace um ii la led' surpluses, which originally totalled £26,799.000, had diminished to £4,954,714, of which more than half were invested in State Advances securities, which were not -readily realisable. He contended that the surplus should have been applied to the redemption of war debt, and that even now it was not too late to remedy the mistake by applying the remaining accumulated 'surpluses to that purpose. These accumulations should not bo carried forward every year, as it led l<> increased expenditure. On broad general principles bo opposed for Ihor remissions in taxation. If anything was done it should only be in the adjustment of Customs duty, any such concessions to he made up from direct' taxation.