Poverty Bay Herald PUBLISHED EVERY EVENING GISBORNE, SATURDAY, JULY 18, 1936. WORK OF THE SESSION

Poverty Bay Herald, Volume LXIII, Issue 19070, 18 July 1936, Page 4

Poverty Bay Herald PUBLISHED EVERY EVENING GISBORNE, SATURDAY, JULY 18, 1936. WORK OF THE SESSION

The resumption of the session on Tuesday next will be awaited with mixed feelings—with eager expectation by those who expect to benefit either from the largesse of the State or concessions which the State proposes to compel private interests to make-, and with some moasuro of trepidation by those who will be called upon to finance the Government's schemes but have little or no say in formulating them. Intorost will centre mainly, although by no means ■entirely, on the Budget, for only from this will it be possible !o learn the extent of the expenditure to which the Government intends to commit tho country, and the methods it proposes to adopt to finance its programme. The legislation .that has been enacted so far has not. had any fnr-ircnching effects on the national finances; priu•lpally it has been directed to changes in administration attd to the regulation of private enterprise. In the one case costs have not been materially affected, and the, other the- burden has not to be carried by the State, except indirectly. In: the second half of the session, however, the position will be changfld, for increases in Civil Service salaries, pensions, and public works are items that must be financed by tho Treasury, and it is the disclosure of

how this is to be dono that will be awaited with interest. Already il serais to bo fairly corfilin that the Budget will follow more or less orthodox line. l ;; •it is significant, at least, that, latterly there has been no talk of radical excursions into the realm of experimental finance. Whereas before the elections Mr. Savage and hw followers assured the public that finance was the least difficult problem of all—in the words of the Prime Minister it was merely a matter of passing the necessary credits—more recently there lias been a different tone.' Various Ministers have assured deputations that requests ore largely a matter of finance; Mr. Savage slated thai the Dominion could spend no more than its total income, and the same remark applies, of course, to the Government; and the Minister of Finance has expressed his beljef in the principle of a balanced Budget ami stated that a reduction of taxation from one source must be offset by increase:-; from other.*. All this, then, portends adherence to the doctrine of sound and orthodox finance, and this being so the mystery resolves itself solely into a question' of the extent to which national expenditure will be increased and the measures that will be adopted to meet il. ft von here there is no great element of mystery. When the present Government too]-: office, it found the finances of the country in an exceptionally satisfactory position. All the "dirty work" had been done by its predeu*»»ftM and everything was in readiness for rapid development so soon as world economic conditions took a. turn for the better. Recovery, indeed, was already apparent, hecati.se ex ports, which so completely govern the life of the country, had shown an increase or about £10,000,000 a. year. Only now, however, is the effect of this favourable development mak ing itself apparent in the national accounts. Without lifting a little finger, therefore, the Government can calculate on its revenue from taxes bring increased by some millions of pounds. The unknown factor is whether the increase will he stiflicicnl to meet the additional expenditure, and, if it is uoi, what sources will be tapped to make good the deficiency. There appears to be little likolihood of ihe promise of reduced taxation being re-deemed in ilie near future, since the Prime Minister has made a number of explanations about the difficulty i" making speedy change,-, and the. probabilities suggest the reimposition of the graduated land la-x and a, steeper grading of the income tax, with, possibly, minor adjustments in other directions. 80 far as public ' works are concerned il seems likely that the Government will adhere to the old policy of borrowing, perhaps changing to the extent of lining the. Reserve Bank as a medium. The first measure to bo introduced next week will be one providing for the restoration of salaries, and the chief interest in this will be the revelation of the basis il is intended to adopt for fix ins the 19.11 standards for those in private employment. The Pensions Bill, which is expected to reflect a substantial increase in the requirements of 'he department, will to some extent be foreshadowed by flic Budget, but details of the increases and extensions will be eagerly awaited by those who expect to benefit. The steps the Government proposes to take for the adjustment of mortgages remain obscure, and since the whole problem is so complicated speculation at this stage would be futile. It is to be hoped, however, that the Government will not overlook the fact that mortgagees do not consist in the main of the moneyed class, but are very largely represented by working people whose savings are invested in such institutions as life insurance Companies, building societies, and savings banks, and that, consequently, in the granting of so-called relief it is possible to do serious injury and injustice. In one. other respect the progress of the session will be watched closely, and this is for some indication of whether it is deemed necessary to amend any of ihe measures which were- rushed through in the earlier singes. In particular, there, will be a sincere desire that the Government should do something to assist those youths who have lost their employment as a remit of the recent industrial legislaion. All that need be said in this connection is that the Government will be more readily excused for making mistakes —and mistakes, after nil, are inevitable with all Governments — if it frankly admits its errors and ■takes the earliest possiblo steps for remedying them.