CABINET MEETING

Southland Times, Issue 21607, 20 January 1932, Page 5

CABINET MEETING

FINANCE PROBLEMS DISCUSSED. SPECIAL ECONOMY COMMISSION. Wellington, January IS. Cabinet sat until late this evening discussing the general financial position of the country and preparing the ground for the legislation that will be introduced during the emergency session of Parliament, which opens on February 23. Broadly speaking, the Government idready has its course mapped out, but many important decisions will be held over until it is known what recommendations will be made by the Special Economy Commission, whose personnel will be announced shortly. As has already been stated, much of the future policy of the Coalition concerning the economic rehabilitation oi the Dominion will depend upon the work of this highly important commission. The Prime Minister hopes to be able to appoint the members of the commission some time this week. It will not be a large body. Its strength will be between three and five, and every effort is being made to secure the services of the best possible men, for it is acknowledged by the Government that their work will be onerous and their responsibilities heavy. Commission's Work. Much interest will be centred in the order of reference defining the scope of the commission’s investigations. The method which the commission will be asked to adopt in its work has already been decided upon, and it is clear that Parliament will be vitally concerned in its inquiries. Apart from other details, the commission will be presented with facts setting out the economic position of the country and the state of the national finances, and it will be asked to recommend ways and means whereby legislative action can be taken to strengthen the general budgetary position.

From what has already been stated in official circles, the commission will be given wide powers of investigation. The Government is determined that its recommendations will have the fullest attention, and that they will be followed up by suitable legislation, provided that any suggestions made are considered practicable. The inquiry will mainly centre upon the state of the national finances, but as the Prime Minister, the Rt. Hon. G. W. Forbes, pointed out in an interview this evening, this question cannot be divorced from the general economic situation at the present moment. The proposal is that the commission should be asked to present an interim report to the Government, in order that any legislation suggested might be brought down .during the emergency session. It is the wish of the Government that any financial readjustments should operate from April 1, the beginning of the new financial year; and although the commission will probably not complete the whole of its work until after the session, it is honed that it will be able to give a real lead before Parliament rises. The Government holds out little or no hope of stemming the decline in revenue, and although an increase in income anil unemployment taxalion is possible, it is realized that higher taxation generally will not necessarily, at a time like the present, produce proportionately higher revenue from this source. For this reason, even more drastic economy will be practised. Relief of Unemployment. The irony of the situation is tat although the Government’s revenue is declining heavily, and that spending must be cut to an absolute minimum, very much more money will probablj' have to be found for the relief of unemployment, This is one of the most serious of the immediate problems facing the Government, and legislation will almost certainly be introduced with a view to raising additional funds for the Unemployment Board. Incidentally, it is understood that the board, under the Minister in Charge of Unemployment, the Rt. Hon. J. G. Coates, is drawing up an enlarged scheme of activity in order to tackle the problem on a wider scale than at present. Any work in this direction will be regulated by the amount of money available; but it is considered extremely likely that an effort will be made to raise more by increasing the present inent taxation.

In its legislation to remove what are held 1o be burdensome restrictions in Arbitration Court awards, the Government will probably direct its attention to apprentices, whose number in various trades is at present regulated by the number of journeymen employed. Near!}' all the skilled trades are now closed to boys leaving school, and it is possible that an effort will be made to remove some of the hampering conditions which are stated to be militating against the employment of youths.

The Prime Minister intimated this evening that he would not set up a commission to investigate local body taxation until after the appointment of the Special Economy Commission. This being so, it will be impossible for this body to report before the June session, for its work will be spread over several months.—Christchurch Press Special Service.