The Daily News SATURDAY, MAY, 25, 1929. FINANCIAL OPTIMISM.

Taranaki Daily News, 25 May 1929, Page 12

The Daily News SATURDAY, MAY, 25, 1929. FINANCIAL OPTIMISM.

The speech delivered by. the Prime Minister at Motueka on Thursday was a fitting match o£ the weather we have been experiencing lately—radiant sunshine during the day, followed by low temperatures at night. Prospects as far as the current year were concerned, stated Sir Joseph Ward, looked hopeful, but the country’s general finances were not so hopeful, so it would be the duty of' Parliament to reconsider the financial position and recast it in order that the balance would *be on the right side. Even so, the Premier looked at the bright side of the situation, and said: “That, I think, can be done without much trouble.” Such a pronouncement says much for the recuperative powers of the country as well as in his own ability to overcome last year’s deficit of more than half a million and procuee'at the .end of the financial year a surplus. There are only two ways, of achieving that feat. One is by; increasing the revenue through Customs or by taxation; the other is by drastic reductions in expenditure. Apparently there is actually not much choice in this matter, so that it is by a readjustment of taxation that the desired result is to be achieved. The

course he proposes that Parliament shall take is to eliminate those taxes bearing unduly on some sections of the community, and “look around to discover which sections were not bearing a fair share.”,. If, however, there is merely to be a readjustment of the. incidence of taxation, then there is sure to be disappointment. Such a course will appeal to. those obtaining relief from their financial burdens, but that process will only partially meet the situation, unless it is more than a readjustment, and adds appreciably to. the pressure on that section of- the community which the Premier or Parliament may decide to be made to pay their full share. The pronouncement will lend additional interest to Sir Joseph’s forthcoming Budget. Not only on the financial situation is Sir Joseph in a hopeful frame of mind, but he appears to be equally sanguine concerning work for the unemployed, provided Parliament sanctions his scheme for railways construction, which would provide work during the. next three to five years. A? work is to be paid for out Ox loan money, the Premier may well feel cheerful over the mattei’, even though he must realise by this time that some of that money will never be revenue producing, while the interest thereon will be a drag on the taxpayers. Making the unproductive lines a charge on the railway system as a whole will not remedy the evil of constructing lines which can and never will pay their way—-an evil that the Premier is perpetuating. It may be that Sir Joseph has" closely studied the Budget speech jpade by Mr. Winston Churchill last mouth in the House of Com-

mons, but there is a vast difference between the circumstances of the two countries. There is one point, however, that should be common to both, namely, that the restoration of the gold standard reduced the cost of living by eighteen- points—equal in Britain to a remission of indirect taxation to the extent of 100 millions sterling a year. Side by side with the Premier’s speech at Motueka should be placed the interesting and instructive review of world prices by Mr. A. T. Traversi, formerly New’ Zealand Government Actuary, wherein it is demonstrated that it is upon those prices there are built up the values of land and businesses, ■which in their turn form largely the basis of taxation and public revenues. Mr. Traversi considers the Dominion is at present passing through a minor crisis, and that a certain amount of stagnation is evidenced by the amount of money on deposit and invested in government stocks. At the same time, it is a premonition of coming activity, while with the good balance of exports over imports the position may be regarded as very sound. In all probability, at the base of Sir Joseph Ward's optimism, is this evidence of acknowledged soundness of the country.. The trend of international affairs is towards stability. There is no indication of falling prices, though there must be no relaxing of the constant vigilance over all details of revenue if this year’s national balance-sheet is to come out on the right side.