BALANCING THE BUDGET

Taranaki Daily News, 3 August 1931, Page 5

BALANCING THE BUDGET

MR. W. J. POLSON’S VIEWS

CUSTOMS DUTIES DEPRECATED.

EDUCATION ECONOMIES URGED.

“This document is one that affects New Zealand to an extent which I am afraid, is not yet fully appreciated and moreover will affect in a very important degree the future of the community,” said Mr. W. J. Polson, M.P., in an address on the Budget proposals to the Stratford sub-provincial executive of. the Farmers’ Union on Saturday.

Mr. Polson said he deemed it essential to have sound finance in the Dominion’s national affairs. The job at present was to balance accounts —to see that the public accounts were presented to the world in such a way as would merit the fullest confidence overseas and would indicate that New Zealand was a country that lived within its means and contained an honourable and trustworthy community. Some people were asking why it was necessary to balance the Budget this year in preference to a two or three years’ balancing plan, but he thought that if they did not balance accounts this year they would be much worse off next year. He drew a parallel, with Australia, where there was a balance of . exports over imports totalling £20,000,000, yet the rate of exchange operated aga'inst Australia to the. extent of 30 per cent., and further there was the grave factor of the flight of capital from Australia. Thus it became apparent that trade relations were not the deciding factor and even a large balance of trade was not nearly so important as squaring the Budget. In Australia there was.a deficit,.in the national accounts of £30,000,000, and it was due to this that-Australians owed their heavy exchange rate. People in New Zealand had to see they did not fall into a similar position. ' ( GAP TO BE BRIDGED. ? -

Mr. Polson said the deficit in New Zealand was £6,850,000. This was the gap that had to be bridged. He outlined the savings effected by the. Government and announced in the recent Budget speech of the Prime Minister. These totalled £5,056,000, leaving £1,800,000 to bo provided for in increased taxation.

To a question from ' Mr. M. G., Trotter, Mr. Polson said he could not blame politicians for taking reserves collected in good years to meet the demands of a national crisis such as faced New Zealand at present. There were three things that could be done in New Zealand; two had been undertaken by the Government already. The first was. to go in for such drastic economies that the remaining deficit would be met, the second was to increase taxation heavily, and the third was to adopt a system whereby New Zealand could convert its debts to a lower rate of interest. This measure was not at present contemplated by the Government, but the,Copeland.Commission had recommended it in all seriousness to the Australian Government. Mr. Polson was of opinion that the Government had not gone as far as it might, in its economy measures. Certainly it had cut civil servants’ salaries and might .even cut them again, but there was the great cost oj £4,500,000 spent each year ■on education in a country having only 1,500,000 of population. Victoria, with a similar, population, had . evolved a system of education that was the admiration of the world but cost only £2,500,000. SAVINGS IN EDUCATION. Mr. poison saw the possibility of sub-, stantial savings in the education vote, and mentioned that on the first day of the session he had asked for a return, giving the number’ of secondary State pupils, the number who paid fees, the total cost and the total amount of fees. He had not yet got that return, but he was sure the Government could make drastic economies in its education expenditure and secure considerable revenue in fees. New Zealand had a system of almost entirely free education that was scarcely warranted in its entirety. The Minister of Education spoke learnedly of “discovered aptitudes of children,” but said little about “undiscovered aptitudes,” especially among pupils enjoying free secondary education. Mr. Polson would . give any child whose-at-tainments warranted it, an opportunity for 'prosecuting a higher course in learning, and he was sure there were many parents who could afford to pay a reasonable small fee for that privilege. On the other hand, there must be many children .going on to receive higher- education who would be much better fitted for training in farming and other pursuits that did not require a secondary curriculum. Economy and lower costs, Mr. Polson said, were sounder measures than taxation. Under the present circumstances, however, he thought taxation increases were unavoidable in New Zealand.

Mr. Forbes proposed to obtain a proportion of the increased taxation through Customs duties in a manner of which Mr. Polson disapproved. He disapproved of increasing the cost of living, and went on to explain that from many platforms in New .Zealand the 10 per cent, cut liad been justified on the ground that the cost of living would fall. The Arbitration Court decided wages according to the cost of living and created awards based on that standard. Would hot the worker be entitled ’to ask the Court to reinstate the whole or- a part of the cut now that Customs duties are being increased? That was something that must be fought tooth and nail, for it was

essential in New Zealand’s interests to keep costs down. Mr. Polson felt it was the duty of every citizen to assist the Government to adjust the finances. At the same time it had to be remembered that increased Customs duties would adversely affect farmers and he would attack such increases as strongly as possible. HIGHER PETROL TAX ADVOCATED There were other - directions in which revenue might be derived and a higher petrol tax was one of them, continued Mr. Polson. He did not believe the people would have to pay more for their petrol even if the tax were increased and instanced the case of England. Benzine cost 5d a gallon at the Gulf of Mexico, and the charges incurred to London could be assessed at not more than Ifd per gallon. The tax there was 4d a gallon as against 6d in New Zealand, but benzine was retailed for Is Id in London and Is 2d outside. In New Zealand it cost at least a shilling more.

Mr. Polson advocated higher duties on American motor-cars. He claimed that practice should be made of the principle of trading with the countries that bought from the Dominion.The Budget was taking great risks, Mr. Polson considered. He was not pessimistic, but was not satisfied that the immediate future held any prospect of recovery. Three important commissions

in Britain had recently issuedgrave warnings. Sir Ernest Thompson’s commission on the Eastern question. reported that Great Britain could not compete .there against foreign manufacturers and that the position really meant Britain was facing national bankruptcy. Lord d’A'bernon’s commission on South African affairs had also reported that Great Britain could not compete successfully in these markets. Sir W. Morris’ commission said; “We solemnly warn the nation that it is oh the verge of a .financial crash.” Great Britain, said Mr. Polson, was New Zealand’s only customer, and if its working people .have to accept lower wages, how were they going to buy New Zealand produce? In New Zealand national reserves had been drawn upon to balance the Budget. Then the Government had the advantage' of assessing income tax on last year’s income, but Mr, Polson asked what the. position would be next year when.incomes had fallen. He thought the Treasurer next year would have have more difficulty in balancing his Budget. • . ' Mr. Polson saw in Mr. Hoover’s plan a preliminary move for a general international reconstruction that would considerably ease the general financial situation. In the meantime he asked his hearers to consider the difficulties of the Ministry. “While I think Mr. Forbes took a risk in raiding the national reserves,” Mr. Polson said, “I think he followed the correct course. I do find fault, however, with his policy in imposing further taxes through Customs. I have always strongly objected to increases in Customs and am now in a difficult position—shall I, having these views, support the Budget proposals or shall I join with those whose action is calculated to embarrass the Government?”