The Daily News MONDAY, OCTOBER 3, 1932. NATIONAL ECONOMY.

Taranaki Daily News, 3 October 1932, Page 6

The Daily News

MONDAY, OCTOBER 3, 1932. NATIONAL ECONOMY.

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It would be a fine thing if every responsible citizen in New Zealand could have a copy of the report of the National Expenditure Commission and could devote a fewdays to its perusal and consideration. The commission has done a tremendous task, for it seems to have investigated every detail of the public' expenditure, and it has dissected each item so finely that it is able to recommend savings involving no more than a fewpounds at a time. In the aggregate provision is made for economies to the extent of £845,000, in addition to the £3,000,000 covered by the earlier report, and it is pointed out that if the proposals were adopted their effect would be cumulative, so that the eventual bentfit to the Dominion would be far greater than the sum now mentioned. Every item in the report is worthy of careful study, which, it is to be hoped will be given by the Government and Parliament and every private citizen who has opportunity to master the details. At the outset, however, it is more important to understand the principles on which the commission has based its inquiries and findings. Its inspiration and its purpose are summed up in these pregnant sentences: “ ...... our investigations during the past five months leave no doubt in our minds as to the critical position into which the public finances of the Dominion have drifted, following on a lengthy period of lavish, and often unwise, expenditure of loan moneys too easily obtained. We express the opinion that if equilibrium between national income and expenditure is to be again reached, and the paralysing effects of over-taxation minimised, dependence upon overseas loans for any purpose should cease, desirable social and other services by the State must be severely curtailed, and the pruning knife continue to be applied to all administrative costs. Every item of avoidable expenditure must be eliminated.” As to the critical position of the national finances there is ample and simple evidence apart from the commission’s report. Though the Government has called up all its financial reserves and undertaken very substantial economies, the prospect for the.j

current year is a deficit of £2,000,000. But in order, to bring the public expenditure within £2,000,000 of the public income the Government has to screw the last possible penny out of the taxpayers’ purses. The drain upon every member of the community who has resources of any kind, even of an extremely modest amount, and upon every business organisation is so severe that the whole country is almost exhausted with the weight of the burden it has to bear. What, then, is the outlook for the future? An utterly hopeless one, unless relief is given. The whole nation is being impoverished ;by the cost of the national administration; it cannot hope to regain prosperity while the demands of the State deprive it of the means it should be employing to stimulate the activities of productive and commercial industry. The State makes these demands because, as the commission says, for a lengthy period it has gone in for lavish and often unwise expenditure. Money has been borrowed in huge sums without thought of repayment; as long as lenders would lend no one troubled about the day of reckoning. And expenditure has been equally reckless, with the result that it has given little or no return. Now in the face of adverse conditions we all have to realise that this country has gone beyond the limit in improvidence and is compelled to call a halt. Even during the past two years—the report indicates it plainly enough—the Government, Parliament and the people have not completely grasped the significance of events nor made adequate efforts to meet the national difficulties. If we are honest we must all admit that we have been in a measure gambling on the future. We have undertaken a good deal of disagreeable work and faced a certain amount of hardship, but always with the hope that it would not be for long, and as soon as the depression began to pass away the necessity for limitations would be gone. We have been deluding ourselves. In the light of the commission’s report we must confess that with all our pious promises of reform our performance has fallen far short of what is necessary. Now comes the commission to tell us in the plainest language what is required of us. Its . members have tackled an extremely unpleasant job with conspicuous courage, with evident impartiality, and with indubitable wisdom. Whether the methods they would adopt to solve the national problems are the right ones must be a question for painstaking consideration, but a first reading of the report indicates that they have framed definite principles and have been consistent in their adherence to • them. The country owes them much for their labours. They will be repaid if those who are to say what the fate of the report shall he will bring to its consideration such courage and freedom from, petty bias as the commissioners themselves have shown. 'Wpw ’