The Timaru Herald FRIDAY, MARCH 20, 1931. FACING THE ISSUE.

Timaru Herald, Volume CXXXIV, Issue 18831, 20 March 1931, Page 8

The Timaru Herald FRIDAY, MARCH 20, 1931. FACING THE ISSUE.

Doubtless it will come as a surprise to the whole country to be informed by a Minister of the Crown, that until December, Cabinet refused absolutely to consider a salary cut. Sir Apirana Ngnta, who lias a reputation for straight speaking, indicated pretty clearly that the Government has only just awakened to the fact that the rapid increase in the cost of administration could not be met, save only by additional taxation, which the country cannot bear. The Prime Minister in his pronouncement indicated that the Government found itself in the position of requiring additional revenue if the budget is to be balanced. Since the issue of that disturbing statement, 'Hr Forbes has discovered that further unexpected shrinkages in revenue may so upset the budgetary equilibrium that a substantial and quite unprecedented deficit may confront the country at the close of the current financial year. To stem the unfavourable drift of the national finances, Mr Forbes placed the following proposals before the country, which, he said, must he accepted by Parliament, and demanded of the people if the finances next year were to be restored to an even keel:

Reductions in salaries and wages 1,500,000 Reductions in other expenditure and financial adjustments .. . s .. .. 1,250,000 Increase in postage rates .. 900,000 Additional taxation (direct and indirect) 850,000

Total 4,500,000 It lias remained for Sir Apirana Ngata to throw a bigger bombshell into the very much perturbed community. “In seeking for methods of economy,” said the Native Minister, “the Government faced two ways of dealing with the public service, mainly (1) by wage cuts and (2) by retrenchment.” It must be said to the credit of the Government that it chose the most human, but at the same time, the most damaging line of action, if it counted the cost in electoral support. If the Government had been less concerned for the welfare of the public service, it might have decided upon retrenchment without making a cut in salaries. It will probably come as a shock to the community in general, and the public service in particular to learn on the authority of Cabinet Ministers, that the Government now finds that it will probably be necessary to supplement the salary reductions by retrenchment. “Unless the amount of money available for paying wages is increased,” said the Minister, “there will be few if any jobs.” This startling statement was made in supplementing the issue of an obvious warning in which the Minister said that the Government may find itself compelled to reduce staffs as well as salaries and wages. At an earlier sitting this session, the Prime Minister was forced to make the unpleasant confession that the revenue the country draws from all sources shows obvious signs of not being up to the budget estimate; so much so, that a net comparative decrease of £125,000, has so swung the pendulum of national finance farther away from stability that he anticipates a deficit of £1,250,000. The whole difficulty is due to staggering increase, within recent years, of the cost of Government. Year by year new activities are undertaken, money was poured out in all directions, secondary divisions of State Departments divorced themselves from the parent departments, and surrounded themselves with costly organisation. The dangerous plunge into riotous living is not peculiar to the national administration, but extravagance in national and local control' has been the order of the day. The Government, on its part, has set up an Economy Committee composed of politicians and heads of departments, but so laborious has been its operations, that so far only the merest hints of its existence have penetrated the black silence. It is nevertheless significant that the only member of the Committee to say something about the full economy plans the Government has in mind, is Sir Apirana Ngata, who has made the startling announcement that the Government may be forced to add retrenchment to the unpleasantness already associated with the Government’s methods of balancing the budget. Some measure of responsibility for the difficulties into which the national finances have drifted must be accepted by the Government, since on the showing of Sir Apirana Ngata, not one member of the Cabinet had realised, as late as December last, that drastic steps had to be made to stop the rising cost of government.