ALL-ROUND CUTS.

Star (Christchurch), Volume XLIV, Issue 370, 11 March 1932, Page 7

ALL-ROUND CUTS.

Appropriations Brought Under Review. ANOMALIES REVEALED. (Special to the “ Star.”) WELLINGTON, March 11. The National Expenditure Commission, in making its report, deals with each of the fixed and annual appropriations which come out of the Consolidated Fund. The permanent appropriations are dealt with first. The repeal of an amount of £7OOO ! which appears on the Civil List for native purposes is recommended, as it seems to be somewhat of an anomaly. The Commission does not suggest that any amendment be made in the law regarding the annual payments in respect of the public debt which are by statute a charge upon the general revenues of the Dominion. It is worthy of note in this connection that the payment of interest and sinking fund on the national debt of Great Britain is also provided for by statute. “ There is a net charge of £35,600 for the administration and management of debt services, and there appears to be no reason why this should not be provided by annual appropriation. We recommend accordingly. “ The payments on guaranteed loans are in respect of loans guaranteed by the Government where it is necessary for the Government to pay on the default of the borrower. The guarantees, having been given, cannot be avoided, but at the same time we consider that the amount required to meet this class of expenditure should ba? subject to annual review by Parliament and we recommend accordingly. Operation of Hoover Moratorium. “We understand that the amount required for 1932-33 for interest and principal on funded debt will show a reduction of £150,000 on this year’s figures, even if there is no extension of the Hoover moratorium. If a further extension of the Hoover Plan is agreed upon, the net further saving under this heading during 1932-33 will be approximately £600,000, making a total conditional saving of £750,000.” Dealing with annual subsidies to hospital boards, amounting to £645,000, the Commission states: “The amount required for subsidies to hospital boards should be subject to annual review by Parliament, and we recommend that in future the grants be provided under Vote, Department of Health. We wish to make it clear that we have not yet considered the possibility of effecting economies under this heading. This will necessarily involve the consideration of the whole of the expenditure both under this heading and under Vote, Department of Health, and in the time at our disposal we have not been able to deal with the matter. We shall, however, deal with this fully in our final report.” By abolishing the subsidies on voluntary bequests to hospital boards, there would be an estimated annual saving of £15,000. Having assets valued at £166,000, the Jubilee Institute for the Bilnd could exist for the present without a Government subsidy, states the Commission. This would mean a saving of £2500. The Commission is of opinion that University bursaries should be discontinued after December 31, 1932. The estimated saving is £9OOO. Grants to university colleges for workers’ extension lectures, amounting to £IBOO, should be discontinued. National Provident Fund.

Careful consideration should be given, states the Commission, to the possibility of altering the basis of contributions to the National Provident Fund in the direction of making the fund a self-supporting one. The active canvass for new members should be abandoned. No new contributors should be enrolled on the present basis. Maternity allowances, totalling £43,000 last year, should cease. The Commission recommends that contributions to superannuation funds should be provided for by • way of annual vote. “In view of the actuarial unsoundness of the funds, it is impossible to recommend any reduction under these headings,” adds the report. The payment to the racing clubs of a proportion of the totalisator tax, the payment totalling £25,000, should be subject to annual review and annual appropriation by Parliament. New Zealand's contribution to the Singapore Base should be reduced from £1,000,000 to £666,000. If this is not done, negotiations might be entered into to reduce New Zealand's annual payment of £IOO,OOO annually to £50,000 annually, increasing the remainder of the period of payment from four to eight years. The grant of £750 to the New Zealand Institute for general expenses should be reduced to £4OO. The payment of subsidies to fire boards, totalling £3492, should be discontinued. The payment of the following subsidies should be subject to annual review: On account of interest under the Grey Harbour Board Amendment Act, 1920, £12,000; “thirds” to local bodies under the Land Act, 1924, £11,000; “fourths” to New Plymouth* Harbour Board under the Endowment Act of 1874, £2000; fines to societies for the prevention of cruelty to animals, £7O. The payment of bath fees, amounting to £ll7O, to the Rotorua Borough Council ceases during 1931-32 and under no circumstances should the payment be extended.

MEMBER’S OBJECTIONS.

“ Tax has all Elements of Confiscation.” (Special to the “ Star, "j WELLINGTON, March 11. “In agreeing to that portion of the report relating to ‘ fixed incomes,’ I do so for the sole reason that the urgent necessity to obtain relief for the Consolidated Fund demands the sacrifice in. volved, but on the question of principle I wish, however, to make my position perfectly clear,” states Mr A. Macintosh, in an addendum to the National Expenditure Commission’s report. “To assume that, in appending my name to this report, I approve of the principle involved in this particular form of taxation would be entirely wrong. “ I am decidedly opposed to such a tax —at all events, to the extortionate extent of 20 per cent, or 4s in the £— recommended by the Economists’ Committee. This, if made permanent—a not unlikely event, having regard to

various forms of taxation imposed in recent years heralded as * temporary ’ and still in force—would prove an intolerable burden. In my view, a tax of this description must be regarded as possessing all the elements of confiscation, and is justified only—if the plea of justification can in such case be appropriately urged—by expediency and the exigencies of the situation. A tax of this nature, wrong in principle, would undoubtedly inflict lasting injury on the credit and good name of the Dominion, and would press with undue severity on many people of moderate means who have, in all good faith, invested their hard-earned savings in securities issued by the State, the interest on which constitutes their main—if not their only—source of income. To this burden must be added the loss to be incurred by depreciation of holdings, the inevitable consequence of reduced interest. Under such a staggering double blow the euphonius phrase ‘ equality of sacrifice * is quite out of place. “ Reference has been made in the main report to an alternative method of replenishing the Treasury—viz., a voluntary conversion loan. This is equally open to objection, for various reasons. The proposal (in effect an effort to compromise with creditors—an act of bankruptcy—postulates a unanimous response. Failure to reach this important objective must end in abandonment, or in the coercion of a minority or conceivably a majority, as the case may be; consequently grave injury to the public credit would result. The use of the term * voluntary * in this connection and in such circumstances would be merely a pretence.” Messrs J. Begg and J. L. Griffin, two members of the Commission, add a brief supplementary statement to the report in which they dissociate themselves from a portion of the report referring to fixed incomes. They advocate a conversion scheme launched by an appeal to State bondholders which would result in an estimated net saving of over £300,000.