THE Wairarapa Age TUESDAY, SEPTEMBER 7, 1937. THE COMING SESSION.

Wairarapa Age, 7 September 1937, Page 4

THE Wairarapa Age TUESDAY, SEPTEMBER 7, 1937. THE COMING SESSION.

With measures for the establishment of national health insurance and universal superannuation set. down for consideration in the early part of next year, immediate interest in the session of Parliament which opens on Thursday next will centre largely on questions of national finance. The Government should by this time be in a position to give a clearer. idea than it has given yet of the financial policy it intends to pursue. At the moment the country is confronted by conditions of a phenomenal increase in taxation and in expenditure—the position admittedly being affected materially by an expansion of national income, directly attributable to improved trade returns, which has added greatly to the yield of existing taxes. The broad question raised, and one on which enlightenment will be awaited eagerly, is whether we are to come down to earth or are to attempt to soar, “onward and upward” into realms of inflation. On the*introduction of the Budget, which is to be brought down at a very early date in the session, it will be indicated whether the Minister of Finance and the Government propose to make any reductions in the taxation which at present bears severely on all sections of the population and undoubtedly is already doing something to check industry and productive enterprise. The existing state of affairs as reasonably favours a reduction of taxation as any that can be expected to arise. If, therefore, the Government does not give some relief to taxpayers in the session about to open, it will have to be concluded that the lowering of taxation has no place in its programme. An exceedingly important aspect of finance which will bear further elucidation is the use the Government intends to make of public credit. Some recent observations by the Prime Minister (Mr. Savage) on this subject are optimistic but vague. As he was reported in Dunedin recently, Mr. Savage said, with particular reference to housing, that with their own materials and their own men to do the work there remained only the money to be found and added:

The money was there to be had for the asking and in future nothing was going to suffer for lack of money or to be held up because some people thought there was not enough. He was convinced that until they got out of the clutches of a money system that was not a true reflection of the ability of an individual to earn and produce they would never escape from the wilderness in which the world was floundering to-day.

What a good deal of this means can only be guessed at. Mr. Savage has indicated, however, that it is proposed to use public credit, not only in financing housing, but in erecting public buildings and creating other State assets. One obvious condition of stability in a policy of this nature is that any assets created should be revenue producing in a degree that will permit and ensure the extinction within a reasonable period of the original credit. Under any other conditions, money emphatically is not “there to be had for the asking.” On the contrary, the effect of utilising public credit without making adequate and timely provision for the extinction of credits would be to debase the whole of the money in circulation in the country concerned and to undermine its total credit structure. The Government’s policy in this important matter, as well as in relation to the well-justified demand that is raised for taxation relief, should be plainly defined.