The Waipa Post. Published on Tuesdays, Thursdays, and Saturdays. SATURDAY, MAY 13, 1922. THE DOMINION’S FINANCES.

Waipa Post, Volume XXI, Issue 1242, 13 May 1922, Page 4

The Waipa Post. Published on Tuesdays, Thursdays, and Saturdays. SATURDAY, MAY 13, 1922. THE DOMINION’S FINANCES.

THE statement which the Premier made at Feilding on Wednesday, night shows that New Zealand has come ■through a trying ordeal fairly well; though rocks ahead have still to be circumnavigated. As compared with 1920-1921, the revenue of the Dominion dropped 'last year by £6,133,954, and expenditure increased by £338,108. This is a new experience for a country in which an annual surplus of revenue has come to be expected as a matter of course, and the deficit would have been greater had not the Government courageously inaugurated a series of economies, the full effect of which is now being experienced. It materially relieves the existing situa- | tion that the Government has in hand a total balance of unexpended revenue surpluses amounting to upward of £7,500,000. Included in this balance is excess customs revenue amounting ,to £2,409,000, collected as a result of the abnormal over-importation of goods in fhe second half of 1920-1921, and carried forward. It is now obvious that the Government pursued a sound policy in establishing a substantial revenue reserve, which will have to be utilised to liquidate last year’s deficit, so that there will still remain a balance of more than £2,000,000. The excess of expenditure over receipts possesses serious significance, and emphasises need for utmost prudence, so that the outgoings this year shall not exceed the income. More than ever is it a case of cutting the cloth to suit the measure. This is emphasised when we remember that this year’s revenue is likely to suffer on account of further decreases in customs and income tax returns. The income tax- collected last year was levied on the earnings of 1920-1921, a year of prosperity, except in its closing months. As it bears on the yield of income tax, the depression of the past twelve months will become fully apparent only when the taxation of the current financial year is collected. Moreover, this diminution is quite apart from the fact that the rates are far too high for industrial prosperity, and stand urgently in need of overhauling. Then, with the decrease in imports, there will be a fall in customs revenue. The . Government has therefore to deal with the double problem of falling revenue from taxation and excessive rate of taxation. The need for caution and economy is more imperative than ever.