AUSTRALIAN ECONOMY

Wanganui Chronicle, Volume 75, Issue 190, 13 August 1932, Page 10

AUSTRALIAN ECONOMY

FEDERAL CABINET’S TASK PRUNING OF "LUXURIES” £2,200,000 TO BE SAVED SYDNEY, Aug. 4The whole range of the commonwealth Government’s expenditure i« again under review in order to bring auout the saving of £2,200,000 necessary tv enable the Prime Minister, Mr. Lyons, to give effect to his undertaking tu the Premiers’ Conference. As the expenditure has already been cut very severely, it is no easy matter to discover other avenues where economy is possible, and the task facing the Ministers is a heavy one. It will pro bably take the Cabinet a fortnight to reach finality. Departmental votes, special appropriations, ami votes for miscellaneous services are being carefully overhauled but details of the cuts that are inevitable are not available. The Prime Minister has admitted that many of the cuts will be “of an unpopular character,” but he has pointed out that the Government can no longer provide services which the taxpayer cannot afford. The pruning knife will bo applied mainly to “luxury” expenditure, or what may be so termed during a period of depression.

Bounties for iron, wine and steel products, cotton, gold, and sulphur last year absorbed more than £400,000, and in view of the benefits which these industries are deriving from exchange considerable reductions in the items mentioned are bound to be made. The ordinary \otcs of departments have been reduced in two years from £2,950,000 to £2,306.000, but still further reductions will be necessary during the current year.

It is likely that the old age and invalid pensions scheme will bo thoroughly overhauled in the light of the knowledge that many people are drawing pensions, but are not morally entitled to them. Then again, the cost of living has fallen, and in some quarters it is suggested that the Government would bo justified in reducing the pensions accordingly. The expenditure on the maternity allowance has been reduced from £642,000 to £378,000, and there is no certainty that a further cut will not be made in this grant. War pensions, which last year absorbed £7,449,0000, present a grave problem, and any Government bold enough to interfere with them would cause bitterness. However, it has been suggested that many ex-soldiers who are receiving pensions are now in circumstances were such a grant is not needed. Returned men who have made good in spite of their disabilities will protest that >y should not bo penalised for doing so. but it may be pointed out to them that these are not ordinary times.

A complete review of the war pensions system is not unlikely, and the Government may appeal to the returned soldiers to suggest some way out. The bill, it probably will be argued, is far heavier than the Government can afford to pay.