GOVERNMENTAL EXPENDITURE

Wanganui Chronicle, Volume 85, Issue 187, 11 August 1941, Page 4

GOVERNMENTAL EXPENDITURE

AFTER having criticised the Budget (six speakers diseharg

ing that task), the Opposition in the House of Representatives withdrew from further participation in the debate. This conduct was described in some quarters as a sit-down strike. The decision was in itself a good one. No alterations had been made in the taxation provisions of the previous Budget, and the obvious reason for that was that there was no need for changes. It was a good Budget insofar as taxation was not again a disturbing factor in the community: the Government having decided to resort to borrowing. While critics of Mr. Nash proclaim that his action lias been prompted in this course by the prospect of a general election, to be held in November, it must be said that the condition of the money market provides a justification for his policy on financial grounds alone. It would be unwise to impose heavin' taxation upon earned incomes while an accumulation of bank balances grows larger and bank loans diminish. Reviewing the expenditure side of the Budget, “Audit,” of the New Zealand Economist, writes as follows: “The figures for ordinary Government expenditure show a total of £72.11)0.1)0(1 spent last year, and £74.14)1),000 to be spent in the present year. Bui these totals include transfers from the Consolidated Fund tn the Social Security Fund, which amounted to £3.200,000 in 1941 and to £3.600,000 in 1941-12. In the present year also £1.500,000 is Io lie transferred from the Consolidated Fund Io Hie War Expenses Account. The net expenditure of the Government for ordinary purposes, excluding war expenditure altogcl her. was fherel’orc £69,200.000 last. year, and is estimated Io total £69,000.000 in the present year. ‘ 1 To 111 esc 10l als lln war expenses must be added. I .as I year fhe act mil expenditure shown in the War Expenses Account was £27,200.000. For Hie present year it is expected to be increased by £42.500.000, which brings total estimated expenditure up to £69.700.000 and Hie .-iggreeate of all expenditure up to £138,700000. This enormous lota! is divided almost equally between the ordinary expenditure of the Government and expenditure for war purposes. “It is possible that war expenses may prove to have been over-estimated. Ordinary expenditure should be forecast more accurately, and it is to be expected that the result, will be close to the estimates. The magnitude of present expenditure, the failure to use economy of ordinary expenditure as a means of providing money for war. Ihe inordinate burden of taxation, the rapid recent increase of unproductive expenditure, the swollen total and swift increase of unproductive debt—all these are matters that should cause much deeper concern tlmu either Parliament or the public has yet shown.” The foregoing criticism is not that of a politician but the suber comment of an independent and expert commentator on public finance. It indicates clearly that had the Opposition chose to do so it could have fired much damaging ammunition at the Government’s financial policy.