The Waikato Times With which is incorporated The Waikato Argus. TUESDAY, FEBRUARY 8, 1921. MR MASSEY AT PUKEKOHE

Waikato Times, Volume 94, Issue 14586, 8 February 1921, Page 4

The Waikato Times With which is incorporated The Waikato Argus. TUESDAY, FEBRUARY 8, 1921. MR MASSEY AT PUKEKOHE

The Prime Minister was assured of a sympathetic audience for his speech on finance at Pukckohe, but it is by no means certain that the country will read the speech with the same kindly feeling. The fact that taxation is pressing heavily on many people Is enough to cause discontent, but after all most people recognise that this could not be avoided. Interest on war loans, pensions to disabled men, and the repatriation of soldiers is sufficient to ensure a large increase of taxation, but the real ground of complaint is that the money has not always been spent wisely, and that some lias been spent which might have been avoided. Mr Massey instanced the subsidies on wheat and butter. Mow long does he propose that these shall be continued? He said coal troubles cost the railway an additional £IOOO per day. How long will it he before the Government.devisa some policy for developing the coal within the country. The loan now beforc the country is to carry out our obligations to returned men, and nobody wishes to evade these. At the same time we must remember that at the time of the Armistice there was a credit of over £15,000,000 in the Consolidated Fund, and most people think that this was spent extravagantly. Then again, the Prime Minister says thai if a riovcrnment loan with 54 per cent, interest is not porn] enough for people they must lie hard to please. Loans arc largely taken by big firms and companies whose income tax js heavy, amounting lo 8s 9 t ] in the £ in some cases. The rate of interest, paid yields such concerns a very small fractii n over ;'. per cent, interest nett, and from tin.' day the loan was floated the bonds have been on sale at a heavy discount. It Is not possible to control the rale of interest, though very much harm may he done by the attempt. The power granted by Parliament to present local bodies borrowing at rates other than those authorised by the Minister of Finance will simply prevent development, and may lead to unemployment. That the power is used in such a manner that one local body Is allowed lo pay more than another will Strike everybody as grossly unjust and will lead to serious discontent. Then again the Government guarantee to banks of advances made agalnr.t wool If thoroughly unsound. It may involve the country in expenditure, and it. is tempting the wool-grower to take a line of action which all indications point to as unwise. The other guarantee lo banks against advances made for the purpose hi' taking up the loan was unworthy. The Prime Minister is quite right when he protests against the use of the words bankruptcy and repudiation in connection with the credit of N'ew Zealand, but the same spirit should have led him to avoid forced loans and guarantees to the banks to induce them to finance investment. Such proceedings damage our credit abroad,

where people naturally conclude that the Government is unable to borrow without compulsion. An extra i per cut. would havg assured the success jo' the loan and would have cost the country £60,000 per annum, a mere trifle compared to the subsidies on wheat and butter. It is mistakes of this kind which are oomplaln.Jd of when people grumble about heavy taxation, for most people know that the heavy taxation cannot be avoided. There is another matter in which the Government will do well to reconsider their policy. They are at present prepared to undertake various works which have hitherto been carried out by local bodies or by privato enterprise* Nobody thinks the work is well done, or cheaply done, but as the Government arc willing to undertake it there are always plenty of applications. We may finally abandon any hope of reduced taxation either now or in the future If this Is to continue. If the Government is to do the work It will raise the cost oT it by taxation. Very many enterprises and undertakings are desirable if we could afford them. If the Government threw the responsibility of raising the money on those who wanted the work the urgent matters would be carried out, and the others would wait. This of course would involve the abolition of the veto on the rate of interest, and the sooner that is abandoned, together with the moratorium, the Board of Trade, the building regulations and all other restrictions, the sooner we shall escape from the artificial atmosphere in which we are living. Much of Mr Massey's speech was a pathetic complaint of his troubles as Finance Minister, though much of his troubles are of his own making. But when he protests that people must work harder lv; is quite right, and he might go further and say they must spend less. Anyone who will walk down the main street, of any town in trie Dominion will be struck with the fact that almost every shop is devoted lo the sale of luxuries. It is often diffleult to find a grocer, a butcher or a baker, but there i- infinite choice of jewellers, tobacconists, sports requisites, lolly shops, all apparently flourishing. While this obtains it is useless lo preach economy to the Government. Easy come easy go is the motto for both Ministers and people. The latter fancy that as the income tax falls on the, wealthy there is no reason to complain, forgetting that it is reflected in the price of goods in the same manner as Customs duties. Economy is a virtue of which we have lost sight. It is not, as some people used to think, the first of the virtues, and indeed it often degenerates into something which cannot be called a virtue at all. Nevertheless, the habit o' - denying oneself an immediate gratification for the sake of a future benefit is not only good business; it also strengthens the character, and as a people we stand much in need of such strengthening. When Mr Massey in caches the old-fashioned virtues he commands the respect of all those who arc capable of forming a judgment. Unfortunately lie detracts from the force of his exhortation by financial shifts which would have horrified the Nineteenth Century. He may thinK that In such matters he is keeping abreast with the times,' but it is not desirable to do so if the result is to bring about trouble. Finance has an awkward way of compelling attention t> mistakes, anil it seems possible that it may be about to do so at an early date.