DOMINION'S FINANCES

Waikato Times, Volume 94, Issue 14770, 8 October 1921, Page 5

DOMINION'S FINANCES

THE EUR DEN OF TAXATION MINISTERS CONSIDERING RELIEF. SOME PAST HISTORY. (Special Correspondent). WELLINGTON, Friday. In the course of Ihe statement, he made in the House of Representatives last week concerning the financial position of the Dominion and the need for drastic economy, (lon. W. Downic Stewart referred to a page in the history of the Dominion from which he and his colleagues might obtain much, useful guidance at the present time. He was discussing the large expenditure upon wages and pointing out the difficulty of making any material reduction in view of the rules and regulations which barred the way. If a “cut’’ bad to bo made, he said, it would have lo he by way of a percentage reduction, as that was the only method provided by I lie regulations. When this method was employed by Sir Harry Atkinson. he went on to say, it produced a storm of righteous indignation on account of its inequitable operation. The same percentage was taken from the m<ln with only a living wage as from ttic man with a big salary. The injustice of this was obvious. Lessons of the Past.

When recalling this incident the Minister seems to have conveyed to the House, quite unwittingly, one may be sure, that Inc only way of effecting economics at the present time was by the adoption of the method lint had been rightly condemned -tO years before. But as a matter of fact the “ten per cent reduction,” as this rough and ready application of (he pruning knife in ISSO was styled, more often than not as a badge of infamy, was a hasty expedient employed by the Hall Government towards the close of the session to satisfy the demand that some effect should ho given to the report of the Civil Service Commission set up earlier in the year. A brief recital of two or three facts in connection with Hie appointment and report of that commission may he necessary to a proper understanding of the position. A Lay Commission.

In October, 1870, the Hall Government succeeded to the Drey Government to find the linances of the country in a very satisfactory condition, and in March of the following year appointed a Commission, consisting of Sir Robert Douglas, Mr Thomas Kelly, Mr Charles Pharazyn and Mr Alfred Saunders, “to inquire,” as the Governor’s warrant ran, "into the constitution and organisation of the Civil Service. . . as such service is at present constituted and organised. • .

and to consider by what means the cost of the service may be reduced w.ihout I impairing or lessening its efiic.encv.” A notable feature of this commission was the absence of civil servants from its ranks. There had been commissions ] bearing the same title before, but they | all had consisted entirely of slate cmI ployces and none of them had been j fruitful in results. Sir William Fox’s Approval, | The commission of 1880 went about 1 its task in a somewhat unorthodox j fashion —poking iis corporate nose into previously unexplored places, | calling for evidence from uuexi peeled quarters, taking nothing for i grunted: and at illc end of three mouths presented a report of amazing frankI ness and far-reaching purpose. 11 had | discovered an incredible amount of ns--1 gleet, of wanton waste, of useless cxi penditurc, of blind inspection, of wild j extravagance and of faithless service, j The report met with much hostile cri- | licisrn in the House of Representatives. I but it withstood all the'attacks levelled against it and carried conviction to every unbaissed member. Sir William Fox, who had sat in the House since 1835 and thrice had filled the office of Premier, made an impassioned appeal for its adoption. ■ "Let us make the use of this report which was intended,” he said. “Let it be a guide to the Government in entering upon reforms in the Civil Service in the directions H I indicates, and it wilt do right good ser vice to this country and save thousands and tens of thousands, and perhaps ultimately, millions of i^oney." A Hasty Expedient. But the Government holding office by a narrow majority and confronted by a hundred difficulties temporised on the road to reform and after imposing the indiscriminate “ten per cent reduction” upon Hie Civil Service, postponed further action till a more convenient season. The reduction of salaries, though among the commission’s recommendations, was not one of the most important, and in later years the author of the report claimed it was intended to be curried out under some system of graduation. The available evidence, however, is against him on this point, and his memory and the memory of his colleagues must share with the Government of the day the reproach for an inequitable measure ol retrenchment. Hon. W- Downie Stewart probably is quite right in holding that measure responsible for the storm of indignation which prevented the Hall Government proceeding further in the direction the commission had indicated. The fact that the three members of the House who served on the commission lost their seats at the succeeding general election shows to some extent how deeply public opinion was offended. Eternal Vigilance. The purpose of this digression is to emphasise the fact that whenever the Civil Service has been far removed from the vigilance of Parliament its tendency has been to deteriorate, not necessarily in integrity, but certainly, in efficiency. It is not suggested for a moment that the service stands as urgently in need of an independent overhaul to-day as it did 40 years ago. It is to ihe credit of successive Governments, to Parliament and to the Civil Service itself that the grave abuses revealed in 1880 are impossible in 1921. But the enormous increase in the cost cf the service during the last few years, amounting to over three millions between 1920 and 1921, demonstrates with startling precision the crying need for such an overhaul. This has now become a matter of the utmost urgency. Mr Massey Insistent. Happily the Prime Minister recognises the essential facts of the situation. Tiie chief business of the present session, he told the members of the two Houses who entertained him at luncheon yesterday, was to lining the Dominion's expenditure within its revenue. When that was accomplished, lie said, it would be possible to re dime Hie taxation of those who were at present overburdened. No country, ho reminded his friends and ids opponents could be prosperous with over-taxation, ami New Zealand could not, expect to ~c an exception to il’n inflexible rule. This, of cuiirse, is the truth observant people of all shades of party have been urging upon the Government. The~e may be differences of opinion as to the incidence of taxation, but there is none 1 a.- to the necessity of reducing its j volume. Business Men’s Problem'Phis being ihe case one may fairly put it to the Government that a oom-

mission of business mm. with the wide powers given In Hie commission of 18■'<0, should he appointed to investigate Ihe serviiv from Lop to bottom, including its methods nt appointment and control, its account keeping, its various trading enterprises, its buying and selling and everything else cssenli.il to its well being and efficiency. Precedents without number have be m created for the appointment of such a commission during the last few years,

and its cost would be a mere bagatelle compared with the high interests and vital principles at stake. Helping the Government.

The appointment of a commission composed of business men with a knowledge of finance, trading practice, accountancy and office methods and routine would involve no reflection eilher upon the integrity or the ability of Ministers or of members of the service. Mr Massey and his colleagues, without delegating any of their authority or discarding any of their responsibility, would have the advantage of the advice and guidance of the very best qualified exports lo be found in the country. They have no time of their own to devote to such an undertaking. The heads of departments, who hitherto have been employed in a more or less perfunctory fashion upon such inquiries, would be relieved of an inI vidious task, and the rank and Pic of ( the service, had they done well, would be assured of wider opportunities and a more generous recognition of their merit. The public, above all, would be satisfied.