The Waikato Times With which Is Incorporated The Waikato Arguo. MONDAY, JUNE 16, 1930. FINANCIAL RUMOURS.

Waikato Times, Volume 107, Issue 18047, 16 June 1930, Page 6

The Waikato Times With which Is Incorporated The Waikato Arguo. MONDAY, JUNE 16, 1930. FINANCIAL RUMOURS.

It is reported from Wellington that observers of the situation think that the Government will endeavour to raise a loan in order to meet our financial troubles. It is said that the Prime Minister’s estimate of a £3,0(10,000 shortage is under the mark and that it should be nearer £4,000,000. It is pointed out that in his statement the needs of unemployment relief were not dealt with and that this cost the country £1,400,000 last year. The departments in which economies can foe practised, are not those in which any great savings can be made. It is said to be impossible to effect the necessary savings in Wellington which is quite correct, though the statement, coming from Wellington may provoke a smile. With the shrinkage in imports that will certainly take place there will be a drop in customs revenue of somewhere about £1,000,000. It is considered,to be a political impossibility to put a tax on food, thought £500,000 could be raised by a small tax on tea and sugar. The statement is, of course, nonsense as there has been a tax for years on wheat and flour, a tax, moreover, which provides nothing for the Government. A return to the primage duty is said to he under consideration. The Highway Board's funds are said to be regarded with longing eyes, as they would yield about £1,000,000. The income tax would have to be raised about 35 or 40 per cent., and even so would not yield the required revenue. It is obvious from these speculations that they come from some one in political circles, for the economies that are considered, and the revenue which it is thought possible to collect, are all mentioned with a careful eye to their effect on the voters. This is not the time to think of such things; the position is altogether too serious. If a loan is thought of, is it to be raised in London or in New Zealand? Our credit in London is very good at present, but nothing would so effectually and so quickly destroy it as money borrowed for the sake.of avoiding necessary taxation. It is because we have balanced ,our budgets that our credit is good. If at the first breath of adversity we shrink from any sacrifice, our financial character must suffer. There is no real reason for ( reverting to a loan. There are sources of revenue which can bo tapped, and the only reason put forward for shrinking from them is that they may lose votes. They probably would lose some, but they are quite as likely to gain others. If the increased taxation is adjusted fairly between direct and indirect, the sting is largely taken away. The unnamed correspondent who is suggesting that a loan is likely mentions a small tax on tea and sugar, hut says it is impossible' for political reasons. Why? If at the same time that the tax were imposed the duty on wheat were reduced to a nominal amount, and some steps were taken to see that the relief was not frittered away between the millers and the bakers, the working man would be no worse off, and might actually be better off. The tax on tea and sugar should be balanced by an increase in income tax. Nobody would welcome it, but needs must in the position we are. in. The HighAvays Fund is pointed out as a possible source of relief, but then any attack on it would offend the motorists. Now this is the sort of consideration which at present is out of place. Some motorists may resent any restriction of their amusement, but the majority are citizens first and motorists after and will recognise that sacrifices are called for. The work that the Highways Board is carrying out is very desirable but cannot be said to be essential. There are also some smaller sources of revenue that could be tapped. The tax on beer might be increased, and also that on totalisators and amusements. Then again if the Highways Fund is to be raided, why not the Public Works Fund, though recent happenings at Arapuni may leave but little to raid? It is certain that to he raided is the eventual destiny of the Highways Fund as the work begins to draw to a close, and there can he nothing wrong in hanging up the work for twelve months or even longer, until we are in a position to resume it. Mr Forbes should consider that any one of these economies will make him unpopular, and that all of them together cannot do more, while the respect he will earn from all thoughtful men will go far to make up his loss of voles from those who cannot sec further than the immediate payment.

y/e are told by the Wellington correspondent that economies of any value cannot be made in the departments. It is true that nothing can be done that, will afford relief worth speaking of this year, hut that should not prevent the work being taken in haiid. There arc innumerable departments, some of which ~might be abolished, while others might be amalgamated "and save money in that way. Then again more economical methods of carrying out the work would reduce expenses, and make it possible in some instances to reduce the numbers of the staff. If a couple of competent accountants were instructed to

report on the economies possible there is no doubt that much money might be saved, but they must not be Wellington accountants. The mana of the Civil Service is too strong there. The taxation per head in New Zealand is £l2 14s 3d, which is an exorbitant figure, considering that our naval and military expenditure is small, and we have no diplomatic or consular services to maintain. Any Government which did its duty must give thought to the reduction of taxation, thought it must be admitted that it is many years since any effort in this direction was made. While we continue to multiply departments any reduction in expenditure is hopeless; while Ministers are more intent on winning votes by expenditure of public money than by economising or reducing taxation, we must expect periodical increases of taxation, until the time comes when higher taxation will not increase the yield. Social observers sometimes wonder if democracy will break down; their doubts might be increased if they came to New Zealand.