DEFICITS

Hawke's Bay Tribune, Volume XIX, Issue 138, 31 May 1929, Page 4

DEFICITS

A few days back, in making passing reference to the <\pficit that has resulted from our own Government’s financial operations during last financial year, general reference was also made to a similar state of affairs in Australia. Sydney fi'.es i,jv to hand give us some specific figures with regard to the Commonwealth as a whole and to New south Wales as a State. From these we learn that so far as the Federal Government is concerned the first three quarters of its financial year, which ends with next month, disclose an excess of expenditure over revenue reaching close up to 3| million. This follows immediately upon a full year that wound up with a shortage of about as much over 2.J million. Thus for the twenty-one months the Federal accounts were 5f million behind, this, of course, having to be made up out of borrowed money. Turning to New South Wales, the figures have been made up for the first ten months of the financial year. Here we have expenditure topping revenue by close on 5 million. This compares with a deficit of more than 2J million for the corresponding period of last financial year, which ended with a finally ascertained shortage w-el! over a million. There is every chance that by the close of the financial year, as the result of substantial revenue collections in view, the interim figures quoted will bo appreciably improved. But, at the same time, it is perfectly assured that there will bo very heavy deficiencies shown in both Federal and State accounts. There can be no doubt but that this condition of affairs is in a very considerable measure due to the continual unrest which afflicts the industrial life of the whole Commonwealth and reduces the earning and spending power of the people. The income-tax collections have been very seriously reduced not on account of any reduction in the rates levied, but on account of incomes themselves falling off as the inevitable consequence of the frequent and often lengthy interruptions that industry has suffered. Losses on the running of the railways have also contributed in no small degree, and that, as with ourselves, without any prospect of their being made any less in the future. There arc, of course, with Australia as with ourselves, only two ways of making good the deficiency. The one is by a reduction of expenditure, and tho other by an increase in taxation. But the latter recourse, on top of the heavy rates already exacted, is more than likely to defeat its own object. It is very evident that the more taxation there is levied the less of income there will be left for translation into reproductive capital giving employment for labour. The sane remedy, of course, lies in the reduction of expenditure, and this applies quite as much to the individual as to the State. Were there less personal extravagance, there would be more money available for the promotion of indus tries providing incomes for both employers and employees. Then, every year we are asking the Government to do more and more for us that we previously had to do for ourselves. This may seem to result in savings to those who get the immediate benefit. But all these services have still to l>e paid for, and very often at a higher rate by the Government than by the. individual. The cost may be transferred to otlfcr shoulders, but it is there all tin same.’ Tn fhe end it falls upon the community as a whole and so >tduccs its financial capacity for productive undertakings.