THE H.B. TRIBUNE WEDNESDAY, JUNE 5, 1929 THE DEFICIT

Hawke's Bay Tribune, Volume XIX, Issue 142, 5 June 1929, Page 4

THE H.B. TRIBUNE WEDNESDAY, JUNE 5, 1929 THE DEFICIT

Our Prime Minister, holding also the portfolio of Finance, has for some time now been keeping well before the public the fact that for the year ended 31st March last tho revenue receipts into the Consolidated Fund have fallen very substantially short of the expenditure. He has now, as to-day reported from Auckland, given us some details as to how this deficit has arisen and in what respects Mr Downie Stewart’s estimates have fallen short of fulfilment. On the whole ho has provided a pretty clear statement and one that, on the face of it, seems quite fair to his predecessor in office at the Treasury. A glance at the figures he adduces confirms the views already expressed hero that the occurrence of this deficit is nothing to occasion any great alarm. Although Sir Joseph Ward had previously hinted that it was likely to materially excied this amount, it is now officially ascertained at £577.000.

Of this amount no less than £307,000 is accounted for by the failure of Customs duties to rcaliso the estimate. This, wo are told, is largely due to a falling oft in tho collection made on spirits. This latter is a thing that is scarcely to be regretted, but is probably explained by the heavy clearances from bond that were made during the previous year, when merchants and publicans were apprehensive of a rise in duty rates. The probabilities, however, are that the revenue from this source will this year return to something like normal. Then, we have another substantial item of deficiency in Income-tax, which brought in £89.000 Tess than had been expected. It is worth while noting Hint in bis Budget. Mr. Duivuic Stewart gave some quite

clear indication of doubts as to whether his estimates from these two most important sources of revenue might not fail him.

On top of these two shortages, making up together £396,000, we have an item of expenditure which no Finance Minister could have foreseen. This arose from the twelve - million conversion operation which Sir Joseph Ward himself, with quite good reason, carried through before the time that had originally been intended. This involved the payment out to old bond-holders of some £156,000 of interest that properly belonged to the financial year now current and will go in relief of expenditure during it. War Pensions have been £35,000 and Old-age Pensions £20,000 bigger than anticipated, while the cost of the emergency Samoan Police Force meant another £25,000. The items thus enumerated more than make up the amount of the deficit, and in none of them is to be found any occasion for fear as to the future for, with tho better times experienced, both Customs duties and Income-tax may reasonably bo expected to provide better collections this year than last. lAt the same time wo have to recognise, what Sir Joseph Ward quite warrantably points put, that our interest bill on borrowed money is steadily mounting, not only on account of new loans, but on account also of tho higher rate wo have to pay on renewals of those that are maturing. As he says, it is essential for our credit that our Budget should be made to balance, but it is to be hoped that ho will not be tempted to cast his own on such lines as to provide a spectacular surplus by way of contrast to last year’s unexpected experience. Mr. Downie Stewart deliberately framed his Budget so as to keep crippling taxation down to a minimum, and that is a policy which his successor may also well adopt in the general interests.