148 



Review of Reviews, 1/^/13. 



TOPICS OF THE MONTH. 



IV.-HAS THE FEDERAL GOVERNMENT BEEN 



EXTRAVAGANT ? 



BY ALEX. JOBSON. 



When the Federal elections are being 

 fought in the next few months few 

 questions will arouse more controversy 

 than that of the financial policy of the 

 Fisher Government. On such a question 

 into which party politics enter so largely 

 it is extremely difficult for the man in 

 the street to take a strictly impartial 

 view. He necessarily has political lean- 

 ings, and is accordingly prone to accept 

 as final the views of his party leaders 

 without looking into the matter for him- 

 self. Not everyone of course has the 

 time, nor yet the inclination to make 

 such an inquiry, and we therefore pro- 

 pose to consider the available facts 

 judicially with a view to assisting the 

 average voter to form his own judgment 

 on the case. 



THE OPPOSITION CHARGES. 

 The main issue is the charge of extra- 

 vagance Mr. Joseph Cook, as leader of 

 the Federal Opposition, has brought 

 against the Government. Now, of course, 

 expenditure is only extravagant if the 

 spender cannot afford it, or if, having 

 ample funds available, he spends them 

 to no good purpose. Mr. Cook's indict- 

 ment is accordingly just if the facts 

 prove the existence of either or both of 

 these conditions. 



In regard to the first it is very evident 

 that the Federal Government cannot 

 afford to spend i^22, 680,000 in the cur- 

 rent year, for the simple reason that the 

 revenue will not provide that sum. The 

 Treasurer estimated that the year will 

 only yield ^^20,422,000, and the deficit so 

 created he intended to meet by usmg the 

 surplus of ;£"2,26i,ooo brought forward 

 from the years 1910-11 .and 1911-12. 

 The revenue has, however, been so 

 buoyant that this estimate is likely to be 

 exceeded by about ;i^ 1,000,000. In that 

 case, only about one-half of the surplus 



will be absorbed, while the year's actual 

 deficit will be smaller than was at first 

 anticipated. This, however, will not 

 ■ alter the basic fact that the Government 

 will have in the year spent more than 

 it received. 



THE LIMIT OF REVENUE. 

 There might be some justification for 

 such a policy were the expenditure well 

 within the Government's immediate 

 revenue-raising powers. But it is not. 

 The present sources of revenue are al- 

 ready heavily strained, and the limits of 

 their yields cannot now be very far 

 away. The customs duties, for instance, 

 seem to have almost reached their top 

 for the time being. In 1911-12 they at- 

 tained the record figure of ;^ 14,700,000, 

 and now, though the Treasurer expected 

 the current year to yield about ;^200,ooo 

 less, the first eight months has brought 

 m i^8oo,ooo more than the correspond- 

 uig portion of the previous year. 



IMPORTS AND EXPORTS. 

 This is due to the tremendous growth 

 in imports which in recent years have in- 

 creased exceedingly. In 1909 the 

 merchandise imports were about 

 ^^50,000,000, whereas in 191 2 the approx- 

 imate total was over ^^"76,400,000. The 

 disconcerting feature of this growth is 

 that it has been out of all proportion to 

 the exports. In 1906 the excess of ex- 

 ports over imports was about 

 i^ 2 5, 000,000 ; in 1911 it had fallen to 

 ;£" 1 2,500,000, and in 191 2 was less than 

 three-quarters of a million. This is not 

 owing to any reduction in the exports, 

 for the total in 191 2 was only about 

 ^650,000 below the record figure in 

 1911. It is the abnormal increase in 

 imports that is responsible. The posi- 

 tion will no doubt adjust itself in time, 

 probably by a falling off in imports, for 

 one cannot look for a marked expension 



