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Salient. Official Newspaper of the Victoria University Students' Association. Vol 41 No. 18. July 24 1978

Public Spending

Public Spending

I would now like to focus on another issue in which I think I have some special expertise. This is the role of public spending in the economy. In New Zealand, as elsewhere, a large rise in the share of public spending in the economy has created what the Planning Council described as public sector "overload". While one can argue about the precise meaning of words or statistics, two things are clear.

First, the rising tax burden to finance public spending is hurting the public. It is squeezing the economic position of the average taxpayer and acting as a disincentive to effort and innovation.

Secondly, the real value of much of the rise in public spending is very dubious. During the period of the previous government the share of government spending in the economy shifted up over 10 per cent of GNP; but the man or woman in the street would be hard put to identify any significant benefits they obtained from this upsurge.

One of the messages any Minister of Finance will need to keep repeating to the New Zealand public is that there is no such thing as free government services. It all has to be paid for somehow. A more rigorous control of public spending — and a better public understanding of the need for this —is pretty fundamental to grappling with our problems.

Well, I have listed some of our problems and issues and some of the solutions we will need. I could list many more if you gave me the space. And I trust that the students of Victoria University who have been educated at vast expense to the taxpayer, are able to play their own part at helping to grapple with these issues.

R. D. Muldoon