It has been decided that now all the local sensational fuss has died down after the presentation of the budget, that a few comments from those involved in the field of economics and politics would be useful. We intended to present two articles of criticism of the 1961 budget, the first from a "pure 'point of view and the second from a political angle.

Mr Catt is well known to those in the economic "sphere of action" and lectures at the University. We include his article.

Mr Nordmeyer, M.P., was invited to contribute but unfortunately we have not yet received his contribution.

Mr. Catt writes:

Readers of "Salient" will, I assume, be aware of the common-place axiom of modern economics that when drawing up his annual budget, a Minister of Finance must ensure, not that it is in balance,; but rather, that is counteracts any undesirable tendencies that may exist in the economy at the particular time More specifically, when there is excess demand in the economy, he should budget for a surplus and when there is a deficiency of demand he should budget for a deficit. In the present New Zealand context it is clear that there is a high degree of excess demand —(for example, imports so far this year have amounted to £146 million I which is about 20 per cent, more than we can afford)—and, as such, I a markedly surplus budget was I called for. Instead we have had a budget which is virtually unchanged from that of 1960, which was brought down at a time when internal demand was at a much lower level. Indeed, such changes as have been made this year will tend to increase excess demand rather than reduce it.