As New Zealand's indigenous fish fauna were not suitable for angling, European and American fish have been introduced. Those successfully acclimatised include the following species:

There are some 40 species of freshwater fish in New Zealand, 10 of which have been introduced from other countries.

The native species are contained in 11 families. They are believed to have evolved from marine ancestors during New Zealand's geological history; in fact, most of the families still have species which inhabit or can tolerate salt water at some stage of their life cycle. There is one species of lamprey (Geotridae), Geotria australis, which also occurs in Australia and South America. The eels (Anguillidae) are represented by two species, the long-finned eel, Anguilla dieffenbachii, and the short-finned eel, A. australis schmidtii. The family Galaxiidae contains the most species (c. 18); there is no common name for this group apart from “the galaxias”, which is preferable to the ambiguous term “native trout” often applied. Many of the Galaxias species are rare and known only by specialists. The commoner ones include Galaxias attenuatus, the inanga, whitebait, or “minnow”. Galaxias fasciatus, the kokopu or banded galaxias, is found throughout the country. Galaxias alepidotus, the giant kokopu, is the largest native freshwater fish (except for the eels), reaching a length of at least 17 in. (larger specimens being recorded in early times). It is dark brown in colour, strikingly marked with golden spots and crescents. Three members of the family are known as “mudfish”, having the remarkable ability to remain dormant for long periods of time buried in mud. Normally they live in swampy or muddy water, Galaxias burrowsius in Canterbury, Neochanna apoda in the South Island and lower North Island, Neochanna diversus near Auckland. The smelt family (Retropinnidae) contains four species of the genus Retropinna (called paraki by the Maori). They are small fish, 2–6 in. in length, pale green or grey in colour with bright silver sides. Young smelt frequently ascend rivers in company with whitebait. The grayling, Prototroctes oxyrhynchus (family Prototroctidae), is New Zealand's mystery fish. Although extremely abundant at the end of last century it has now virtually disappeared. It is no relative of the European or American grayling, being given that name in error by early settlers, and is better called by its Maori name of upokororo. A related species occurs in Australia. The torrent fish or shark bully, Cheimarrichthys fosteri (papanoko of the Maori), is the only known species of its family (Cheimarrichthydae). About 4 in. in length, coloured light grey with dark diagonal markings it frequents rapids and fast-flowing streams, after spending its larval life in or near the sea. The bullies or gobies (Gobiomorphidae) make up the last group of native fish. Six species are contained in the two general Gobiomorphus and Philypnodon. The better known of these are G. basalis, the common “cockabully”; G. radiata, the redfin bully; G. gobioides, the giant bully (reaching 9 in. in length); and P. hubbsii, the bluegill bully. Normally regarded as only a drab grey, many of the bullies have quite attractive colour patterns. Most are 3–5 in. in length. Bullies are widely distributed throughout New Zealand.

by Brian Turnbull Cunningham, B.SC., Senior Fishery Officer, Marine Department, Wellington.

• Native and Introduced Freshwater Fish, Woods, C. S. (1963).

(1859–1931).

Headmaster of Wellington College.

A new biography of Firth, Joseph appears in the Dictionary of New Zealand Biography on this site.

Joseph Firth was born on 25 March 1859 at Wellington, the son of Aaron Firth, a stonemason, and Ann, née Priestnell. At an early age he accompanied his family to Cobden on the Nelson-Westland border. From there he won a scholarship which took him to Nelson College. Later, he attended Canterbury College where he graduated B.A. in 1889. On 8 May 1889, at the Church of St. Michael, Christchurch, Firth married Janet, daughter of Nehemiah McRae, a Marlborough runholder. There were no children.

Firth taught at Nelson College, Wellington College, and Christ's College, Christchurch, and, in 1892 became principal of Wellington College where he remained until his retirement in 1921. During his term he nurtured Wellington College from its comparative obscurity until it became one of New Zealand's leading secondary schools. It is of interest to note that, during his early years as teacher, he had “acquired” a second initial, “P”, to his name. Not surprisingly he soon became known as “Pentland Firth”.

Several inches over 6 ft tall, with a well-trimmed beard, vigorous, dignified, masterful in presence, J. P. Firth has become a tradition far beyond the school he served for over 30 years. He was known among his boys as “The Boss” and later among his old boys, as “the dear old Boss”. Like that of J. W. Tibbs, of Auckland Grammar School, his influence came not so much from precept as from a single-minded devotion to ideals, a steady personal example, and from a complete understanding and genuine love of boys as persons. Firth believed in the virtues of manliness, toil, and duty in preference to ease and pleasure, and transmitted to his pupils an abhorrence of slovenliness, sneaking, and all things mean and unworthy. He gave of himself to the utmost to build with his boys and masters a school of the noblest repute.

In its earlier days, like other New Zealand secondary schools, Wellington College was hampered by lack of the money necessary to pay the masters adequate salaries and to meet the needs of a progressive building and grounds policy. Firth was untiring in his efforts to overcome this lack, and was in fact partly responsible by the sweat of his own brow and that of his boys for the improvement of grounds and the provision of playing fields. At the same time he ceaselessly worried his Board of Governors for salary increases for members of his staff. The introduction of the “free place” system in 1903 relieved the school of much financial worry and Firth proved himself able to adapt himself and the school as units under the Education Department without loss of individuality and enthusiasm.

Though Firth was not a scholar, his knowledge particularly of English literature was as wide as it was exact, and his detestation of slovenly speech notorious. Though it has since grown to be one of the largest schools in the Dominion, in Firth's time Wellington College was still a small school by today's standards. Firth made a practice of visiting each classroom at least once each day, if only for a few minutes, so that he had a thorough knowledge of all his boys and the masters. He was keenly interested in boxing, military drill, athletics, cricket, and in football (he served for a period as chairman of the Wellington Rugby Union and as a referee) and this further enabled each boy to feel that his efforts outside were as well known and as much appreciated as in the classroom. Throughout his time as headmaster, too, he and Mrs Firth remained in sole charge of the growing boardinghouse and thus carried unceasing responsibility for 24 hours of the day for seven days of each week. This exacting work was done naturally and unselfishly, for childless themselves, both loved the close associations of boarding-school life and realised the incalculable influence that a sound “core” of boarders makes upon the school as a whole.

The years of the First World War were a testing time for the school, past and present. Hundreds of old boys served in the armed forces in New Zealand and overseas, whilst under the headmaster's leadership the school raised in various ways £2,945 for patriotic funds. Before the war had ended Firth and his wife gave generously for the building of the Memorial Hall, opened in 1928, following the erection of the present modern buildings. The inevitable time of resignation and retirement came in 1921 and the Firths went to live on one of the Western hills, at Wades-town. In 1922 Firth was awarded the C.M.G. To the end he retained his consuming interest in the school and its members and attended many functions as a venerable well beloved guest. He died on 13 April 1931 at 16 Wade Street, Wadestown, Wellington.

by Herbert Alexander Horace Insull, M.A., DIP.SOC.SC., Principal, Marlborough College, Blenheim.

• Firth of Wellington, Elliott, J. (1937)
• Evening Post, 16 Apr 1931 (Obit).

To enable it to carry out these and other duties, the Council is required to appoint a Chief Fire Service Officer, a Secretary, and such other officers as it considers necessary. All such persons appointed by the Council are officers of the Public Service.

In 1965 there were 249 autonomous fire authorities each administering the affairs of an urban fire district, which may be a united fire district (larger municipalities), a fire district, or a secondary fire district (small boroughs or county towns). In each district there is a fire brigade with a chief fire officer, deputy chief fire officer, and such other officers and firemen as are required to afford the necessary standard of protection. There are 24 fire authorities employing paid staff and usually referred to as permanent fireman, as opposed to the volunteer firemen who man the remaining 225 fire brigades. The 803 permanent firemen, whose conditions of employment are governed by industrial awards, operate under a duty system of 24 hours on duty, followed by 24 hours off duty, with six weeks' annual leave. Some 6,000 volunteer firemen are volunteers in the true sense of the word, but in some brigades receive a token payment for attendances at fires and drills.

The year 1954 saw the beginning of the Fire Services Coordination Scheme for rural fire protection and operation at emergency fires. With the introduction of that scheme it became mandatory for fire brigades to attend all property fires within 5 road miles of their fire stations, whether or not such fires were within their gazetted fire districts, the cost of such attendances to be recovered from the rural local authority in whose territory the fires occur. Outside the gazetted urban fire district, all fires other than property fires (i.e., grass, scrub, forest fires, etc.) remain the responsibility of the rural local authority, which is a rural fire authority under the Forest and Rural Fires Act 1947. For operations at serious fires there is provision for mutual assistance between neighbouring brigades, and for emergencies there is the Regional Mobilising Scheme. For the purposes of this scheme the whole of New Zealand is divided into 16 regions, each under the control of a regional officer, who in each case is the chief fire officer of the principal fire brigade in the region. The regional officer is responsible for providing reinforcements for fires beyond the scope of the mutual assistance scheme, and for that purpose has the right to call on all brigades within his region, but at the same time has a responsibility to ensure that no town is left unprotected. Provision is made for regional control to revert to a designated secondary control, should regional control for any reason become inoperative. Should it be necessary to seek assistance from outside any one region, mobilising then comes under the control of the Council's Chief Fire Service Officer.

The headquarters of the Fire Service (the offices of the Fire Service Council) is at Island Bay, Wellington, where is situated also the Fire Service Training School, a residential school which was opened on 11 March 1958.

by Thomas Arthur Varley, O.B.E., M.I.FIRE.E., formerly Chief Fire Service Officer, Wellington.

• New Zealand Statutes: Municipal Corporations Acts, 1867, 1876, 1900, 1920
• Fire Brigades Acts, 1906, 1907, 1908, 1926
• Fire Services Act 1949 (reprinted 1958)
• New Zealand Statutory Regulations: Fire Services Regulations 1954
• Fire Services Code of Practices, 1954
• Appendices to the Journals of the House of Representatives

The Fire Services Act 1949 provided for the establishment of a Fire Service Council representative of the Government, the New Zealand Fire Underwriters' Association, the Municipal Association, Fire Service employer and employee organisations, and the United Fire Brigades Association. There is provision for the Secretary for Internal Affairs to attend meetings of the Council. The first chairman of the Council (nominated by the Minister) was the late R. Girling-Butcher. The duty of the Council generally is to administer the Act and some of the specific duties named in the Act are:

• To ensure that every urban fire authority conforms with the Act and maintains an efficient fire service.

• To coordinate the units of the fire service for purposes of rural fire protection, reinforcement at serious fires, or for war or other emergencies.

• To encourage, supervise, or carry out fire-prevention activities.

• To establish a training school and courses of training.

• To classify fire districts.

• To classify positions in the fire service of permanent officers and provide facilities for inter-brigade promotions.

• To approve appointments of permanent executive officers made by urban fire authorities.

• To approve or determine estimates of expenditure of urban fire authorities.

The Municipal Corporation Acts of 1867, 1876, and 1900 contained provisions permitting borough councils to adopt measures for fire protection and the setting up of fire brigades in boroughs, but no similar provisions existed for fire protection in rural areas under the control of county councils. The first enactment devoted specifically to fire protection was the Fire Brigades Act of 1906, re-enacted in 1907 and consolidated in 1908. With the introduction of this Act, which provided for the constitution of fire districts and fire boards, the Government and fire insurance underwriters were recognised as having a responsibility in fire protection and were represented on and contributed to the expenditure of fire boards. A further Fire Brigades Act in 1926 consolidated the then existing legislation and remained in force until 1949. By 1946 there were 60 constituted fire districts, each with its own fire board and fire brigade, and financed by the Crown, local authority, and insurance underwriters.

In addition to the 60 fire brigades controlled by fire boards, there were also 99 fire brigades in boroughs which were not fire districts or within fire districts. These brigades were set up under authority of the Municipal Corporations Act 1920, which contained no provision for contributions from the Crown or the insurance companies, and the whole cost, therefore, had to be borne by the local authority.

In 1938 the then Inspector of Fire Brigades, R. Girling-Butcher, made the first moves towards amending the legislation with a view to providing an organisation for war and civil emergencies, and to improve the finances of the smaller fire brigades. Negotiations continued for several years, and it was not until 1949 that the Fire Services Act, under which the Service operates today, became effective.

Recorded histories of fire brigades in the early days of New Zealand are unfortunately very meagre, but from what information there is available it is known that several brigades were in existence 90 to 100 years ago. In Dunedin, for instance, a number of townspeople formed a volunteer fire brigade in 1861. Other early fire brigades were at Christchurch, Wellington, Greymouth, Hokitika, and Wanganui. These early brigades had little official standing and relied on contributions from the public, business houses, and the local authorities for the purchase of their equipment and uniforms. Equipment consisted largely of manually operated pumps, and later, when boroughs were reticulated with water, handdrawn hose reels.

(Pyrosoma).

This large planktonic organism is closely related to the chainjellies. In appearance it is like a rough leathery cylinder, brownish in colour and semitransparent, and up to about 10 in. in length, though tropical species as long as 4 ft have been reported. In reality a single Pyrosoma is not one individual but a colony of animals sharing a common alimentary canal. Its most interesting feature is its luminescence at night, particularly when disturbed, as, for instance, by the passage of a ship. One observer reports writing his name in letters of fire on the skin of a Pyrosoma, merely by tracing the letters with his finger.

by Richard Morrison Cassie, M.SC.(N.Z.), D.SC.(AUCK.), Senior Lecturer in Zoology, University of Auckland.

(1862–1929).

Barrister and politician.

A new biography of Findlay, John George appears in the Dictionary of New Zealand Biography on this site.

John George Findlay was born in Dunedin on 21 October 1862, the son of George Alexander Findlay, a timber merchant of that city, but his early life was spent on the West Coast of the South Island where he received his early education at Scott's Academy in Hokitika. He matriculated in 1881 and then attended Otago University, obtaining his LL.B. degree in 1886. In the following year he was called to the Bar and practised in partnership with F. G. Dalziell at Palmerston, Otago. He continued his studies at the University, however, and in 1893 obtained the degree of LL.D., which was at that time conferred by the University of New Zealand upon examination, and he was for one year (1893–94) lecturer in political economy at the University. In 1894 he was invited by Sir Robert Stout to join him in partnership in Wellington, and accordingly Findlay moved to that city where he achieved eminence as a counsel. The next two decades saw his steady rise to the front rank of advocates of that era.

As his practice prospered and flourished, Findlay became increasingly interested in politics, attaching his allegiance to the policies of the Liberal Party as led then by Richard Seddon, and after his return from a short trip to England he contested a Wellington seat as a Liberal candidate in the 1902 election. In this election, however, although he was unsuccessful and was defeated at the polls, he maintained his close connection with the Liberal Party, composing much of their election manifesto in 1905. In 1906, when the death of Colonel Pitt left the office of Attorney-General vacant, there was no legal practitioner amongst the elected members of the Liberal Party free to assume that post. Accordingly, Sir Joseph Ward, who had succeeded to the leadership of the party upon the death of Seddon, sought out Findlay for the office. As at that stage no seat in the House of Representatives was available, it was necessary to appoint Findlay to the Legislative Council. Because there were no other members of Cabinet in the Council, Findlay had to assume its leadership.

In view of his relative youth and inexperience in politics, Findlay's appointment was something in the nature of an experiment but he appears to have fully justified the Prime Minister's action. He quickly developed confidence and familiarity with the procedure of the Council and of Parliament, and was largely instrumental in considerably elevating the standard of the debates and discussions in the Council so that the period of his leadership from 1906–11 is considered to mark a very high level of debate. In this period he first held the position of Colonial Secretary until its transformation in 1907 into the portfolio of Internal Affairs, which he held from 1907–09, after which he held the portfolio of Justice and was Minister in Charge of the Crown Law Department (1909–11). In 1907 he was responsible for the introduction in New Zealand of the office of King's Counsel, and he was himself amongst the first to be so appointed.

In March 1911 he accompanied the Prime Minister to the Imperial Conference in London and that same year received a knighthood listed in the Coronation Honours. After his return to New Zealand, Findlay determined once again to capture a seat in the House of Representatives and, as the general election of 1911 approached, he resigned from the Legislative Council in order to contest the Parnell seat in Auckland. Once again, however, he was defeated and as the Liberal Party itself was also ousted at this election, his opportunity for political service disappeared until 1917 when he successfully contested a by-election in Hawke's Bay.

When the term of that Parliament expired in 1919, however, Sir John Findlay did not stand again for election and the continued eclipse of the Liberal Party at the polls meant his disappearance from the political arena. Although he still continued his practice in the succeeding years, the period of his influence on New Zealand affairs as a politician and a barrister was now passing. His eyesight and general health were so failing that in hope of a recovery he took a sea voyage to England in 1929; his health, however, did not improve and on 7 December 1929 he died in London.

Findlay had married in 1890 Josephine Emily, the daughter of James Arkle, of Lawrence, Otago, and there were three sons of that marriage. Only two survived him, one having been killed whilst serving in the armed forces in the First World War.

Outside his professional and political activities, Sir John Findlay throughout his life displayed an interest in education and cultural matters. He lectured at Otago University in political science and, when he first came to Wellington where there was at that time no university college, he also gave lectures, setting aside the fees therefrom towards the funds for the building of the college. After the college was erected, he sat as a member of its council for nine years (1900–05, 1906–10), and was chairman of the council for one year in 1906. He was also a member of the board of governors for Wellington College.

In addition to the specific publications of Humbugs and Homilies (1908) and Imperial Conference from Within (1912), he wrote many articles and essays for newspapers and periodicals (particularly The Citizen, the organ of the Forward Movement) and he gave many lectures and led many discussions on social, economic, and political topics. Sir John Findlay was also for some years chairman of the board of directors of the New Zealand Times Co. The Wellington Shakespearean Society also owed much to him for its creation, and he presided over it for a number of years.

Findlay was undoubtedly a man of great industry and ability, and the eminence which he achieved in his profession, even when in partnership with Sir Robert Stout, is evidence of this. His tenure of the Government portfolios was also one marked by great confidence and competence, and his leadership of the Legislative Council is generally considered to be unsurpassed in its history. Moreover, when he attended the Imperial Conference in 1911 with Sir Joseph Ward, he was recognised both by English and by colonial representatives as being one of the most able members. In assessing his significance as a lawyer and a politician, it is not possible to ignore Findlay's qualities as a man. There was no doubt that Findlay possessed great intellectual ability and industry and that he was one of the best informed men of his profession and of his time. He was a voracious reader (it was said that as a young man he used to read 17 hours a day) and he kept fully abreast of current developments in the political, legal, and economic spheres and in literature and the arts generally. These aspects of his character and mind did have the effect, however, of removing him to some extent both as a counsel and as a politician from immediate popular appeal. He did not shine as a trial lawyer but his strength lay instead in actions involving careful preparation and consideration of legal principles and precedents; and in the public arena of politics, whilst his speeches were always carefully prepared and fluently delivered, they lacked sometimes the quality that deep personal conviction and simple sincerity can supply, with the result that whilst technically they serve as models of rhetoric and argument, nevertheless practically they sometimes failed to achieve their result with the general public. It is significant that whilst Findlay so excelled in the debates of the Legislative Council and in the arguments of the Courts, he was successful in gaining popular support at the polls only once and that not until 1917.

In retrospect, it may be said that Sir John Findlay in his roles of politician, counsel, and man, more so than any other of his contemporaries or members of his political party, comes closest to the present-day conception of the cultured English Liberal gentleman of the nineteenth century.

by Donald Edgar Paterson, B.A., LL.M.(N.Z.), LL.M., J.S.D.(YALE), Lecturer in Jurisprudence and Constitutional Law, Victoria University of Wellington.

• Otago Daily Times, 10 Dec 1929 (Obit)
• Dominion, 10, 12 Dec 1929 (Obits)
• Evening Post, 9, 11 Dec 1929 (Obits)
• New Zealand Law Journal, 12 Dec 1929 (Obit).

The dominant policy objective since the end of the Second World War has been the maintenance of full employment. After the initial period of resettlement of the large number of returned servicemen, there were always many more jobs than people seeking work and labour was generally scarce. Considered from the point of view of promoting full employment, the Government economic policy could thus be regarded as a complete success.

The main weapon used to achieve full employment was a high rate of Government expenditure, supported on occasions by reductions in taxation. On the expenditure side there was a great need for capital reconstruction after the war and particular emphasis was placed on expenditure on transport, communication, and power facilities. Then the “baby boom” of the mid-1940s brought about an increased demand for educational facilities. First, the primary schools, then the secondary schools, and, finally, the universities had to be extended to cope with increased enrolments. In the mid-1950s there was added pressure on resources from the Government-backed housing drive, which gained renewed life in 1958 and 1959 from 3 per cent loans and capitalisation of family benefits. To this must be added the stimulating effects of expenditure on social security benefits. This added to the spending potential of the private sector by providing free services, such as medical treatment, and by transferring income to those who have a high propensity to spend. Direct expenditure by Government or Government-financed housing expenditure thus maintained continual pressure on the country's resources.

The effect on these resources was accentuated by the methods used to finance the expenditure, as over the period Government finances tended to be increasingly dependent on loan money. In one year only (immediately after the 1951 wool boom) was current revenue from taxation and other sources sufficiently buoyant to cover all expenditure. But from then on there was always a gap, often very large, between current revenue and total expenditure. At first it was relatively easy to bridge this gap by borrowing in New Zealand. The economy was very liquid and there were few avenues for investment other than in Government stock. Sufficient loan money was raised to finance a reduction in our overseas indebtedness during the early part of the decade.

In the mid-1950s the Government's total requirements for loan money were beyond the capacity of the domestic market, as there was now greater competition for funds from the private sector. Notwithstanding the proceeds of moderate overseas borrowing for development purposes, the Government's accounts only wavered around overall balance. In recent years a better flow of funds from the domestic market has eased the financing problem, but even with substantial overseas borrowing for balance of payments reasons the Government's accounts have often moved into overall deficit.

Unfortunately, the economy at times became overstrained. At first the result was domestic inflation only, as rising export prices protected the balance of payments. This inflation generated additional Government expenditure as wages and price increases pushed up Government spending on social security benefits, increased the Government's wage bill, and made public works dearer. When export prices ceased to rise and started to slip back during the latter half of the 1950s, the economy became subject to recurring balance of payments crises. The secular rising trend in activity thus gave way to periodic surges, with restrictive import licensing being used to cushion the impact on the balance of payments of the periods of high domestic spending.

Problem of Fluctuating Economy

The basic problem, now that the strong inflationary trend of the early 1950s has been halted, is to find ways and means of avoiding these severe fluctuations. Achieving this will require greater use of fiscal policy as a regulating mechanism, with more attention being paid to the objectives of Government policy other than full employment. The need for this has been brought home by the heavy external deficits we have experienced over recent years and by the growing concern about our continuing ability to attract a large inflow of foreign capital. Even if this could be obtained, there would still be the problem of servicing these loans.

From the nature of its economy New Zealand has a strong propensity to import, a tendency to chronic shortage of overseas funds, and, in recent years, an uncomfortable three-year cycle of exchange crises. To maintain viability in external transactions is now as much at the heart of public finance as are considerations of internal expenditure and receipts on Government account. Budgetary policy must have regard to the influence of Government finance on the balance of payments; and this consideration must also guide economic policy as reflected in the permissible volume of bank lending, conditions of hire purchase, interest rates, wage policy, industrial expansion, and the level of imports.

Provision for the future is another goal that will become increasingly important in formulating of Budget policy. A consistent and coherent policy has to aim at reconciling the demand for a present high level of consumption and the need to save and invest for the future. A rapidly growing population, the expectation of a continued improvement in the standard of living, and the provision of greater assistance to underdeveloped countries, whose progress may well determine our future as a nation, all require the direction of a larger proportion of our current resources to savings and the creation of capital assets. The tax changes and expenditure programmes announced in each Budget must therefore look beyond the needs of the current year.

A greater use of changes in taxation and rates of expenditure to influence the path of the economy is, however, restricted by two factors. First, the nature of Government expenditure has become relatively inflexible. Much is now so entrenched, so closely built into the political, social, and economic structure, that major surgery, though feasible, is hazardous. Change is towards more, rather than less. Government spending: economy takes the form of limiting this propensity of expenditure to increase and proliferate.

There is widespread and long-standing participation by the Government in works and other capital projects, but this expenditure has been held in much closer check than on social services. Some of it, for example, education buildings, is a reflection of a growing essential social service; some is part amenity, part basic service (electricity, telecommunications); some is more economically done or aided by Government on a large scale (land and forest development, soil conservation); and some results from an expansion of policy more on the lines of welfare than on traditional limited assistance (3 per cent house loans). A recurring stimulus to all forms of expenditure is the system of general wage orders. A 5-per-cent general increase in wage rates pushes up Government spending on current account by about £8 million per annum, as well as increasing the cost of works and the operating costs of trading Departments, such as Railways and the Post Office. The cost of servicing the public debt has risen appreciably and will continue to rise until the large volume of low-interest loans issued in the past is converted, on maturity, to present-day rates. On the substantial overseas borrowing in recent years the interest has been higher than on internal loans.

*Conversion loan: no external cash loan.

Note: Yields are gross yields to redemption. There was no external loan and no internal public issue in 1952–53. Where more than one loan was issued in any year, the loan with the highest yield is shown.

Secondly, the political climate that has emerged over a period of years has led to the belief that Budgets should contain only reductions in taxation and never increases, regardless of the economic situation or the endorsement by the people at election time of new programmes of expenditure. When a Budget breaks sharply with this tradition the immediate effect is consternation, though comprehension may follow in time. Even changes in the incidence of taxation aimed at promoting savings or discouraging expenditure, or providing a greater reward for incentive and effort, are fraught with political difficulties.

As about one third of the income tax is paid by companies, there is limited scope for shifting some of it to individuals and thus increasing the opportunity for reinvestment by companies. An unusually high percentage (60 per cent) of taxation is income tax. Though there is a good case on economic grounds for less of this and more of taxes on expenditure, the level of personal and family exemptions from income tax is so high that a substantial shift to a wide range of indirect taxes would affect many who now pay little taxation. Sales tax has been used very little in a discriminating way to discourage expenditure. It arose primarily as a revenue tax in wartime and grew so productive that it became indispensable, even when trimmed to cover relatively non-essential goods. Similarly greater use could be made of trading. Department surpluses to relieve taxation or to provide more funds for capital development of the undertakings themselves.

The role of the Government's financial transactions has broadened over the years, reflecting the evergrowing list of responsibilities accepted by the State. If events in other parts of the world are any guide, then the future should see the Government's power to tax and to spend used in an even more positive manner to promote the development of New Zealand.

by Bernard David Arthur Greig, M.COM., Assistant Secretary to the Treasury, Wellington and Bernard Vincent J. Galvin, B.A.(N.Z.), M.P.A.(HARVARD), Treasury, Wellington.