UNEMPLOYMENT.

Press, Volume LXV, Issue 19669, 12 July 1929, Page 12

UNEMPLOYMENT.

STATE SUBSIDIES TO CITIES. DEPUTATION TO PRIME minister. AN EMBARRASS PROBLEM. [THE PRESS Special Serrlca.] j WELLINGTON, July 11. j In response to representations by & deputation consisting of the Mayors 01 the four chief centres, who requested that a £ for £ subsidy on unemployment. relief expenditure should replace the present subsidy on the cost of labour the Prime Minister stated this morning that the Government was not under any obligation to provide lor the relief of unemployment, but promised that Cabinet would give the representations its earnest consideration. Mr D G. Sullivan, M.P., who represented the Mayor of Christcburch. introduced the deputation, and stated that the deputation desired to place before the Prime Minister the difficulty experienced by local bodies in availing themselves of the Government's subsidy for unemployment relief. i" e Government had offered £25,000 to each of the four centres, or a total of £IOO,OOO, but it was necessary that they should spend a total of £300,000 in order to get that subsidy. Such a position placed a very heavy burden on local bodies, and on account of the j conditions under which the subsidies I were granted, work had to b© under- I taken which in ordinary circumstances ( would not have been considered. He j pointed out that there was a growing 1 disinclination on the part of rate- j payers to increase financial liabilities. j The deputation asked the Government to ease the situation bo that the City Councils could put works in hand •without so large a qualification as to the amount they had to find in order to receive the Government subsidy. The Mayor of Wellington (Mr G. A. Troup) quoted the amounts provided by the City Council for the past three years, and the amounts received by way of Government subsidies in each case, the latter being about one-third of the total cost of the work. The previous vear the total expenditure had been *£54,900, on which the subsidy had been £19,500. This year, however, the expenditure would be considerably heavier. The Wellington Council's commitments by loan expenditure would be no less than £B9,ouu, on which it was expected to reoeivo a subsidy of £45,000, which, under the most favourable conditions, was the most they could expect so far as y. eilington was concerned. The cost ot labour on relief works represented practically the whole expenditure. An unemployment insuranoe scheme hail been drawn up by the cities, by which it was hoped to make provision to meet unemployment a« it arose in the future. They thought the Government might well take up the proposed scheme, which provided for Id in the £, to be paid on wages received Id in the £ from employers, Id m the £ f 1 " municipalities and local bodies out the Dominion, and Id in t» i from the Government. Even if the Government contribution were reduced to id in the £, there would be ample to meet requirements. .That w°uld involve a total contribution of £IW,000 from the Government. Alternatively, they suggested that ment should subsidise local body relief works, £ for £, over -the total coat, and that, allowing the present subsidy to stand, the Government ahoukl g£« the option, instead of carrying oat ttie work bv day labour, to do it by contract. Mr .Troup suggested that contributions should cease when unemployment was non-existent. The Mayor of Auckland (Mr Baildon) said that the trouble in Auckland was very similar to that m Wellington. Through the use of unemployed unskilled labour, it W8 « timated that the works put in hand cost 23 per cent, more than if the work had been done ordinarily. more liberal subsidy were received, several more works could be put m hand. He thought it would be more satisfactory if a £ for £ subsidy were granted by the Government. At present they could not find work to justify the" Council spending £2 to tho £1 subsidy . The Mavor of Dunedin {Mr R. S. Black) said that they did not want it thought that they were looking a gift horse in the mouth. It was difficult to find work to comply with the conditions on which the subsidy was offered. He stated that he waa in agreement as to the efficacy of an insurance scheme for provision against slack seasons.

In reply, the Prime Minister said that the representations of the deputation would reoeive not only hie close consideration, but also that of his co-l-eagues, for it was necessary to place the matter before Cabinet for consideration. As an increase was suggested in the amount provided the Government, he considered it nis duty to point out one particuar aspect of the question that struck him. They coald not keep the supplies of money going for unemployment relief at the rate at which requests were being received at present. They had not the maximum amount of money available this year to enable them to spend £50,000 more ii subsidies. It was beyond the ordinary means of the country to provide large sums for extra expenditure. If the unemployment in the cities were the only unemployment in the country, the position would be a comparatively easy one, but the Government was "providing for thousands of men on works quite distinct from the City Corporation relief works. There was also another aspect to the matter. Although the deputation represented that the Government subsidy amounted to only one-third of the total expenditure, the country was not in any way obliged to provide anything by way of subsidy on local relief works. The subsidy given by the Government was merely to help unemployment It had taken on ita shoulders relief to cities that it was not obliged to give.

Mr Sullivan: But is not unemployment a national obligation? ''lt is tending that way, bat it is not yet a national obligation," said Sir Joseph Ward- "The Government has not undertaken to make provision for money to keep unemployment work going on all over the country." Mr Troup: Is not the obligation more on the Government than on the municipalities? The Prime Minister said that the municipalities had undertaken certain work -vrithin their boundaries, and, but for the exigencies of the labour trouble, they vrould have to provide the maximum amount of obligation. The Government was providing assistance aolely for the purpose of trying to help in the alleviation of the trouble. Mr Baildon stated that they would not have been able to do one-tenth of the work done in Auckland had it not been for Government assistance. The point wa« whether the Government waa warranted in going on with the contributions to the municipalities, and whether the money should not be diverted to railway and road relief works. The point was reached when the national purse was not big enough to meet the added requirements the Government was asked for. They could not ignore the fact that the Treasury had only a limited amount of money. Mr Troup had said that the reaaoa vby th« contract fyttea ra cogfwtod

wmi that it would sot increase the Government '• contribution. Sir Joseph stated that* he was sot prepared to answer offhand with regard to the contract system, but he would consider it. The time waa coming when the Government would have to consider making permanent' provision for unemployment. They were getting into a position when a big scheme was required to deal with I the problem on national lines. He j would go into that aspect again, for j obviously the Government eould net look with complacency on the disturbing conditions arising throughout the country on account of unemployment.. The Government was doing the best it could, and yet members of Parliament were crying out for no further expenditure on railways. If the railway work* were cut out there would be still more unemployment. The Government waa laying down a well-defined railway policy. No further expenditure waa intended on short distance railways, but the Government was committed te a certain number of long distance railways, and he believed that wms the best policy for the country. In conclusion, he said that he woald carefully consider their representations, as the matter could not end where it was. He did not want te wad them away thinking he had gives them all they had asked for. Parliament would have to be eonaultod, and a national scheme propounded for meeting unemployment. It seemed that the responsibility of Hading work for unemployed was centring on the Government, and that had never occurred before. It raised a tremendous iasue, and would have to be considered earefnlly by Parliament.