RISING NATIONAL COSTS.

Press, Volume LXVII, Issue 20414, 8 December 1931, Page 9

RISING NATIONAL COSTS.

♦ | POSITION DECLARED ! SERIOUS. MR MACHIN'S REVIEW. CHAMBERS OF COMMERCE TAKE ACTION. "I think that when people understand tho way in which the 26 million pounds a year they are paying in local and national taxation are being spent, they will demand a reduction in this expenditure," said the vice-president of the Associated Chambers of Commerce of New Zealand (Mr William Machin), explaining in an interview with The Piiess yesterday the need for such an economy campaign, free from political influence, as the Associated Chambers have decided to introduce. The Canterbury Chamber has already promised its fullest support to the movement, and will combine with other Chambers in a general agitation for reduced expenditure. Public meetings will probably be held in all parts of the country, and it is hoped that the Government may be induced to estabish not only the Commission to investigate local body expenditure, which it has promised, but a strong and impartial Commission to investigate national expenditure, so that both may report to Parliament before the next Budget is prepared. The president of the Canterbifry Chamber (Mr A. O. Wilkinson) said that whilo the Government had done something towards reducing expenditure, a strong Commission, completely free from politics, was -needed to examine the whole field of Government expenditure. It was quite definite that expenditure could be reduced without dangerously curtailing any of tbe services. The Canterbury Chamber had decided to give its fullest support to the movement, continued Mr Wilkinson, and at the last meeting a committee comprising Messrs W. Machin, H. S. E. Turner, A. C. Bretherton and T. N. Gibbs was appointed to go into the question locally.

A Canterbury Proposal. Mr Machin explained that for many months the Canterbury Chamber had been suggesting that the Government <,nd local bodies should bring expenditure within their incomes. The Chanil«r prepared a case for submission to * lie conference of the Associated Chanihers. There it had been accepted unanimously, and the Associated Chambers had now decided to carry out a campaign among the business community throughout New Zealand with the idea of helping the Government to survey public expenditure and take drastic steps to reduce it. . "We feel that the two Parties in the Coalition are both more or less involved, and may therefore be inclined to handle tho expenditure more gently than the circumstances warrant, | added Mr Machin. "We consider that the circumstances are serious, and as prices are not showing any signs of improvement and production is suffering in some parts of New Zealand, the only alternative is to cut expenditure, particularly Government expenditure which has remained more , rigid than the overhead expenses of- any,business firm. "Spending Beyond Means." x "We think an independent enquify will reveal that New Zealand is spending more on its public services of all kinds, far more than it can afford. We remember that the Macmillan report, though a very drastic document, received almost universal approval from the British taxpayers. Wo think that a similar document in New Zealand will have the backing* of all business people and of all the taxpayers. Further, it will probably strengthen the hand of the Government in making economies." The Chambers of Commerce, he emphasised, were not looking for a job. but they would willingly give help if help was required. l*he immediate steps were to start a campaign through New Zealand to inform the Chambers and business people of the salient facts of the national expenditure, facts which would be commonplace to most readers of The Pkess, but which must be the basis for any reform. Increases in Expenditure. Mr Machin proceeded to indicate the chief increases in expenditure. In 1930 the national expenditure was £24,874,000; in 1931 it was budgeted as £24,763;000, a small reduction. In the recently revised Budget tho expenditure was £24,540,000, a reduction of apaltry £200,000, or less than one per cent. It was true that the Government had made some economies, but almost all the money saved in one direction was being spent in another. The state of the national finances was most serious, and such that the establishment of a National Economy Commissidn was imperative. In the year 1904 the Domin ; ion's national taxation was only £3,500,000, or. £4 8s 4d per head of population; local taxation was £1,000,000, or £1 6s Od per head—a total/ of £4,500,0(10, or £5 14s lOd per head. In 1919 tho national taxation was £13,750,000, or £ll 17s Id per head; local taxation was £3,000,000, or £2 13s 9d per head; and the total £l4 10s 10d per head. In 1930 the national taxation had risen to £19,500j000, or £l3 3s 7d per head, while local body taxation had risen to £6,500,000, or £4 8s 7d per head —a total of £20,000,000, with an average per head of £l7 12s 2d. National and Local Body Debts. The Dominion's National Debt, which was £176,000,000 in 1919, increased to £267,000,000 by 1930, and interest payments from £5,000,000 to £9,000,000, an increase of 64 per cent. On the local bodv debt interest payments had grown , from £1,500,000 to £4,500,000, an increase of - 200 per cent. The national debt had increased by £88,000,000 in ten years; and the local body debt by £40,000,000 in tho same period. According to the latest statement, the local body debt was £71,000,000. There were 705 local authorities one for cverv 2000 people in the country. The liabilities of these authorities had increased enormously during the last ten vcars: — . . Inc. Liabilities Per Cent. 1920-1930. Counties . - • • 464 Road districts .. 456 Power Boards .. 458 Drainage Boards .. 732 All local bodies .. 160 "That is surely a state of affairs serious enough to make anyone pause," Mr Machin commented, "and before we ruise any more money the taxpayers of

the Dominion should have available information similar to that of the Macmillan report in England, a report that was extremely distasteful to the Government in power, but 'which has had a great effect on public opinion concerning readjustment. Growth of Departments. '■No costs have increased more largely than public expenditure. This country has an enormous army of public servants, and -while I would say nothing in derogation of these men or o£ their desire to serve their country, there ar® too many of them and they spend too much! I believe that there are about 42 Government Departments, and it was stated recently that in 1925 there were 81,847 Government and local body employees of a total of 401,455 wag®earners in the Dominion. "While the increase in population from 1914 to 1928 was 30 per cent., the increase in the number of public servants was 83 per cent., and the increase in the cost ®i administration was 169 per cent. "These public officials spend- money under Acts of Parliament which ai* flung at them by Parliament itself to administer. We all know that tfces* Acts are passed, and spending Departments of the Government created in response to sectional public pressure which our legislators cannot withstand. I* good times taxes were high; to-day they are crushing. All these items of publie expenditure should be examined and tabulated, and put before tie pufcfia in the form of a Macmillan report,, showing the cost of services in comparison with their values and our ability to pay for them." Taxation of SO Fee Cent. < 'in 1929-30 the national productive income was about £126,000,000, and national and local taxation about £26,000,000 —more than 20 per cent, of income. To-day the income had declined to £95,000,000 at most, from which possibly more than £26,000,000 of direct ana indirect taxation were t» be extracted. "With a total productive income os only £95,000,000, and a total inco®* from our overseas exports of less than £35,000,000, from which most be deducted loan charges of nearly' £9,000.000, payable overseas, is it not a grave and startling thing to find that we are extracting from 'the pockets of the people no less than £26,000,000 in taxation." NEED FOR ECONOMY. MR MASTERS'S WARNING. [THE ?BSS3 Sp«cl»l S«rTlc«] WANGANUI, December 7. The Hon. It. Masters said at the opening of the new Technical College hostel, which cost £31,000, that v New Zealand had been generous in all matters pertaining to social services, and had been proud of it, but in times of industrial depression such services became burden some. While such expenditure w»* desirable in normal times, in times of depression people would have to realise their responsibilities, and give serious consideration to reduction in expenditure. Reduction in expenditure in all Government Departments, especially o® ' the administrative side, would come under the Government's consideration in the near future. The farmers of New Zealand were the men who were providing the money to build such I structures as the new hostel, and until | more of their produce was sold at bet | ter prices the country would have to j slow up in expenditure. Education Department. ! There would be strict economies in the Education Department, but he stated definitely that the chances of boys and girls of New Zealand would not be affected. In regard to the reported curtailment of the free-place system, lie said that if he had a business manager in his business, he would leave him alone for twelve months, and at the end of that time he would expect * balance from him, and he would take stock. That was what he was doin? now in regard to secondary education. It was his duty to see that the basis of education was sound before children were allowed to go to secondary schools. In regard to unemployment. vis#d boys who had trained for specific professions or trades to take any job that they could get. If fliey work they would not get <bu, work and application would get the average New Zealand boy as far as ae Ulced to go. Mr Masters said that be had made arrangements to call a conference of all those who would be aW» to help in formulating sekanua to jive employment to boys leaving school.