STATE SPENDING CRITICISED.

Press, Volume LXVIII, Issue 20622, 11 August 1932, Page 8

STATE SPENDING CRITICISED.

PUBLIC'S INCREASING DEMANDS. i. —— REDUCTION OF COSTS URGENTLY NEEDED. ADDRESS BY SHEEPOWNERS 9 PRESIDENT. Stern criticism of Government spending to meet "the ever-increas-ing demands of a luxury-loving public" and of the burden of costs that was thus being placed on industries already overburdened was voiced by Mr E. Hay in his presidential address before the annual meeting of the Canterbury Sheepowners' Union last night. "The prices received for our produce are so much below the costs of production," said Mr Hay,, "that unless these costs are reduced or we receive a substantial lift in prices—higher, I am afraid, than we have any prospect of obtaining—enormous areas of grating country must be abandoned." Unless relief of this kind was speedily given, he believed there was no question that New Zealand would have to default on her' debt services in the near future. "The depression was with us last year and the year before, and I am sorry to say it is even more pronounced to-day than was the case last year," began Mr Hay. "Wool has still further declined in value as compared with last year, our frozen meat is much lower in price today than it was a year ago, and byproducts, speaking generally, are to-day practically unsaleable. As wool produced during the two previous seasons showed a substantial loss to the grower, it must be obvious that the loss to be faced for the season just past must be still heavier, and it becomes a question as to how long the primary producing industries can survive. I feel I need not stress' the point that in this Dominion, if the primary producing export industry fails, then the whole community must also share in the collapse and its effects." Hope in Ottawa. If prico levels did not rise or coat levels fall sufficiently, he went on, the immediate outlook was gloomy indeed, as primary producers could not go on producing at a loss for very long, and neither could the country carry on on the present scale of costs if prices remained at the present level. They were all looking to the great Conference at Ottawa where some of the best brains of the Empire werej gathered. THey could only hope that as a result of the discussions the road might be made easier l for industry, and j that a foundation would be laid for a< financial policy on an Empire basis, which would enable a lift in prices to be achieved. If this was done even to a limited extent, he believed that there might be some hope of meeting the situation adequately without the necessities of the situation imposing undue hardship upon the community as a whole. Costs of Government. "It is my opinion, however, that in the meantime, more can be done in New Zealand in the way of reducing our costs," continued Mr Hay. "We have during the past few decades of rising prices and general prosperity gradually evolved an unduly expensive aystern of government. Enormous increases in the personnel of the various Government Departments—and also additional Departments—have been created to meet the ever increasing demands of a luxury loving public. Successive Governments alone, however, in my opinion, cannot justly be blamed for tho whole of our troubles. Our people themselves are in a very great measure to blame for the existing state of affairs, but wherever the" blame lies, wo cannot ignore the urgent need for retrenchment and cutting down of costs in every direction. When I say costs, I mean all costs, and not wage costs only. "We are all agreed that under present conditions, there are too many Government Departments, and too great a cost in running them. A few years ago at a county conference in Wellington, the question of town planning was discussed. Some of those present opposed the idea that local bodies should have to carry this extra expense for such a purpose. There is now,' I believe, a Government Department of Town Planning. The heavy cost incurred (and if previous experience is any criterion, Ithere is every possibility of this, the way the Government runs-most things) must be borne by the taxpayer who is already at his wits' end to raise sufficient each year to meet the increasing demands of the Government and local authorities." Departmental Extravagance. He wanted to know what is the Use of Town Planning and other Boards; statistics of how many sheep-skins a man had in his wool shed, and what was the weight of the Wool on each skin; how much firewood he had cut oh his farm, how much did he burn himself, and how much did he sell; how many turkeys had he got, and did he run ducks with them, or did he keep fowls. What was the use of tabulating alj this sort of stuff if they were all going to be oh the rockß in the near future! It was common knowledge that extravagance is the outstanding feature of most Government Departments. Then why did the country go on doing these things? "It is- generally acknowledged that we cannot afford it, but wo still go on," he said. "I really think the Government should get out of all business With which it comes intq competition with private enterprise—out of the State coal mine, out of the State, fire and life insurance, and all other such concerns as these —and leave that class of business to be done by private enterprise in open competition, and I feel sure we taxpayers will benefit. weight of Taxation. "This leads us to the next question and that is the weight of taxation generally, which is a crushing burden today. It has become so heavy that it is stifling enterprise, and making, us say, 'Well, what is the use of making an income or making much because no

matter what profit is made the State will get the most of it.' " All would have sympathy with the unemployed, but the position to-day was that moßt industries. were being forced to pay excessive costs all round, which were rigid under statutory fixation. As these costs made it impossible to carry on at a profit and lower rateß could not be paid under the various awards, the only alternative employers had was to dispense with the services of thousands of workers, and these became a charge on those who were left in employment. Thus economic law, being * ignored in one direction, was oper» ating* in a roundabout way to the detriment of many thousands of deserving and Willing workers. Those left in employment were getting more currency payment than their labour was worth under present conditions, with the result that others lost their jobs altogether as producers in their particular industry, but , had to be maintained at the esyense of that industry just the same, for no revenue resulted from the great bulk of the work now being carried out by unemployed throughout the Dominion. Cost of Unemployment. v "With price levels as they are to-day* how long can this last, this process of scattering largesse to the unemployed section of- the community, which has been taken from the pockets of those only who are still working!" asked Mr Hay. To-day the Dominion is paying out for poor relief under the unemployment tax alone more than the gross value of our Dominion's wool clip, including the woolpacks, to purchase Which the sheepowner in many casei has had to increase his overdraft. "When we remember that in addition to this Our debt services require for interest and sinking fund practically the whole of the gross returns for our lamb atad Witter, the seriousness of the present position wilt be appreciated. In fact, the position is so serious in my opinion that unless speedy relief is available to us, there can be no question but that we must default in the near future." Fortunately the internal burden of costs previously imposed with . very little regard to all laws of ordinary common sense, did show signs of being lifted at least to some extent. They could only hope that industry could readjust costs Within itself to a point that would, to a very great degree, at rate, restore the balance between, costs and prices. The prices for products had followed the overseas trend of currency values ~ while costs had not moved in sympathy; if the two had njoved reughly in sypipathy with each .other, then New Zeaiand would have been in a better position all round today. In other words it would not matter to the producer so much whether wool, for insta&Ce, was sold at 6d pel lb or Is, provided that the margin of profit per lb were the same, in each case after costs had been met. Maintaining Quality. "We are all hoping that as a result of the Ottawa Conference, a certain amount of relief through an adjustment of currency on an Enypire basis will be nlade possible for us, but the many conflicting interests and difficulties in the way of currency adjustment are fully recognised. Whether or not relief can be afforded through currency adjustment tiirte alone can telj, but J believe in th<? jpeajitinje .it behoves each of us to do his job to the best of his ability, maintaining the , high qn&lifcjr of ' our exports, and where possible increasing the quantity produced, denying ourselves of luxuries, and reducing our demands for philanthropic legislation, and at the same time assisting the Government to reduce its costs all round." ' ■