UNEMPLOYMENT

Press, Volume LXIX, Issue 20989, 18 October 1933, Page 10

UNEMPLOYMENT

BOARD'S FUND KEPT IN CREDIT PRESENT TAXES TO BE CONTINUED MINISTER'S STATEMENT IN THE HOUSE

[From Our Parliamentary Reporter.! WELLINGTON, October 17. The position of the unemployment fund at September 30 last was explained to the House of Representatives this afternoon by the Minister for Employment, the Hon. Adam Hamilton. The Minister stated that m spite of the very heavy demands which had been made during the first half of the present financial year, it had been possible, through the buoyant revenue, to maintain the fund adequately in credit during the halfyear ended September 30. Commitments exceeded the revenue for the period by £343,000. and the Minister stated that it would be necessary to continue the present rate of unemployment taxation for some time. "At the commencement of the financial year on April 1 last there was in the fund an approximate- surplus of £334,000 of revenue over commitments to that date," stated the Minister. "The revenue received or in sight for the period April 1, 1933, to September 30. 1933. amounted lo approximately £2,350,000. For the same period commitments entered into by the board, and estimated to become due for payment by September 30, 1933, totalled £2,498,600. This shows the excess of expenditure over revenue for the half-year of £143,600. In addition to the commitments mentioned above.' the board had at September 30. 1933, entered into commitments totalling £440,800, which, it was estimated, would not fall due for payment until after September 30. If these forward commitments were charged against the revenue received up to September 30, 1933, the fund would be in deficit to the extent of £255,400. The Cash Position. "The cash position of the fund remains satisfactory. At September 30, 1933, the position was as follows: £ Cash in fund .. 600,140 Temporary investment .. 100,000 Total . . 700,149

"It is necessary here to make an explanation of the figures contained , in the quarterly abstract of the rcv- , cnue and expenditure of the unem- ! ploymcnt fund, as published in the ■ Gazette. The balance in the fund, ac--1 cording to the Gazette statement on I April 1, 1933, was £424,426. To.this amount must be added £05,000, being the money in transit from the post office as at that date. This would make a total of £509.426. From this must be deducted the amount of accounts received after April 1, but which refer to work done or payment made before that date. This amounts to £175,500, and when deducted from the £500.426 gives the surplus iigure | of £3134,000 previously mentioned. I "It should not be assumed that the ; whole of the cash in the fund at any j time is available for expenditure," (continued the Minister. "The board's ! revenue is not received in equal in- : slalments in each month. The month |of May yields a particularly large l amount of revenue, since in this ! month, in addition to the usual I monthly revenue from wages tax and 1 the quarterly instalment of the unemj pJoymc.nt levy, and ttie tax on income i other than salary or wages, a conI sidcrable number of taxpayers pay the I full yearly amount due from them in i respect both of the levy and of tax i on income other than salary or wages. j There is thus throughout the greater j portion of the year a large amount i of cash in the fund representing tax i paid in advance, which it would be ; imprudent to spend immediately on \ receipt, irrespective of the calls that ! might subsequently be made on the j fund. Revenue in Advance. , "The extent to which revenue is rei ceived in advance may be gauged from j the fact that the revenue of the board ! from unemployment taxation this year !is estimated at £4,300,000. Assuming | half this sum to become due by Sepj tember 30, 1933, there should have been received into the fund £2,150,000 during the first half of the present year. Actually there was received, or in sight, approximately £2.350,000. Thus no less a sum than £200,000 was received in advance up to September 30. 1933. It should be remembered, also, that a large portion of the casli m the fund at any time is actuallv committed, but claims in respect to such commitments have not yet been | received from various employing j authorities who have been authorised |to incur the expenditure, and for : whose reimbursement the cash in the i fund is available. Some of these commitments may, of course, not mature but in the meantime funds must be held to meet them. It will thus be seen that the actual cash in the fund is not more than is reasonably necessary m view of the amounts of tax received in advance, and commitments , mane but not yet charged against the

Heavy Winter Burden. 'Sonic indication of the heavy burden carried by the fund during the winter just ended is shown bv the tact that expenditure (that is payments made and commitments outstanding), from April 1, 1933, to SenW««rnn 0, 1933 ' t ? tnl a PP™*<m"tely .-L.i.ittJb.OOO for the same period of last year. Revenue (including revenue in advance) received or in sight for the ?n"?on, Ap / il },• im ' t0 September 00, 1903, totalled £2,350,000. Taking t n? l^™ al^ d half-yearly revenue at £2 150,000, it will be seen that in the half year ended September 30, 1933 the commitments exceeded the revenue for the period by £348,600. Phis i s not, of course, an unusual position. It is only to be expected that in the winter months, when unemployment is at its peak, greater expenditure on unemployment relief is called for. "It is estimated that the Unemployment Board's revenue for the financial year will be £4,300.000. Adding to this the surplus at the beginning of the year, namely, £334.000. it will be seen that the funds available for the year total £4,834.000. From these figures it will be observed that the board's average weekly income for this financial year is estimated at £!>2,700. For a number of weeks past the weekly expenditure has been more than £IOO,OOO. As stated above. the sum of approximately £2.498,000 has been committed in the first six months of the year. If the board is to complete the year without reducing its working balance below reasonable limits, the expenditure from now to the end of the year will require to be considerably less than that in the six months ended September 30, 1933. From these figures the necessity to continue for some time yet the present rate of unemployment taxation will be evident. Fortunately the worst period of the year for unemployment is now over, and with the improvement now evident in the economic situation, and the commencement of the usual seasonal activities, the board is hopeful that a considerable reduction will take place in the number of