The Press WEDNESDAY, NOVEMBER 23, 1966. The Cost Of Promises

Press, Volume CVI, Issue 31224, 23 November 1966, Page 20

The Press WEDNESDAY, NOVEMBER 23, 1966. The Cost Of Promises

Mr Holyoake has put the cost of Labour’s election promises at £52 million. Labour spokesmen could, and no doubt will, dispute this estimate, for the Labour manifesto is deliberately vague wherever promises to provide some new State service, or to extend an existing service, are made. “ The operation of the “ Earthquake and War Damage Act will be reviewed “ to ensure that adequate and fair coverage is ex- “ tended to cover equitably storm damage to insured “ property How much is this likely to cost? How much would it have cost in recent years? Voters are given no hint in the manifesto. “ Labour will make “ teaching more attractive by providing higher "starting salaries and promotion prospects”. How much “ more attractive ”? How much would Labour’s proposed salaries cost the taxpayer? Some of the other ways in which a Labour Government would spend more taxpayers’ money, in similarly vague amounts, include the following: farm loans free of interest for the first two years; more training colleges, television teaching aids, assembly halls, teaching equipment, university building, university salaries; foreign aid; power schemes; Government superannuitants; voluntary welfare organisations; additions to the free drug list, social security payments to doctors, dental services; more liberal capitalisation of the family benefit; subsidies on rates of people on low incomes; National Roads Board payments to bridge and tunnel toll authorities; higher social security benefits. There are other minor, or more nebulous, hints of increased expenditure.

It is not easy to estimate the total cost of Implementing this programme. By how much would social security benefits be increased after “ a thorough “ nation-wide investigation into the actual living costs " incurred by single and married beneficiaries ”? How much extra would beneficiaries receive on March 31, when the promised “ interim payment ” became effective? An increase of 2s 6d a week, for instance, would cost £2 million for a full year. Mr Holyoake must have had to make assumptions such as this before arriving at his estimate of £52 million as the cost of Labour’s promises. He does not specify his assumptions, just as the manifesto does not spell out its promises in detail; but no rebuttal of Mr Holyoake’s claim will be convincing unless it does specify the assumptions on which it is based. National’s list of promises is less enticing—and much less expensive. Attention will be paid, the policy statement says, to priorities in capital spending; welfare benefits will be increased, but selectively; export industries will be promoted. The emphasis throughout the Government party’s policy is on more efficient spending of taxpayers’ money. A Labour Government “ will introduce taxation concessions “ that reward those who save before seeking to invest "in productive enterprise . . . Individual income " taxpayers will be encouraged by tax concessions ...

“ to invest in development bonds ”. Labour promises tax concessions, some of which “ may well take more " than three years to attain,” while promising an increase in State expenditure of the order of tens of millions of pounds. The conjunction is not impossible; it might be achieved by creating more credit through the Reserve Bank. Voters who want inflation at the rate of something like £5O million a year will vote for Labour.