COMMENT FROM THE CAPITAL DEFENCE CUTS ARE PART OF GENERAL PATTERN, BUT-

Press, Volume CXI, Issue 32531, 15 February 1971, Page 12

COMMENT FROM THE CAPITAL DEFENCE CUTS ARE PART OF GENERAL PATTERN, BUT-

(By (

C. R. MENTIPLAY.

our Parliamentary reporter)

W ELLINGTON, February 14.—A general “trimming” by 4 per cent ot the costs of all main Government departments is likely to be followed by a still firmer clamp on the Estimates for the 1971-72 year. This is indicated by the fact that this year the call to economise in costs was made much earlier than usual, and by the parallel fact that it has been reinforced by some stern Ministerial warnings.

A cut of 4 per cent means many things. Some departments can handle this with ease, merely by readjusting payments and responsibilities for services. Others, whose payments largely relate to wages and equipment, have a more difficult problem. There is also the undeniable fact that when wages and costs are rising, the cut must be of more than 4 per cent to be effective. At present, money is a very variable yardstick by which to measure economies. In any department, last year’s expenditure will not buy this year’s requirements. Even to “hold the line” on last year’s figures would require considerable retrenchment. In simple terms, and relating the suggested cuts to last year’s estimates, the amounts would be as follows: Agriculture, $2,000,000; Defence, $4,000,000; Education, $8,500,000; Health, $9,000,000; Post and Telegraph, $4,600,000; Public Works, $2,000,000; Social Security, $11,800,000.

Against these retrenchments, the full budgets on some of the other departments would seem very small. How, for instance, can those responsible trim 4 per cent off the following 1970-71; Budget allowances: Customs, $2,900,000; Foreign Affairs, $15,050,000; Forest Service, $8,750,000; Justice, $11,550,000; Labour, $5,520,000; Lands and Survey, $6,650,000; Maori Affairs, $8,400,000: Marine, $10,600,000; Mines, $1,320,000; Police, $15,700,000; Roads, $2,350,000; Scientific and Industrial Research, $11,800,000; Tourist and Publicity, $6,410,000? “Across the board” / The direction was for an “across-the-board” reduction —but how many of these divisions of Governmental activity can really carry out this direction? “Across the board” means a general trimming—but there are large areas of expenditure in each department which must be excluded. You i cannot cut a department’s j wage-bill, for instance, with-1 out discharging staff. The: departmental head who I would suggest going to his staff and telling them to accept a 4 per cent cut in wages would soon be in the "expendable” class. In fact, the wages section' of any Departmental Estimate] has risen steadily during the! years. The complete acceptance of periodic adjustments based on the cost of living has made sure that this is one part of “the board” which cannot be touched.

Defence provides an objectlesson for study. The sum of $96,860,000 was provided last year on the Defence vote. This was divided into four sections, one covering general administration and cadet forces, one forces for overseas deployment, • one the provision of a New Zealand support base and its administration, training and supply, and one covering ancillary tasks.

In the 1969-70 year, a total of $42,460,000 was voted for salaries (including $5,564,000 for civilian salaries) but actually the salary expenditure in that year was $43,502,324 (including $6,096,610 for civilians employed in the department).

Allowance for this was

made in last year’s estimates, for the year ending March 31. 1971. A sum of $44,705,000 was voted. In the meantime, however, wages have risen again, and the expected wage bill for Defence in 1971-72 will be close to $46,000,000.

This does not represent the total pay and allowances of persons engaged in Defence. In the 1970-71 Estimates, of $96,860,000 voted for Defence. 1553,660,000, or 55.2 per cent, was for pay and allowances. This much of “the board” [cannot be touched unless by retrenchment, which is “not on” so far. Policy and cuts

Expenditure has to be ad : justed to capacity. This is| true, but it is also a fact that j external policy must be ad-[ justed to the capacity to carry it out. If a firmer foreign policy line is needed (which has been implied in high places) then the capacity to support the wider plan must be there.

Defence may achieve its 4 per cent cut but to do so (that is, to achieve a saving in excess of $7.5 million this year, if not more) it will have to curtail training, cut 'down on the expenditure of (ammunition and fuel, and (even “mothball” some of its equipment.

This is also likely to affect very greatly the planning of New Zealand’s Defence expenditure over a five-year period. It may be remem- i bered that less than a year; ago our Defence chiefs were given three options to consider. They were: A limited development of the armed services, to cost $568,000,000 over the five years;

A programme containing some restrictions on the purchase of modem equipment, to cost $540,000,000; A programme which would curtail some military activities, force the disposal of sortie equipment, and release some personnel, to cost $500,000,000. The figure finally approved I was close to the middle (option. On this, it is under- | stood, New Zealand’s Defence policy, and particularly ‘ our overseas commitment, has been based. To make 'our armed services fully efficient, considerable pruning has already been carried out, land the services are danger- . ously near to the bare bones. The four-frigate navy is a bare minimum, with our

South-East Asian commitment. Shortly the "loan” vessel Blackpool will be returned, and the new H.M.N.Z.S. Canterbury will arrive—but there are rumours that the not-so-new H.M.N.Z.S. Otago is running into ever-higher cost patterns.

The Navy has also acquired a new research vessel, but still needs a replacement for the ageing Lachlan. More pressing still is the demand for fast, long-range patrol vessels to replace the wornout Fairmiles. A specification for these should be on the world shipbuilding markets this month. , The Air Force has its jOrions, its Hercules transi ports, its Skyhawks, and | soon its B.A.C. Strikemaster trainer—but No. 41 Squaddon still flies its ancient Bristol Freighters with their outmoded navigational aids all over South-East Asia, and there is no early hope of replacement. The Army, switching bases jin Singapore, disengaging ifrom a combat role in Vietnam, and turning to an instructional role in the country, needs more money, not less.

Not so very long ago, Defence and Education used to have similar Estimates. Today the total Defence Estimate has still to reach $100,000,000, while the Education Estimates passed the $200,000,000 mark for the I first time this financial year, with a vote of $212,500,000. Education is actively cutting back. The recent decision to withdraw part of the adult hobbies assistance, plus one soon to be made on payments by overseas students coming to New Zealand, are illustrations of this. But in these internally peaceful days Education has a better public image than Defence—and the armed services tend to lose in any financial confrontation.