The Dominion THURSDAY, JUNE 29, 1922. THE PROBLEM OF ECONOMY

Dominion, Volume 15, Issue 234, 29 June 1922, Page 6

The Dominion THURSDAY, JUNE 29, 1922. THE PROBLEM OF ECONOMY

A PASSAGE in the Governor-General’s Speech to Parliament which particularly deserves attention relates to national economy. Premising that the Estimates have been prepared with a view to rigid economy, tho passage in question asks members to give tho Government thenearnest assistance in further curtailing public expenditure. The need of such an appeal will bo apparent to all who have followed recent criticism of the Government’s financial administration. So far as a proportion of its critics are concerned, the Government is in the awkward position of being told that it is bound to economise, but must on no account effect economies. A late contribution to criticism of this nature is made by the Welfare League. It cites the official- figures, which disclose an enormous increase in departmental expenditure since 1914-15, .and even since 1918-19, and urges tho imperative necessity of reducing, this expenditure to more modest dimensions. So far the league is on unassailable ground. / There is no 'doubt that high taxation is stifling trade and industry, and it is obvious that taxation cannot be reduced until public expenditure has been cut down. It is difficult, however, to follow the league in its further criticism and proposals. While it demands a lowering of expenditure, it opposes any cutting of salaries. This, it says, is "a makeshift, often unjust and bound to cause discontent. ,, Tho only way to effect real ecpnojny, it adds, "is to overhaul our great Public Departments and reorganise with the assistance of outside expert advice, which would be given voluntarily.” . What exactly does this mean? What are the economies that the Welfare League has in view ? It points out that departmental expenditure, which stood at £7,874,000 in 1914-15, increased in 1918-19 to £9,4114,000, and in 1921 to £15,592,000. In seven years departmental expenditure increased by nearly £8,000,000. During the three years to March 31, 1922, it increased by over £6,000,000. This admittedly is staggering, but- in order to determine the possibilities of economy, it is necessary to find out where the money represented by the increased expenditure has gone. As various official reports and Ministerial statements have most of the increased outlay is accounted for by wage and salary increases and the higher coit of materials. In the Railways Department alone, wages absorbed £910,000 more in 1921 than in 1920. Within the three-year period selected by the Welfare League, substantial additions were made to the wages and salaries of all State employees to offset the increased cost of living, and heavy increases occurred in the price of coal and materials of all kinds used by the Railways, Post and Telegraph, and other Departments. In Parliament last session the Hon. 0. J. Parr compared the departmental expenditure of 1920-21 with that of 1913-14. He showed, that of a total increase of £8,000,000 more than half was due to the increase in wages. Other items were an • enormously increased outlay on coal—the Railways Statement has since disclosed the fact that the cost of coal 'actually consumed on the railways was £940,000 greater in 1920-21 than in 1914-15—and an average increase of 350 per cent, in the cost of material and equipment used by the Post and Tielegraph Department. There were such items also as an increase qf over £200,000 per annum in hospital subsidies. We mention these facts because we are anxious to bo enlightened as to how the increased expenditure due to increased wages and salaries is to be reduced, without touching wages and salaries. What does the Welfare League mean when it says the Government is right to .practice economies and wrong to cut off any part of the increased salaries which have helped to make economy iiecessary ? Is the league like some of the politicians, shirking an unpleasant issue?