The Dominion THURSDAY, MARCH 19, 1931. THE PUBLIC SERVICE CUT

Dominion, Volume 24, Issue 148, 19 March 1931, Page 8

The Dominion THURSDAY, MARCH 19, 1931. THE PUBLIC SERVICE CUT

General support of the Government’s proposals to apply a reduction of 10 per cent, to salaries and wages in the Public .Service was conveyed in the speech made on the second reading, ot the Finance Bill by the Leader of the Opposition. Mr. Coates s speech went to show why such a reduction was necessary and unavoidable, little as the Reform Party or anyone else relished facing the inevitable. In short no one wants to accept a cut in wages or other income but there is no choice. Even if there were an alternative, surely, as Mr. Coates suggested, the Public Service would not wish to be exempt from troubles in which everyone else had a share. The alternative to the cut would be increased taxation but it really is no alternative at all because taxation has already reached the limit and the law of diminishing returns is beginning to operate. That was plainly shown in the Prime Minister’s statement on the finances and the disappointing revenue yield. In any case, as Mr. Coates emphasised, no Government should consider in these times further complicating private budgets, in . order .to balance its own, since private budgets are already disclosing serious deficits and are in no state to bear fresh charges. ' Mr. Coates emphasised this point by reference to the condition of the primary industries and might also have, found telling texts in the industrial and business spheres. Indeed it is true that private budgets of every class are greatly in need of relief. If the Public Service is placed before the rest of the community, which it serves and on which it is dependent, and if its support is thereby seriously jeopardised, then in the end it will suffer far more than a 10 per cent. cut. Tax yields are dwindling rapidly and Civil Service wages cannot outrun revenue. To place so great a weight on the taxpayer as to cause his collapse would simply mean the collapse of the Civil Servants dependent on him. To this the Labour Party objects that if wages are reduced, so is purchasing power; and therefore the primary industry which is the basis of our economic system must accept lower prices. , This argument is as specious as it is unsound. First, we cannot live by taking in each other’s washing; and, second, the whole of New Zealand’s purchasing power would not be effective to determine prices which are fixed in the free markets overseas. As. Mr. Coates showed, we consume a very small proportion of our chief products and our aim must therefore be to reduce costs of production so that we can compete where we must sell. And taxes are a heavy item in costs.

Some who oppose the cut will concede these arguments but contend that the Civil Service has been singled out for the economy axe. How this contention can be maintained, except in ignorance of actual conditions, is hard to imagine. Many a farmer, many a business man, and many a wage-earner would gladly exchange his lot for that of a Civil Servant, even with the 10 per cent, cut, for he would have regularity of employment and no serious anxieties for the present or the future. Nevertheless the New Zealander always wishes to see the fair thing done and will endorse Mr. Coates’s plea that the most scrupulous care should be taken to see that the ent does not operate inequitably. From long experience New Zealand is suspicious of the efficiency and worth of tribunals, appeal boards, commissions and the like. In any case they always cost money. At the same time a tribunal such as Mr. Coates suggests, to examine into the incidence of the cut, will not be grudged if it makes for a “square deal.” No one wants to inflict hardship if it can be avoided although there is a great deal of unavoidable hardship already in existence. Apart from individual cases or classes of cases, the tribunal will be worth a great deal if it tends to remove the Civil Service from politics. What Mr. Coates says is true—it is a serious business to seek political favour from Civil Servants by bidding for votes. The. fact remains, of course, that any tribunal can only recommend and that Parliament will still control the purse even if a recommendation from such a tribunal would carry great weight. That brings us back to the starting point for, while Parliament controls the public purse, the people fill it. And if there is no more to be got from the people, if the limit of taxation has been reached and the purse can no longer be fully replenished, then those who draw from it must each take less. That simple but inexorable fact must be recognised, as it has been'by the Reform Opposition, although the right to criticise and improve on the Government’s proposals has been retained. It should also be remembered that once whittling is started on even the straightest and stoutest stick, it is soon made useless for its purpose.