FUNDS IN HAND

Dominion, Volume 25, Issue 275, 16 August 1932, Page 10

FUNDS IN HAND

Unemployment Relief NO EXCESS BALANCE Board’s Policy Explained REPLY TO LABOUR M.P» A denial that the Unemployment Fund balance at June 30 totalled £987,277 was given by the actingMinister of Employment, Hon. A. Hamilton, yesterday in replying to a statement by Mr. C. H. Chapman, M.P. The Minister said the balance was actually £453,165, and that it was necessary to hold a balance to meet future demands as the board’s revenue was not spread evenly over the year. At June 30, 1931, said Mr. Chapman in a criticism of the figures for the June quarter of this year, published in a recent Gazette, the balance in the fund was £69,115. By April 1 of this year the balance had increased to £184,966. Receipts for the first three months of the current financial year were £942,545, which, added to the balance at April 1, made a grand total of £1,127,511. Expenditure Compared. Expenditure during the June quarter of this year totalled £140,234, while for the June quarter of 1931, spending amounted to £251,280. “It will be remembered that during this period the wage tax was threepence in the pound, the shilling in the pound tax not coming into force until this year,” Mr. Chapman said. “It is rather remarkable that during this threepence-in-the-pound period the expenditure during the three months, April, May, June, was practically double what it has been during the April, May and June period of this year, with the wage tax increased to a shilling in the pound. There must be some explanation of this. According to the Gazette, the balance at June 30 last was £987,277, made up of cash £453,165, arid imprests outstanding £534,112. “The financial figures quoted from the Gazette are not so startling as they are stated to be,” said the Minister in a statement in reply. “The figures are merely a statement.of the receipts and payments of the unemployment fund in the periods shown, and as such do not tell the whole story. In attempting to draw from the figures any reasonably accurate conclusion as to the real position of the unemployment fund consideration must be given to the following important factors: — “(1) At the balance dates shown in the Gazette the Unemployment Board had a considerable amount of liabilities due for payment. “(2) The unemployment relief revenue does not come to the fund in regular instalments month by month. The greater portion of the unemployment relief taxation is paid by way of levy and tax on income in the four months, February, May, August, and November. The revenue received into the fund in the remaining months of the year is considerably less than In the four months mentioned, and expenditure in respect to relief of unemployed must ba made regularly week by week. Lean Revenue Months. “It would surely not he suggested that the board should expend its revenue immediately it is received, and be faced in the lean revenue months with the necessity of curtailing relief to keep the expenditure within the diminished revenue received in those months. This Is certainly not the policy of the board, nor would one Imagine the desire of the relief workers.” Against the cash balance of £184,941 at March 31 last had to be set about £120,000, representing liability previously incurreed on account of relief workers. There thus remained £64,000, which, with the comparatively small amount of tax receivable in April, was required to finance unemployment relief during the month. Difference of £500,000. The Gazette showed that at June 30 cash totalled £453,165 and imprests outstanding, £534,112. But it was wrong to assume that the imprests outstanding represented cash in hand. The sum actually represented expenditure that had been > financed from the fund for various relief schemes, but pending final dissection and examination of the vouchers it was shown temporarily as imprests outstanding. As expenditure it should therefore be added to the sum of £140,234 shown in the Gazette as payments from the fund during the quarter, and thus there was a total payment of £674,346 from the fund in the quarter ended June 30, 1932. The actual cash balance in the fund was £453,165. This included the bulk of revenue receivable up to July 31, and a considerable amount of tax payable after that date, for in May, 1932, many paid in advance sums due by them later. It would not be sound policy to spend this revenue immediately on receipt. Also, there was chargeable against the June 30 cash balance a sum of at least £lOO,OOO in respect of liabilities due and paid. The public could rest assured that only enough cash was being held as was consisted with prudence and safety.