PUBLIC ECONOMY

Evening Post, Volume CII, Issue 40, 16 August 1921, Page 7

PUBLIC ECONOMY

THE GOVERNMENT SERVICE ■ ~ '■ * " ' ~ ■ ■ ■■" TO MB iWIOR. , Sir,—l noticed in The Pott recently a report of a speech made by Mr. J. T. Martin at a meeting of the Chamber of Commerce, in which he advocated a drastic reduction of Government expenditure. I wish to traverse the arguments contained in this speech because, they, convey an impression which appears to be prevalent in commercial circles, but ■which has very,little foundation^ in fact. The portion of the speech which I wish particularly to comment on read* as follows: '"If Cabinet instructed a board of management, as was proposed, to reduce expenditure by 20 per cent., in twelve months it wonld mean on our depart- , mental expenditure of last year of sixteen millions sterling a saving of three . and one-fifth millions." Now I think that if'the items comprising this sixteen millions are examined it will be found that a' saving of anything like ,20 per cent, is quite impracticable. »■•■•-. ■ The figure quoted is evidently the total shown under the heading, of "Revenue , Account—Annual Appropriations" in'the Parliamentary Paper B7; To quote this as the total of Departmental'expenditure is somewhat misleading. To get.at the amount of expenditure which is actually under the control of' Departments, we ', must, in the first place, eliminate certain items, which, although appearing in the Departmental Appropriations, are placed there in pursuance of a decision by Cabinet or by Parliament.^ The largest of these items are as'follow:— : . ■".''. - .'...,'.■£ ■ Discount on sale of securities ..•.■•> 100,000 'Pensions to epidemic widows ... 80,000 Subsidy to flourmillers .'..'. , 500,000 Internal Affairs Vote—Grants, subsidies, etc ■..............' 400,000 k '.."".,.■; £1,080,000 Taking the Departments'; individually, it wiU be found that the working ; Railways and the Post arid-Telegraph' Departments between -them account for £8;905;057; 'or more thaarjhalf the total. Now, these Departments'are business institutions, and it is obvious that if the services ..they provide;" are,, to ".b.e^VJnamtained no large reduction' of ;;staffs is '; possible. A, scheme, of .wholesale retrenchment in these Departments inevitably-- entail a large curt^ilipgnt of the Facilities provided, iwith''.a" corresponding' kiss of i'evenue. Mr. Martin's Bpeech appears to convey 1, the impression. / that there has-been, a large falling 1 oft' in business in these .Departments, bub that is not .. the' case;".'. The"published figures for the quarter 30th: June . , show large increases in.'revenue-.in. both Departments, the:figures being:.' ''„. Juneqr...;. Juneqr., ■•■ - : V ■■- 1920."-/.i';,;i,'1«21. .■■■ „,,::.>.£■■:■■ ;.,,,;£ i Railways ... ... .'1,502,133. 1',658,68S ° Post and, Telegraph"■', 553,420 -Z 702,419 The increased'revenue' may' be" partly due to increased Charges, but at, any rate Qic .figures, show, that the work to ■ - be carried oh is at least equal in volume to that of last year. .'•.-..■■■ ;♦ ■ Coming now to the smaAer Departments, it will be found that by far the ** greater-part/.of !th'e. expenditure' is ; , for services of vital importance, and., m 0... reduction of these services •would...be toje-' . rated by public, opinion;. on., the < contrary, there is a persistent demand for increased iacilities. in some directions, notably in education. The principal services which may be classed as essential and non-reducible are as follows :-f ■ ■ ■ ■ : ■■■,-.'.■:£ ' ' -■' Justice Department. -(Courts,, •■■.:, Police, and ..■..V:.i" l;-';737:^87> Mental Hospitals, Public ■ Health, etc. ......1!.........'.'.". '509,045 Defence .639,252. Education „ : 2,557,827 Naval Defence :.....)...,........^.. -260,075 .^ Apart from those mentioned, above,. "~. there are hardly any Department whoso annual expenditure absorbs any conciderable proportion of the total. '■'■ I quite recognise the need for economy, • and have- no ..doubt' that savings^can; be ■and are being' made in some directions, as for instance in the purchase of stores, , tlio cutting out of unnecessary; subsidies', and perhaps the closing down of the special war-created Departments. I merely wish to point out that the charge of extravagant administration is unjustified, and that there is.need for caution and moderation in approaching the subject. I wish to say, in conclusion, that the expectations that-are being raised in some quarters ofr a. r big reduction ia taxation are futile. It must be apparent to everyone who considers the matter impartially that the present high rate of taxation is due almost entirely to the* . heavy burdens of war pensions and interest on war lqans, and that for this reasoiv a long period of high/ taxation must be , looked for.—l am, .etc., >. / ■ VERITY'S. 12th August.