SUBSIDISED LABOUR

Evening Post, Volume CX, Issue 117, 14 November 1930, Page 8

SUBSIDISED LABOUR

Authority is given to the Unemployment Board, among other things, to make grants or loans to any persons or authorities to enable them •to undertake developmental works calculated to relieve unemployment. This embodies the principle already put into operation by the Govern|ment in subsidising relief works loans raised by local authorities or funds subscribed by the public. It would appear also to authorise action on the lines suggested at the annual meeting of the Otago Employers' Association that farmers should be subsidised to enable them to retain in their service men who had been taken on only for seasonal jobs, and keep them employed for an extended period on such work as hedging, ditching, and fencing that was often neglected because farmers were compelled to economise. Great caution, however, would require to be exercised if the authority were used in this way. There is no great danger in subsidising a local authority, if all local authorities are entitled to claim similar help. But if private business of any class is aided from public funds, the circumstances are vastly different. The door is immediately thrown open to claims from other businesses for similar help. If the farmer has a grant the builder, may ask: "Why should I not have the same, so that I may keep building tradesmen employed?" or the transporter may say: "With a grant from the public funds I could carry the farmer's produce at a lower rate and extend my business to employ more labour." The manufacturer might make a similar claim. The issue involved is not only one of employing labour, but of subsidising industry. There is a precedent for this in the provision of bounties on the production of certain goods (including export subsidies and guarantees), and indirectly in the tariff protection of certain industries. But the precedent is one which should be followed with the greatest reluctance and extended only where there is definite public benefit. In the development of waste land to bring it to the settlement stage, the principle may be applied where that land is owned by the State or is taken up by private individuals on a promise of assistance in developing it. There is a difference, however, in applying the principle to the improvement of land already in private ownership. The benefit of such improvement is reaped by the private owner, who profits from wage-funds subscribed by other employers and individuals. Unlimited subsidising of private business cannot be contemplated, and if a start is once made, where is the limit to be set?,