CAPITALISING RELIEF FUNDS

Evening Post, Volume CXV, Issue 81, 6 April 1933, Page 10

CAPITALISING RELIEF FUNDS

For years now people have been talking about capitalising relief revenues, so that the capital value thereof shall be immediately available in order to fight unemployment. Assuming that the depression lasts not too long, and that the relief revenue is available and offers, sufficient security to attract the lender, then there is much to be said for capitalising. Its advocates see the advantage, of supplying more continuous work at a higher wage—a wage high enough to command industry on the part of the worker. Its opponents —those who have lost faith in public relief works, root, and branch—will see in the greater sum of loan money, as compared with the present lesser sum of revenue, only an intensified opportunity for the display of selfishness and incompetence by those local bodies whose highest ambition is to cut street grass in the suburb where, the unemployed reside. Seeing that the capitalisation plan assumes a suppression of parochialism and waste, its advocates - may be encouraged to persevere with their idea. As long as they talked in a merely general way about it, they advanced but little. But now Mr. D. J. McGowan and Mr. F. J. Jones have presented schemes, and the latter's is a very definite scheme of work and finance, figured fore and aft. He provides something concrete for critics to knock down, and thus he places the discussion of capitalisation on a new plane of practicability and perhaps of usefulness.

His plan assumes that the' unem-~ ployment funds are available for borrowing upon, " and that the money, £2,500,000, can be borrowed in the New Zealand market; that it can be .borrowed at not more than 4 per cent.; and that the sinking fund paid out of the unemployed funds shall be high enough to repay the loan in ten years. He anticipates such a decline in unemployment, from year to year, as will enable the unemployment taxation to carry the loan service, to carry the dwindling unemployed,' and yet to be reduced to 8d in the £ by 1936, to 6d in 1937, 4d in 1938, 2d in 1940, and Id for the final year of his decade, 1943. The unemployed worker's share would be a five-day week at considerably increased wages. A five-day week, it is considered, would give reasonable continuity, and would modify the intermittency that attaches to present methods. Probably some people will criticise the proposal as tending to make relief work permanent to the detriment of private employers; and it is equally probable that from the labour side objection will be taken to the proposal as stabilising fulltime work at too low a w^ge. -If so, these criticisms will tend to counter each other. Partisan of whatever shade, are always liable to be more vocal than the middle body of tolerant opinion. ».■.- Our own opinion is that the contributions of Messrs. McGowan and Jones are well worth discussing. They give definiteness to a discussion .that previously was vague, and should lead to a real testing of capitalisation possibilities.