UILDING INDUSTRY

Evening Post, Issue 122, 26 May 1933, Page 9

UILDING INDUSTRY

THE KEYNES PLAN

ARCHITECT'S COMMENTS

POSITION IN NEW ZEALAND

The problem of stimulating the.building iudustry is the subject of a statement by Mr. F. E. Greenish, chairman of the Wellington District branch of the New Zealand Institute of Architects, who makes several suggestions for the- encouragement of building activities. "The suggestion has frequently been made that procedure with building operations in these days of financial stringency is unwise," states Mr. Greenish. "As the subject may be of interest to the general community, it may b,e of service to quote some figures which are being used to counteract similar tendencies in the Mother Country.: "The 'Architects' Journal' (London), in.a leading nrticle on this question, quotes Mr. Neville Chamberlain as saying that it would bo 'grotesquely' foolish, "to- believe that any improvement in employment' can bo secured by a resumption of public works. 'Tho Times' supported this contention, asserting that it 'costs about £500 ,to '.give' oho man work for one year in this way,', and that 'expenditure on such a scale and giving so small a return must add to liabilities incomparably more, than it adds to assets.' '"'Opposing these contentions, the 'Architects' Journal' points out that on an average if £100 is spent in building in one week £40 is paid in wages for direct labour for 15 men (at British rates) for the week, £50 is spent in materials, and £10 is overhead and profit.. But £50. worth'of material.requires the employment of another 15 men for one week, who received £40 of tho £50 in wages. So 30 men are employed in building and.receive £S0 in wages. This £80 haa to be paid out for necessities of life, in the production and distribution of which labour 33 represented to tho extent of 40 per cent, of the wages. The greater part of £80 is spent,, and 40 per cent.,, or £32, goes out in wages; 40 per cent, of that £32, or £13, again goes out in wages, and these amounts together provide for a further 15 men for one, week. Thus £100 spent in building ensurestho employment of' 45 men for one >voek. "If the 43 men are unemployed they ■burden the unemployment fund for maintenance at 25s per week, or £56 ss; they would contribute if .employed, with their employers, £3 15s per week. Unemployment "funds arc thus £60 better off by £100 spent in building —and the country has a tangiblo asset as. rigainst supporting men in idleness. "The article concludes with the statement that the contention of 'The Times' is diametrically opposed .to the truth— this without taking into accouri^ increased yield of taxation and national income. In a later article, it quotes Mr. J. M. Keynes's . estimate that£3o,ooo,ooo spent on housing would increase tho national income by £60,000,000, and that 20 per cent, of that (£12,000,000), would be the increased yield from taxation.' This article concludes, 'in three words, Troperity through reconstruction.' Dominion conditions. "In the Dominion our conditions differ somewhat; we arc taxed for unemployment relief, but the fund is spent in giving work- —men are not kept idle. Few persons will suggest that the whole of the money so obtained from the 'Community is expended?, in works that'will prove to be assets to the country; nor that the amount received by individual unemployed men is anything more than a sustenance rate to avoid more acute distress. "Applying the figures quoted above to average New Zealand conditions, if £100 is spent in building in one week, about £40. is paid out in direct wages, and about £30 in wages for production of material and its distribution (in /some cases theso figures may lie exceeded). At, present rates (2s per hour) £70 will support about 16 men for one 44-hour week; 40 per cent. of their wages (£2B) goes'out in wages for about seven men concerned in providing the. necessities of life; and a further 40 per cent, of that provides wages.for a further two men. That.is, a total of 25 men receive £110-as wages in one weekdue to £100 spent in building. At Is in the pound they contribute £5 10s in wage tax. . ' .■ "If these 25 men were unemployed they would receive on the average parttime' employment at, let us assume, an average rate of 25s per week each, or £31 ss. But they would not contribute'wage tax. So the total gain to the unemployment funds would be £36 25s if these men had employment. GAIN TO COMMUNITY. > . "The gain to the community would "he greater than this, but actually £30 15s would be the direct cash saving; the benefit to the country due to a greater circulation of wages, ability to pay taxation, to pay for imports .needed are other material gains in addition to the creation of a tangible asset; but still greater would be the factor of uplifting the morale and restoring confidence throughout. '■■■-. "It is frequently suggested that we in iNew Zealand have over-built. ,It is quite true that houses to let. are moro easily obtainable, and that in the cities office accommodation is in adequate supply. But as far as houses arj concerned,"were it not that many families are sharing houses, and that others sire crowding into inadequate rooms, we should have probably an acute house shortage. Prom the permit figures it appears that the average annual nnm; ber of houses built in the ten-year period 1921-31 was 5653, and this dropped, to 1550 by 1932,' find probably to little over 1000 by this year. The average was rather higher than normal, but there was a (demand owing to wartime shortage and immigration, which was only just met in 1930. In any case the population of New Zealand has a normal increase—without immigration— <if 15,000. The average-density of persons per house;, from the Census returns for twenty years; 1906-26, was about 4.73 persons, so- that we need about 3200 houses annually for, that increase alone. . SHORTAGE OF HOUSES. "On.those figures alone there is actually a shortage for the two years ending March 31, 1932 and 1033, of at least 3800 houses. If we allow this to continue, when our economic difficulties become less acute and houses will be in greater demand, there will be a repetition of the house shortage following the war—increased demand, increased cost, poorer ■ workmanship, heavy mortgage liabilities, heavy rent, costly land. Let us beware of entering into such another time of folly! "Can wo plan ahead for meeting this condition of affairs? Can wo look on tho question of housing less as the province of the speculator and more as the community's most vital need? If wo can do so. we can- surely do something to further those.objects and more profitably employ those thousands ■of 1 men in the building trade who are now out of employment, partly employed, :or working on unremurferative relief works for a mere sustenance wage.! If we can employ those men we can do .something to cause a greater circulation of money in all directions; but more, still more, it will put greater heart into the whole community a.nd bring more confidence in the future."