INTERNAL LOANS

Evening Post, Issue 99, 24 October 1934, Page 10

INTERNAL LOANS

FOR PUBLIC WORKS

RELIEVING UNEMPLOYMENT

EMPLOYERS' PROPOSAL

The unemployment problem is dealt with at somo length in the annual report of tho New Zealand Employers' Federation. It is suggested that the time has arrived when the Government might embark upon a reasonable programme of public works of permanent value, such works to bo financed by internal loans. "The Unemployment Board is now spending a very large sum of money and unemployment taxation is heavy," states the report. "The board has been criticised from time to timo by peoplo who think things should be done differently. The board, however, has a very difficult task, and the devoted service of its members is worthy only of the highest praise. Public opinion would not allow the use of tho unemployed to produce anything for sale in competition with regular producers paying standard wages, and public opinion also objects to the unemployed being used to do any works regarded as necessary. Tho only work, therefore, left to be done by the unemployed is work which would probably remain undone were it not for the unemployed difficulty. In other words, they are employed on unnecessary work. The Unemployment Board can ouly adopt palliative measures: it cannot start permanent industries. Tho best we can hopo for is that conditions will arise which will enablo the unemployed to be reabsorbed in industry. When this happens tho Unemployment Board will be no longer required. REABSORBING UNEMPLOYED. "This brings up tho question of reabsorbing tho unemployed in industry. We will probably get out of the unemployment problem in the same way as we got into it. Lot us look, therefore, for a moment how we got into it. "Tho slump commenced with an unprecedented world-wide fall in the price level of commodities. This gave all industries a shock and threw many of them completely out of gear. Consider this effect on our own industries iv this country. Our largest industry is tho farming industry. Tho immediate effect of the low prices was to make farmers endeavour to produce more off their farms in order to make tho increased production compensate for the low prices. The employment connected with production on farms was not, therefore, reduced. In fact, in certain directions it was increased. Employment in connection with putting farm produce into a marketable couditiou, such as work in dairy factories, freezing works, fnllniongering, etc., was also increased. The reduction in employment on farms was confined to a falling off in maintenance and almost a stoppage in the development work, such as bringing iv new country. Provision is made by an extension of nino mouths from March 31, 1935, of tho time within which conversion schemes may be authorised. "The second largest industry iv this country is probably tho building industry. Tho immediate effect of the slump was to stop building. The effect of this stoppage of employment was very serious, as it was so far reaching. It meant the stoppage of sawmills, lime nnd stone quarries, cement works, transportation,' foundries, etc. The actual work of erecting a building is only the finishing touches on work which 'commences in the forests, mines, and foundries, and is then transported to mills and the site of the building. "Probably the third largest industry in the country is public works, not only Government but also local bodies. The slump caused a large stoppage in work of this nature. " Public works, again like tho building industry, have far-reaching repercussions which affect other industries. The throwing of so many out of employment in the building and public works industries and the consequent loss of purchasing power by those thrown out of employment had repercussions on practically all industries and trades by reducing the demand for their services. PUBLIC WORKS PROGRAMME. We suggest that the time has arrived when the Government might embark upon a reasonable programme of public works of • permanent value to tho development of the country, such work to be financed by internal loans. Ono lesson which New Zealand in common with other countries' must havo learned from tho depression is tho wisdom of avoiding borrowing overseas. There is now, however, money available within the country at low interest rates, and we think the Government could assist the unemployment situation in this way and in so doing would bring only benefit to tho country. "The gradual restoration of building and public works industries and further development of our lands will slowly set the streams of industry going again. When this is done the unemployment problem will be solved so far as that section of tlie unemployed which actually wants to work is concerned. "There is amongst the unemployed, and they are often tho noisy section, a residue of unemployables—people who do not want to work. We have always had these with vs —every country has them—and will probably always have them. When, however, we get back to work 'all those who are genuinely desirous of employment, it is a simple matter to deal with the residue who want to live by their wits instead of honest work."