FOR THE UNEMPLOYED

Evening Post, Volume CXIX, Issue 128, 1 June 1935, Page 10

FOR THE UNEMPLOYED

FINANCES OF BOARD

RISE IN WAGES BILL

INCREASE IN REVENUE

A comprehensive survey of the , finances of the Unemployment Board was released for publication today by the Minister of Employment (the Hon. S. G. Smith). It is shown that for the year ended March 31, 1935, £5,245,078 was available for expenditure. The cash balance carried forward from 1933-34 was £621,518. The surplus not committed at March 31, 1935, is shown as £287,440. The board's rate of expenditure is £82,000 a week. In the course of the statement the Minister calculates that a rise of £3,600,000 has taken place during the year in the wages bill of the Dominion. Levy payments were reduced by £18,000, owing to concessions being granted to relief workers. In the returns from taxation on incomes other than salary or wages an increase is shown of £200,000 over the previous year's figures. The rise in this class of income which was necessary to offset the reduction in tax and yet produce £200,000 more in taxation is calculated by the Minister to have been £6,388,000—an increase of 28| per cent. In conclusion, the Minister states that progress is definitely being made towards a better state of affairs for the unemployed, without, he hoped,. imposing any heavier burden on taxpayers. After he has examined the problem thoroughly, he hopes to make a definite statement regarding new proposals, which, in consultation with other members of the board, he has had under consideration. •"A matter of particular interest to. the public which was dealt with at the last meeting of the Unemployment Board was a report on the board's finances as at the end of. the financial year, 1934-35," said the Minister. "The annual statement to the board from its accountants is one to which the board always gives lengthy consideration, as upon it depends very largely the margin of reserve to which the board may look for funds with which to finance new policies in unemployment relief for the ensuing twelve months, and, what is still of urgent importance this winter, measures for providing some additional comforts for the unemployed during the cold season. "The considerations mentioned are of direct importance to those whose normal avenues of employment have hot yet reopened after the depression, but. the board's annual review of its revenue receipts are of interest also to the public generally on account of the clear reflections which it gives of recent trends in the economic position of taxpaying citizens throughout the Dominion. These reflections are this year, as pleasing as they are clear. USEFUL INDICATOR. "I regard the revenue from salary and wages tax as a particularly direct and useful indicator of the current income position of the average citizen," said the Minister, "for the reason that this tax is paid as and when salary and wages are received by the taxpayer. For this reason it gives, in my opinion, aft even more close-up view of the situation than do either Customs or income tax returns, especially as income tax is not payable by thousands of small wage and salary earners. "Probably more often than otherwise, the Minister of Employment is concerned with unwelcome news, and I accordingly take special pleasure in being able, on this occasion, to announce that, from the returns of salary and wages tax for the past financial year, it is calculated by the board that a rise of £3,600,000 has taken place during the year in the wages bill of the Dominion. This deduction remains true in spite of the apparently contradictory fact that the board's revenue from that particular tax fell in the same twelve months by £72,000 compared with the previous year. This reduction in tax and the estimated increase in earnings are, of course, easily reconciled when it is recalled that during last year the rate of tax was lowered from Is to lOd in the £, and that from November 12 last, persons under 21 years of age were wholly exempted from it. The amount received into the Unemployment Fund from this tax was £2,794,000. "Revenue from levy payments amounted, to £414,000, which was £18,000 less than last year, the reduction being due to the fact that relief workers were granted last year the concession of paying levies of only Is instead of 5s per quarter. The tax, being "on a flat-rate basis, the returns from it do not offer the same interest as an indicator of economic conditions as do those from the salary and wages tax, although it provides a very substantial portion of the board's revenue. OTHEE RETURNS. "From the point of view of revenue into the Unemployment Fund, the most marked improvement is shown under the heading of returns from taxation on incomes other than salary or wages, •which, after allowing for an item of £38,000, representing some revenue received in advance, amounted to £1,314,700, an increase of £200,000 over the previous year's figures. The rate of this tax was also reduced in 1934 from Is to lOd in the £, so that the rise in this class of incomes which was necessary to offset the reduction in tax and yet produce £200,000 more in taxation, clearly must have been substantial The board calculates it to be £6,388,000, or an increase of 28J per cent.; but satisfactory as this result is, it cannot be viewed, as a recent indication, of the state of affairs with the taxpaying community, with quite the same optimism as is warranted by the salary and wages tax figures mentioned §It has to be remembered with tion that the tax on income an salary or wages is derived omes earned in the year before is levied on it—in this case 1933-34—and it has to be borne ■* in mind particularly that in that year there was a sharp^rise in wool values which has not, unfortunately, been fully maintained since. "It is proper to mention, too, that the closer inspection now maintained by the board of payments due under the headings both of salary and wages tax and tax on 'other income,' has contributed in good measure to the improved returns into its funds. In this connection I might mention that it is found by the board's inspectors that omissions to pay these taxes lie broadly with two classes of persons—those whose omissions are due to honest ignorance of their obligations under the Unemployment Act, and those who know but are prepared to risk prose-

cution if discovered. The board's inspectors are, in the course of their duties, making the former class better '. acqainted with their obligations, and i are bringing increased numbers of ; the latter type to the notice of Magis- i trates for enlightenment. : QUARTERLY RETURNS. ! "I should like on this occasion," continued the Minister, "to forestall what ; have come to be almost regular mis- ] understandings—not always accidental j with some critics of the board, I am , afraid —about the surplus in the Un- ] employment Fund, as published quar- , terly in the New Zealand Gazette. , These gazetted returns are published ] by Treasury as a matter of depart- i mental routine, and deal only with the ; purely cash position at the date con- 1 cerned, taking no account of forward ] commitments, accounts due but not , paid, revenue received in advance, the cost of measures which the board has uncer contemplation, but has not yet made commitments for, nor the need for maintaining a certain reserve against sudden demands on the fund as a result of unexpected rise* in unemployment registrations. It is obvious that if the board conducted its I affairs so that at the last day of each ' quarter its outgoings precisely bal- s anced its income, relief workers and : the board's various creditors for goods and services would have to face a very lean period until the next quarter's revenue began to accumulate again, and that no funds would ever be available for developing avenues of full- ] time work at standard rates of pay. ] "The following table sets out the ■ year's finances in the simplest pos- ] sible form, which should leave no ( voom for misunderstanding:— ' £ Cash balance carried forward from 1033-34 G21.51S Add receipts from all sources during 1934-35 4,023,DG0 Total amount available during 1934-35 5,245,078 Deduct amounts paid out during 1934-35 3,912,909 £1,332,1G9 Deduct 1935-36 revenue received in advance 35.225 £1,293,944 Deduct accounts due but not yet paid at March 31, 1035 3GG.GS3 £927,201 •Deduct commitments made on or before March 31, 1935, but which do not fall due until after that date 639.521 Burplus not committed at March 31, 1935 £287,440 j *In the ordinary course, it is to bo expected, • of course, that portion at least of this item \an be met from the next year's revenue. "Final figures naturally cannot be ascertained," the Minister went on, "until 1 the whole of the outstanding accounts \ for 1934-35 expenditure are received ' and passed for payment, but I am advised that the estimated surplus will not be materially altered. The net increase in taxation revenue for the year, compared with the year 1933-34, was £109,?86. RELIEF MEASURES. "Having due regard to the fact that ( rationed unemployment relief allocations and sustenance payments are in ' fact merely relief, and do not pretend 1 to fill adequately the gap left when a : worker loses the wage obtainable from ; his ordinary employment, the board Views with satisfaction the improvements which it has been able to effect j during the financial year under review. Eelief payments are higher now 4 than they have been at any stage before, excepting a few months shortly after the relief system started; relaxations in rules (involving in practically all cases increased cost) have been. made in various directions with a view to infusing a more sympathetic spirit into the administrative organisation; children between the ages of sixteen and twenty are now classed as de- \ pendants when they are wholly de- : pendent and their fathers are in receipt ' of relief; the system of granting sup- j plementary rations has been extended * from the four main centres to serve un- J employed in all the larger secondary £ towns; a more liberal scale of private c earnings which an unemployed man 1 may receive before affecting his relief J allocation has been adopted; a further ' issue of working boots has been ar- ' ranged; and married men are to re- £ ceive, as supplies come to hand, a i pair of good double blankets. All of ' these measures, and numerous others which have been put into effect in the < ordinary course of administration, have £ conferred direct and substantial bene- i fits on those who are regrettably com- £ pelled to rely on the Unemployment £ Fund for assistance; but they have been costly, and certainly could not i have been even remotely possible had < the board succumbed to the pressure i of those whose urgings would have led < it to abandon all financial prudence in « administration and live - only for the i day. s OPTIMISTIC OUTLOOK. j "Progress is definitely being made," ( concluded Mr. Smith, "towards a better ( state of affairs for the unemployed, without, I hope, imposing any heavier burden on those other citizens who are providing the board with its funds. There has not elapsed since I took over the Ministry of Employment, suf- | ficient time for me to see personally all the difficulties and the resources of the various districts throughout the Dominion, but as soon as I have been able to do this I shall hope to have some definite statement to make re- j garding new proposals which, in con- j sultation with my fellow-members of j the Unemployment Board, I have under consideration." (