RISING COST

Evening Post, Volume CXXIII, Issue 29, 4 February 1937, Page 4

RISING COST

ADMINISTRATION OF UNEMPLOYMENT

PROMISED REDUCTION

Contrary to the Ministerial undertaking -that there. would be a reduction in the cost of unemployment administration, there will be an appreciable increase in the cost, according to the Government's own estimates of expenditure for the current financial year, says a statement by the Associated Chambers-of Commerce of Nsw Zealand.

The Minister of Labour, when speaking to the second reading of the Employment Promotion Bill in the House last session, said "he had always contended that the Unemployment Board, as a separate organisation to deal with unemployment, was quite unnecessary because there was in existence a Department of Labour well equipped with machinery to deal with the whole situation. He had always contended that had there been given to that Department the powers which were given to the Unemployment Board the job would have'been done just as economically and just as efficiently as it had been carried out under the board " "DONE MORE ECONOMICALLY." In another part of his. speech the Minister said:. "We believe that by bringing the unemployment relief administration- under the direct control of the Minister 'of Labour, and by amalgamating the functions of the Department of Labour and the Unem-. ployment Department under one head and as one united body, the work can be done much more economically: and better than it has been done in the past. .\ .. . Another change will be that the Unemployment Fund will be collected by the Commissioner of Taxes, who has the machinery to do the .job more efficiently than it has been done by the board, a .body which has really been duplicating the work of the Commissioner of Taxes." Prior to. the introduction of the Bill, the-Minister stated in Ctiristchurch last February that "when the Government had made its financial arrangements the Unemployment Fund would be relieved of a good deal of the present expenditure. There would be co'nsid-; er'abls relief by the provision. of pensions for persons physically unfit for work,. and the .Public Works Depart-, ment would pay. for work which was rightly a charge upon it." : At the end of the financial year 1935-36 there were,, 864 persons employed in unemployment, administration under, the ■Unemployment Fund vote. The cost of administration ,for that year was £200,844. These, were the figures' that the Minister meant were to be so much improved upon. Unfortunately,' examination of the Government's own estimates of costs for the. current . financial year does not -show that administrative expenses are going to be reduced in the direction indicated-by the Minister. ;■ '■ LARGER THAN BEFORE. The current estimates wipe out : (in an accountancy sense) the' 864 persons employed under the old Unemployment vote. On the other hand;;the estimates make provision for an i additional 868 -.- employees ; -under': ithe newly-created Labour Department sub-: division "employment promotion," and an additional,2l employees under; thfr newly-created Land and Income Department sub-division- "employment taxation" —a total net''increase of 25 persons over the Unemployment Board' staff."' Actually,. the .increase in the total- staffs of the Labour Department and the Land and. Income Tax!. Department" is greater- by another ajdd-i*, tional 60' persons—listed- however, as being for other than unemployment administration purposes. These extraordinary staff additions cannot be reconciled ■ with the statements of the Minister that prior tb.-the change the Labour Department was already "well equipped with machinery to deal with the whole situation," that the Unemployment Board had "really been duplicating the work of the Commissioner of Taxes," and that, by amalgamation into one body, the work "could be done much more efficiently and economically" than it had been done in the past." Whether unemployment administration today is more efficient is not necessarily brought into question here, but greater efficiency at greater cost —estimated at a net £262,000 this financial year as . compared • with £200,844 spent'last year—is not what was promised. The fact that the Unemployment Fund has provided £60,0,00 towards this year's expenses • from its own resources does not alter the figures as regards the cost of administration. Furthermore, the Unemployment Fund should now be considerably relieved, since Parliament, in accordance .with the forecast by the : Minister, introduced . invalid pensions (chargeable on the Consolidated Fund) for persons, permanently incapacitated for employment, while the Public Works Department has how absorbed 18.878 men as compared with -11,715 in February of last year.1 ■ ■•. . ' . ;- ■; : INCREASED IMPOSTS. The movement in these administration expenses is of some concern to the taxpayers. Firstly, unemployment taxation this year is: expected to yield £4,210,000—an increase of £290.000 over last financial year's revenue. Then, a change which was made under the latesti Budget, and which is not generally realised by taxpayers, is that whereas unemployment administration expenses have been deducted in the past from the taxation income of the Unemployment Fund, now the Fund is left intact, and the cost of administration is drawn from the taxpayers through the Consolidated Fund as an. additional impost. This sum. totalling a net £202.000, amounts to increased taxation for unemployment (or employment promotion) purposes. Taxpayers will be more generally aware that, for income tax purposes, no exemption is now allowed for unemployment taxes paid. This is not merely double taxation, it is taxation on income never actually received. The extra revenue yield resulting, while not swelling the funds directly earmarked for unemployment purposes, but rather swelling the yield from income tax, nevertheless makes unemployment taxes press harder proportionately on the resources of the taxpayer. ■■'' ■ Therefore the taxpayers, burdened with their extra impositions, will want to know with added reason why unemployment administration expenses, instead of being substantially reduced, have been substantially increased—by 30 per cent.,' in fact; which is a backhanded economy. \