The Evening Star WEDNESDAY, JUNE 15, 1927. UNEMPLOYMENT RELIEF WAGES.

Evening Star, Issue 19583, 15 June 1927, Page 6

The Evening Star WEDNESDAY, JUNE 15, 1927. UNEMPLOYMENT RELIEF WAGES.

Yesterday the Minister of Labor outlined to a Wellington deputation the limits to which the Government will help in providing relief work for the unemployed. Already the Public Works Department is employing several thousand more men than its programme contemplated, and the placing of yet more thousands of hands in that way is evidently impracticable. The idea now is to encourage local bodies to put additional works in-hand. Local bodies as a whole may be in no stronger position financially than the Public Works Department to undertake special expenditure, but obstacles to their borrowing for that purpose are being removed, and the inducement of a £1 for £1 subsidy on wages paid on relief works is held out. The scheme has its advantages, not least of all to the Government itself Unemployment is widespread, and if local bodies take up the scheme and are able to raise the money work will be provided in the various places where the unemployed are congregated, and there should be less delay and expense in affording relief. Local bodies may entertain their own private opinion of this delegation of responsibility from general to local government, but as a set-off there is the Treasury’s contribution to the cost of works which will in no way be reproductive to any department of the Government. The question now resolves itself into the willingness of local bodies to accept the responsibility and their ability to find funds quickly at a time when money is admittedly tight and dear.

From the wage-earner’s point of view the Government’s offer has a catch in it. The subsidy is to be on the basis of a 12s per day wage for married men and 9s for single men. This is regarded as a deliberate attempt by the Government to depress the rate of wages. In our opinion it is a case of Hobson’s choice for this or any other Government except one so reckless as to court disaster. From what can be gathered the Government is already straining its finances in making its present offer. Only through the fortuitous circumstance of Customs receipts swollen by collection on the higher scale of the preferential tariff did the public accounts show a surplus last financial year. Over-importation is blamed as one of the chief causes of the present unemployment, and it is being curbed, as the figures for the first five months of 1927 show a fall of nearly two and a-half millions compared with the corresponding period of 1926. The probabilities are that in the current financial year the Treasury must be content Mth considerably reduced Customs revenue- -either that, or one of the causes of unemployment must remain. Another contributing cause to unemployment is said to be the uneconomic wage scale prescribed by the Arbitration Court, since it restricts primary production because the farmer cannot place bis goods on the world’s markets at competitive prices. If the Government wore to prescribe Arbitration Court wages for labor which on the average will probably be less efficient than that in normal employment, it would lay itself open to the charge of fortifying one of the causes of the trouble it is seeking to alleviate. There can be no question that tho subsidy on unemployment relief work will have to come out of taxation. The Minister of Finance has just intimated to tho Auckland Chamber of Commerce (which had urged on him the reduction of taxation) tho possibility of an increase of taxation. The effect of high taxation on trade and business activity is known to bo depressing. Tho last step any sane Government would wish to take would be one which would accentuate the existing depression and tend to make chronic what people designate- to-day as an exceptional degree of unemployment. If the Minister of Finance finds it imperative that taxation must be increased so as to make ends meet, it will be his task to impress on his colleagues that the whole policy of the Government must be directed towards fertilising the field from which taxation is reaped. In the case of a country like New Zealand the main fund out of which taxpayers meet the demands made on them has its origin in a favorable trade balance, the excess of exports over imports. If there are ascertained factors operating in a contrary direction—towards an adverse balance —they will need to bo discouraged rather than encouraged. It is an extremely unpleasant task to uphold the Government in the stand it takes on the wages scale for relief works. What those who protest against it must recognise is that these will be relief works, possibly superfluous from many aspects, and probably a worse bargain for those who will have to pay for their execution than for those who will be paid under-rate wages for carrying them out.