UNEMPLOYMENT FINANCE

Manawatu Standard, Volume LI, Issue 181, 3 July 1931, Page 2

UNEMPLOYMENT FINANCE

GOVERNMENT'S NEW PROPOSALS

SPECIAL CHARGE ON WAGES AND INCOMES

The Government's proposals for the provision of additional income for the relief of unemployment were brought down in the House of Representatives yesterday, the Hill being read a first time. The main features are : (1) A flat rate levy of £1 per year on all male workers over 2U years of age (instead of the present levy of £1 10s). (2) A special emergency charge on all salaries, wages and other incomes to the extent of one penny for every Gs 8d earned, or 3d in the AT per year, to be levied on all earners, irrespective of sex. The Unemployment Boflrd is to be reconstituted.

PROVISIONS OF THE BILL. FINANCE FOR RELIEF WORK. Per Press Association. WELLINGTON, July 2. The debate on the Address-in-Reply was interrupted in the House of Representatives this afternoon by the introduction of the Unemployment Amendment Bill by Governor-General's message and both the Prime Minister and the Minister of Labour were immediately inundated by questions. Hon. S. G. Smith, explaining the measure, said that lie thought it was generally agreed that a stage had been reached when more money was required for unemploymnt. The Bill reduced the flat rate contributions from 30s to 20s for every male over twenty years of age. The reason for retaining the part of the levy was to ensure maintaining the contact that had been established by means of registration. It had been found that the approximate revenue of the hoard had been £24.000 per week, but under the No. 5 scheme the expenditure had been £40,000 per week. It was now proposed in addition to tho flat rate of £1 per year to impose a special emergency charge on all salaries, wages and incomes of a penny in every Gs Sd, irrespective of sex, from August 1 next to the end of July, 1932.

LABOUR LEADER’S QUESTIONS. The Leader of the Labour Party, A[r H. E. Holland : Does the Government propose to make this a party measure or will it accept amendments ? Air Smith: I'm not the Leader of the House. Air Holland asked whether it was proposed under the new measure to provide work for everyone. Would provision be made for the payment of unemployed single women at a rate that would enable them to live? Would it still be considered sufficient to find work for .single men that resulted in their earning no more than 13s 6d a week? Air Holland added that he would like to know what were the reasons for depriving the workers of the right to elect representatives on the board. It would have been better if the measure had provided for the direct selection of reprsentatives on the hoard. It would have been better if the measure had provided for the direct selection of representatives of the workers and employers. At the present time the bodies concerned could only recommend the appointment of representatives. ESTLMATE OF REVENUE. The Prime Alinister after outlining the position at June 20 last, when the board was in the position of having no more money to continue with the schemes, said it could not be expected that it would be possible to find full work for everybody. ]f the board attempted to do this there would inevitably be a breakdown. The Bill represented a determined effort to provide a measure of relief in all cases to the fullest extent possible. He said that the estimated revenue for next year would be as follows: —

Mr W. E Parry: Relief workers and all? Air Smith: Everyone. Mr Barnard: With no exemptions whatever ?

Mr Smith: The only exemptions will be domestic servants in private homes. Mr Parry: I think it is absolutely ridiculous.

Outstanding amounts owing on the . June-Jilly levy ... 3G.000 •Stamps on wages and salaries 480,000 Special tax of 3d in the £1 on other income 292.000 Flat rate levy 285,000 Subsidy from the Consolidated Fund 1.092,000 Total 2,185,000 Allowing for the expenditure incurred in June this year, amounting to £25,000. there would he available a sum of £55,000 per week during the period from August until July next year. The Bill was designed to operate only until Parliament assembled next year and it was possible to review the situation. NOT A PARTY AIEA.SURE. Air H. E Holland : AYill the Prime Alinister say whether he intends to mako it a party measure? Air Forbes said that he had received so many assurances from different members in the House that they were anxious to assist in the matter of relieving unemployment that he did not intend to make it a party measure. The question was so serious that the Government could not let it go by without making provision for financing the operations of the board. AL- Holland: Will you accept any amendment which the majority of the House favours?

Continuing, the Minister said that the estimated annual revenue of the Unemployment Board to-day amounted to £1,200.000. The proposed special charges would, it was estimated, approximately double the present income of the board. BOARD TO BE RECONSTRUCTED. Another important feature of the Bill was the proposal to reconstruct the Unemployment Board which would I then consist of a chairman (the Minister), the Under-Secretary for Unemployment and three persons appointed by the Governor-General. It was intended that the board should delegate its powers to unemployment committees who would specially consider the problems of land settlement, women out of work and industries both primary and secondary. Air Jordan: Has the Government i subsidy been cut out ? | Air Smith: No. For every £1 col- j lected the Consolidated Fund will still have to provide a subsidy of £l. Air Smith said that under the new proposals a man fortunate enough to have an income of £IOOO a year would have to contributed £l3 10s to the fund plus the £1 levy. Air Kyle: Do you think that will increase unemployment? Air Smith: AYo hope not. If we can get some of the local bodies who have been dispensing with the services of permanent men, in order to obtain advantage of tho relief schemes, to discontinue doing so we will have achieved something. Continuing, Air Smith said that employers would be given power to affix special unemployment stamps to the weekly wage sheets. The opportunity would also be provided for the payment of the quarterly levy in this manner. It was hoped in this way that less irritation would be caused. Air J. S. Fletcher : What about the 40,000 defaulters? Air Smith : I don’t know where those figures came from. The hoard has gone a long way to meet cases of hardship. There are very few people in the Dominion who have real grounds for declining to pay the levy. The Minister added that it was the intention to prosecute for non-payment of the levy except in cases where there were special reasons for not doing so. Air J. Bitchener: How will the struggling farmers get on? Air Smith: They will have to pay the levy, of £l. If at the end of the year they can show they had no income they wiil not have to pay the special charge. They will not he asked to make out income tax forms.

Mr Forbes: That would be giving au open cheque. Unless we have the amount it is proposed to raise under the Bill we will not be able to make adequate provision for dealing with unemployment. Replying to Mr Bitchener, Mr Forbes said that small farmers would simply lie required to make a declaration as to what income thev bad bad during the previous year. The special tax on incomes would be applied in the same manner as the ordinary income tax, namely, on income derived up to March 31 last. COMPANY INCOME EXCLUDED. Mr W. Nasli: Will the special tax be levied on incomes of companies? Mr Forbes: No; it is a tax on individuals. Mr Nash: Will there he a tax on undistributed profits ? Mr Forbes: No. Mr Nash: Then if a company held up its profits it will not be subject to the tax. . , Mr Forbes: This is a tax on individuals who are in employment, to make it possible to find employment for those less fortunate. Referring to the proposed alteration in the constitution of the board, Mr Forbes said that it was felt that more effective work could be done by a smaller board. Furthermore, the new system of appointment would enable a wider choice of men. Members of the board would receive £3OO a year, and the deputy-chairman £4OO. He could assure the House that there would be no question of politics when considering the appointments. No reflection on the work of the present board was intended. It had done the best possible under the existing CE-

Replying to further questions, Mr Smith said that in cases of people paying a special rate in respect of incomes the tax of threepence in the £1 would be collected on last year’s income. The board would have power to deal with every class of unemployment whether it affected men, women or boys. No sustenance would be provided for anybody.

eumstances. What was required was a board that would be able to devote more energy in the matter of land development. It was important to appoint men who had some particular knowledge of land settlement. Air R. A. Wright suggested that it would have been better to increase the wages and income levy all round, instead of keeping a flat rate. Air Smith: AYe would lose contact with thousands of people.

He pointed out that if a man was so poor that lie could not pay the levy, there was provision ill the bill for exemption. Air Wright contended that it was unfair to impose taxation on last year’s income when so many people would be lucky to avoid losses during the current year. AIEAIBERS PROTEST. Air Parry protested against imposing the levy on people who had to go on relief works. He said that he knew of one woman in Auckland who liad to pawn lier wedding ring so that her husband could pay his instalment of the levy before getting work. “It’s all very well for Alinistcrs to sneer,” he said, thumping his desk. “It’s childish,” Air R. Semple declared. “At the risk of being sneered at by some of the cultured members of tiie United Party, I am going to protest against levying the tax on the man without work.”

Air F. Langstone advocated taking the results of the 10 per cent, cut from private employers and putting the money into the Consolidated Fund with the result that between £5,000,000 and £10,000,000 should be collected. Air D. G. Sullivan expressed disappointment that the Alinister had not indicated whether any extra days’ work would be given under the new scheme.

Air H. E. Holland asked the Alinister when he proposed to take the second reading of tho Bill. The Prime Alinister said the second reading would bo taken to-morrow, and lie hoped tho House would be ready to go on with the Committee stage on Tuesday. Air J. S. Fletcher characterised the suspension of the No. 5 scheme as t!ie most brutally callous act in the history of the country. Air Parry asked whether the Alinister expected the Bill to go through the House. Air Smith: It has a fighting chance. ALr Parry: Before it goes through the Alinister will know that lie has been fighting. The Bill was read a first time. POINTS FROAI THE BILL. PENALTIES FOR DEFAULT. WELLINGTON, _ July 2 ; In addition to the points in the Unemployment Amendment Bill explained by the Alinister of Labour, the measure stipulates that the emergency charge—the wage-tax and income-tax —shall operate for one year only, ending upon July 31 next year. Those who pay relief tax under this Bill will be entitled to commensurate exemption from their assessable income for the period. The Alinister of Finance is empowered to pay the subsidy from the Consolidated Fund into the unemployment fund up to three months in advance if the money is required for urgent purposes. Payments made in advance under the old” levy will be adjusted and credited to the contributor under the new scheme. The penalties are tightened under the new provisions. Fourteen days’ default, in place of one month as before, make the defaulting contributor liable to a fine of £5. The fine of sixpence a month upon unpaid instalments stands, but instead of recurring indefinitely, it is now limited to a maximum of half a crown. The exemptions remain the same, and the board is empowered to grant exemption to anyone suffering hardship—retrospective if thought desirable. No refunds arc permissible, however. Income derived from sources other than wages or salaries is assessed for special taxes up to two-thirds, the remaining third going free of the special tax. This applies to income derived overseas as well as here, and applies also to women who last financial year received more than £250 in income. The emergency taxation is payable on November 1 this year and February 1 next year. Fourteen days’ default makes the contributor liable to a fine of £5 and to a further penalty of 10 per cent, of the tax. Special.stamps are to be created and sold for the purpose of denoting the payment of the unemployment relief tax, and all revenue from the sale of these stamps is to be paid into tho unemployment fund. In cases where the payment of an instalment of tho levy is 14 days overdue the amount may be deducted from wages or salary by the employer. Among committees to be set up is one which is to consider proposals and make recommendations for the development of unoccupied lands with a view to increasing the production of primary products of the country. Another committee is to deal with assistance to women in any manner contemplated by the principal Act. Tho present Unemployment Commissioner will retain that post.