The Times FRIDAY, APRIL 20, 1945. What the War Costs You

Manawatu Times, Volume 70, Issue 93, 20 April 1945, Page 4

The Times FRIDAY, APRIL 20, 1945. What the War Costs You

The statement by the Minister .of Finance that New Zealand’s war cost up to March 31 of this year has exceeded £500,01)0,000, is a financial expression really incomprehensible to the average citizen who regards himself fortunate if he sees £SOO a year, let alone millions. What the sum means may be better appreciated by comparing it with the total estimated wealth of the country as at prewar valuation, £1,000,000,000. It will thus be seen that the war has cost us the equivalent of half our national wealth. Personal comparisons are, however, the best of all, the most readily understood. From this standpoint it may be stated that the war has cost each man £I2OO, presuming him to be the head of an average household of four persons. For the war bill represents a charge of £3OO upon every man, woman and child in the Dominion.

Let us, however, revert to the household basis. The £I2OO cost on the average home over the five and a half years of the war has been a charge of £220 odd per annum, or more than £4 weekly. All this, of course, has not had to bo paid for in cash. Only 38 per cent, was raised by taxation, but even so it has represented a quite heavy charge of £460 per household, which is over 30s weekly throughout the war period. Lend-Lease has been a quite considerable factor accounting for no less than 17 per cent, of our war costs, and that represents about £2OO per household; approximately 14s weekly. No one quite knows whether this is to remain a charge or simply written out after the war is over.

Now consideration must be given to that greater part of the war bill, represented by loans. These have provided 55 per cent, of our war costs, representing about a £540 mortgage on the average household incurred at the rate of 36s weekly throughout the five and a half years of the war. When the war is over that burden must continue to be carried, and it may be regarded as a personal liability and one that should be cleared off within a reasonable time.

This £540 mortgage on every household should really be cleared in, say, 25 years and to do so and pay the interest meantime (at Government loan rates) will cost something over 10s a week. So, for 25 years ahead eaeli household will be that much the poorer. There is no escaping this, except by taking the invidious step of bankruptcy, but New Zealand will not take.that shameful course to escape a burden that can be and should be carried. Thus can be measured in personal terms what the war has cost New Zealand to date. But the war is not yet over. Japan has yet to be defeated. We have yet to make our contributions to U.N.R.R.A. and the clean-up of war accounts is always a costly business. The individual New Zealand householder must, therefore, contemplate a rather heavy contingent liability still to be met on account of World War 11.

Having regard to the strain imposed on our economic system, it is not surprising that finances have been stretched, that hardships bad been inflicted, that demands have come fptrn this quarter and that for an easing of the burden by means of higher wages, and finally that inflation has raised its ugly head. What should be obvious is that the means used to finance a nation through the extreme crisis of war are not such as to be applicable to the financing of national undertakings under the normal circumstances of peacetime.