PUBLIC SERVICE SALARIES

Northern Advocate, 16 April 1932, Page 3

PUBLIC SERVICE SALARIES

INCIDENCE OF REDUCTION. (From Our Parliamentary Special.) WELLINGTON, Friday. When the first reduction in Public Service salaries was imposed in 1931 t operating from April 1, it was on the basis of a flat rate of 10 per cent. The Government declined on that occasion to operate the graduated system, and this attitude was also taken during recent, weeks by the National Expenditure Commission, which recommended another 10 per cent, cut in preference to graduation, on the grounds that the latter principle involves many anomalies, and that, moreover, graduation is .1ready substantially provided for by income tax.

Tho legislation now being considered by the House of Representatives provides, however, for the adoption of .i gradual scale of reduction, salaries up to £225 bearing a cut of 5 per cent., those from £225 to £720 a cut of 10 per cent., and above this point 124 per cent. No official estimates have yet been given of the possible results of the reduction on the basis of the scale adopted. The National Expenditure Commission suggested that a flat rate

of 10 per cent, would save £624,000,

The Minister of Finance has so falcon lined liis estimates of savings to a figure which includes both salary and pension reduction, which will aggregate £1,000,000. However, some important information as to the distribution of various classes of salaries was given last year by the Prime Minister, and from these figures the incidence of graduated cuts can be approximately shown. .Salaries of the Public Service are as follows: Salaries Animal Expenditure Over £IOOO £74,222 From £5Ol to £IOOO .... £1,117,227 From £2Ol to £SOO £9,109,000 Up to £2OO £1,389,000 This scale does not exactly coincide with the Government's graduations, but it shows clearly that quite £9,000,000 of salaries will come under the 10 per cent, cut, that the 5 per cent, .rate is hardly likely to cover more than £1,500,000, and that the highest rate of cuts will affect only a small proportion of the Public Service, which will also be subject to income tax on a fairly heavy scale. Assuming that last year's income tax is not increased, the effect on salaries will be as follows:—

Salary of £3OO, £2 0/2; £SOO, £1.2 S/7; £IOOO, £B4 3/4.

In connection Avith the proA'ious reduction in salaries, the Treasury reported that graduations which exempted those under £2OO and placed a 5 percent. cut on salaries up to £SOO, AAdth 10 per cent, between £SOO and £IOOO. and 20 per cent, over £IOOO, would produce £OBB,OOO, but the GoA'cmmeut Avauted £1,000,000, and adopted the allround 10 per cent, reduction.