CIVIL SERVICE WAGES.

New Zealand Herald, Volume LXIX, Issue 21130, 12 March 1932, Page 13

CIVIL SERVICE WAGES.

SECOND REDUCTION URGED. PROPOSAL FOR 10 PER CENT. EFFECTIVE FROM APRIL 1. LEAD TO THE COMMUNITY. [BY TELEGRAPII. —SPECIAL REPORTER."| WELLINGTON. Friday. A general reduction of 10 per cent, in tho salaries and wages of all public servants as from April 1 is recommended by the Economy Commission. "Apart from permanent charges," states the report, "a very large proportion of the annual expenditure is in the form of salaries and wages, and the only means of bringing about a reduction in this class of expenditure is by dismissals, or by reductions in salaries and wages, or by a combination of both. "The amount payable by the Government in salaries and wages on April 1, 1931, was approximately £14,000,000 per annum, but this did not include a large number of relief workers then in the employ of the Public Works Department. These salaries 'have already been subject to a reduction of 10 per cent-., so that the total amount, now pavable is in the region of £12,500,000. Minimum of Reduction. "After reviewing the national expenditure in relation to the present and prospective position of public revenues, we are forced to the conclusion that further reductions are imperative. We have therelore to recommend a general reduction of 10 per cent. in salaries and wages of all public servants as from April 1, 1932. This is the minimum we can recommend, and, in addition to the reduction of 10 per cent, already in operation, means a total reduction of 19 per cent. We suggest that the reduction should have the same application as that imposed by the Finance Act, 1931 (No. 1). This would result in a total saving of approximately £1.250,000 but the whole of this saving would not accrue to the Consolidated Fund. "We have considered the possibility of recommending reductions on a graduated scale, but feel that a recommendation on these lines would involve many anomalies; moreover, graduation is already substantially provided by income taxation. "If the Government decide upon a further reduction in salaries and wages, we believe that the lead will be accepted by the community, and that there will be a consequent fall in the money value of emoluments generally. Reductions in wages will not of themselves achieve a return to prosperity, but, as an important factor tending towards economy and lower costs of production, will help to bring about more stable financial conditions. Saving to Consolidated Fund. "Turning now to the effect upon the Consolidated Fund, we find that out of a total expenditure on salaries and wages of approximately £12,500,000 per annum, the amount payable from the Consolidated Fund is approximately £5,400,000. Our recommendation of a reduction of 10 per cent, will, if given effect to, result in a direct saving of £540,000 to the Consolidated Fund. "There will, however, he direct gains through tho Railway Department and Post and Telegraph Department, as the savings in salaries in those departments will result in increased returns to the the Consolidated Fund for interest and profits. It is safe to assume that the benefit will be equivalent to the actual reduction in salaries, which will he approximately £624,000. There will be some small indeterminate gains from other accounts, but for all practical purposes these need not be considered here. "We wish to refer specially to the position of the Public Trust Office, the Government Life Insurance Office, and the State Fire Insurance Office, in so far as reductions in salaries are concerned. The previous reduction of 10 per cent, was taken in those departments from the funds of tho offices as relief to the Consolidated Fund, and, while this may perhaps have been justified as being some return in respect of tho guarantee of the Government, either actual or implied, we consider that the departments should receive the benefit of any further reduction. These departments are i n competition with private institutions and should not be deprived of the advantages enjoyed by their competitors."-