REHABILITATION COSTS

New Zealand Herald, Volume LXXI, Issue 21935, 19 October 1934, Page 13

REHABILITATION COSTS

LARGE CAPITAL CHARGES TOTAL OF £3,025,000 NEW ANNUAL EXPENSES [by TELEGRAPH —SPECIAL REPORTER] WELLINGTON. Thursday Capital expenditure totalling altogether £3,025,000. of which £1,800,000 should be recoverable and an annual expenditure on the industry of £306,700, are suggested by the Dairy Industry Commission, which also suggests methods by which money required may be found. A summary of the items of capital expenditure is as follows: RecoverTotal able (a) Factories . . . £500,0(10 £500,000 (b> Farms .. 1.500,000 1.300,000 (c) Research laboratories. etc. . . . . 25,000 Nil (ri) T.B. eradication 1.000,000 Nil Total . . . . £3,025.000 £1.800.000 The commission savs it is assumed the Unemployment Board will be prepared to subsidise the expenditure under headings (a), and (c) to the extent of from 20 per cent to 25 per cent, thus reducing the figure of £3,025,000 to £2,620.000 or £2,518,750. The matter of a subsidy has been referred to the board, which has undertaken to consider any proposal on its merits. Recurring Expenditure The annual recurring expenditure is estimated as follows: —(1) Farm dairy instruction and dairy-factory instruction, which it is intended shall be universal, will cost £81,700. Part of this sum, approximately £16.000, is already a charge on the Consolidated Fund, which will be relieved to that extent. (2) Tuberculosis control, after the three years' initial period, will cost approximately £150,000. This sum will also cover the cost of controlling mammitis, contagious abortion, sterility and other diseases. (3) Laboratory and research services, to be provided by the Dairy Research Institute, will cost £25,000 per annum. About £7OOO is derived at the present time from the Government and the Dairy Produce Control Board, which contribute equally, leaving an additional £IB,OOO to be found. It is proposed that the Government contribution be at thp rate of £7OOO per annum, and that the balance be found by the Dairy Produce Control Board. (4) Additional advertising and trade development services may be set down at approximately £50,000 por annum. "it has been proposed that the Government shall provide the £1,000,000 required for the initial period of tuberculosis eradication and the £25,000 required for building and equipping research laboratories," the report says. ''These may be regarded as matters of national importance and national benefit. An estimated loss of £200,000 is provided for in respect of recoveries of moneys made available for improving farm equipment, and this it is thought should also be borne by the State, it is possible, however, that, if advances to farmers for this purpose are made by law a first charge, as they should be, on the projjerties improved, this loss can be reduced to negligible proportions. The net capital cost to the State should not, therefore, exceed £1,025,000 to £1,250,000. Repayment of Advances "It is unlikely that the whole of the £2,000,000 capital expenditure for factories and farms will be required to he found by the Government from loan moneys, for, with low rates of interest prevailing, most factory owners and many farmers will make their own arrangements for finance, it is recommended that advances made by the Government should be repayable over • a period of from two to five years, according to the circumstances of each case, and that in necessitous cases no interest should be payable for the first year or two years. "it is proposed that the Government dial! be relieved of its present contribution of £16,000 per annum toward farm dairy instruction and dairy-fac-torv instruction, and that it shall contribute £7OOO per annum—instead- of £3500 per annum—to the funds of the Dairy Research Institute. The revenue derived by the Government from grading fees at present exceeds the expenditure on grading services by about £II,OOO per annum, and wo recommend that the grading fees remain unaltered, .but that the surplus be paid over to the Dairy Produce Control Board to counterbalance the saving effected in respect of instruction. The annual outlav of the Government will, therefore, be £IB,OOO. This represents a saving to the State of £ISOO per annum. Actually the saving is £12,500, for the regulations under the Dairy Industry Act provide that surplus grading fees shall be applied toward a reduction of grading fees in future seasons. "It is proposed that the Dairy Produce Control Board shall be responsible for the remainder —£288,700—0f the £306.700 for annual charges as detailed above. The means by which the board will be enabled to find the nccessarv sum are detailed in the section of the report relating to the reorganisation of the board.