NEW WORKS PROGRAMME

New Zealand Herald, Volume LXXII, Issue 22197, 26 August 1935, Page 10

NEW WORKS PROGRAMME

Until details are available of the Unemployment Board's programme "to take thousands of men off sustenance and to place them on major works at standard rates of pay," any considered judgment must be suspended. The objective is excellent but the method may prove to be unsound. More should be known of the nature of the works and of how they are to be financed. The Unemployment Board has an income of about £5,000,000 a year, yet the Minister says it could not undertake to find the whole of the necessary money. Does that mean that a public works loan is contemplated 1 If so, the Government would do well to consider carefully whether the future should be mortgaged to meet current relief expenses and, in any case, whether the expenditure of borrowed money is likely to give the desired result. Other countries, and notably the United States, have poured out millions in this way without producing any real improvement. On the other hand, the most steady and substantial gains have been made in Britain since 1931, when the Labour Government's practice of borrowing to support the unemployment fund was ended. The National Government has so far consistently resisted the pressure of those who would launch a loan programme of works. Tt believes that employment can best he stimulated by restoring confidence, accompanied by a natural expansion of trade and industry. New Zealand's creat achievement in the depression has been to meet unemployment expenditure mainly out of income, rather than out of capital. She should think lone and carefully before going back on a sound policy. And she should also ask what would be her procedure if. the loan millions spent, she found the problem still unsolved 1 After all. the burden of past borrowing has been a main factor in prolonging the depression. It is extremely doubtful whether it would be good policy to try to borrow a way out. Moreover, past experience with public works has not been so happy as to commend this form of expenditure. At the present moment the case of the Te Anau— Milford Road is before the public, a work so extravagant that the Government has unloaded the responsibility on to the Main Highways Board. Before a series of new projects is launched, the public will need to be satisfied that the Government has first counted the cost, and that the works are economically justifiable. The time for economy has not passed, nor can the taxpayers be expected to underwrite new loans unless the new works offer an indisputable return in earning power or increased national efficiency.