RELIEF FINANCE CONTRAST

New Zealand Herald, Volume LXXIV, Issue 22820, 30 August 1937, Page 8

RELIEF FINANCE CONTRAST

A contrast is offered by the policies followed by the National Government in" Britain and the Labour Government in New Zealand in financing unemployment relief. In Britain, as announced this morning, the unemployment fund now holds a surplus of £50)000,000 due to the increase in employment and the consequent excess of contributions over payments. This large reserve, which at present is increasing at the rate of £18,000,000 a year, is regarded as a nest-egg to be conserved against less prosperous times. In New Zealand such providence is not practised. The Prime Minister has discouraged saving in general and twice steps have been taken to dissipate surpluses accumulated in the unemployment fund. Nothing is being put aside against the rainy day when more men may be out of work and less revenue coming in from those employed. The British fund, of course, is weighted by a huge past deficit of £103,000,000 incurred when, under the Labour Government of 1929-31, unemployment steadily increased until it almost reached the 3,000,000 mark. The then Minister of Labour, Miss Margaret Bondfield, was compelled to seek authority from Parliament at shorter and shorter intervals to borrow in order to supplement the fund. She was christened Madame Deficit at the time, an appellation probably not wholly deserved, because her financial difficulties were created by Labour's general policy of spending. When, on the advent of the National Government, the public finances were restored, it was decided that the fund should not be immediately chargeable with loans incurred under exceptional circumstances. The deficit, has therefore been funded and will not finally be made good until 1971.