STATE SPENDING

New Zealand Herald, Volume LXXVI, Issue 23400, 17 July 1939, Page 13

STATE SPENDING

LEVEL OE TAXATION

SECURITY PLAN'S EFFECTS

ASSOCIATED CHAMBERS' REVIEW

-I lie level of taxation on productive enterprise needed to support the constantly growing weight of unproductive expenditure is uneconomic-ally high, «ind detrimental in its effect on prices, production and the standard of living, states the Associated Chambers of ' Y o "\" lcrce . °f Zealand in a bulletin , dealing with expenditure on social services. Jt is pointed out that an up-to-l date review of Now Zealand's huge ■ unproductive expenditure on social sei \ ices is made possible by the recent ' Publication of the accounts for the • State's financial year 1935-39. Since these social services are chiefly responsible for the weight of taxation under which tiie country is now labouring a taxation burden which apparently is to be made even heavier during the present session of Parliament tlie extent of their expansion, both actual and proposed, is of considerable importance. A fitting basis for the purpose of comparison is the year 1928-29, when the value of national production reached'its highest point in New Zealand s history, until exceeded in 193G-37. Growth ol Expenditure The following table, expressed in ithousands of pounds, shows the extent to which expenditure on social services has been increased in different years:— 11)35-30 103S-3U TI „ ... £1000) £(000) £(000) ! Wealth • ■ .. mil sou i, 3(i M i Mental Hospitals. . 303 '279 Jl7 j Education . . 3/230 2,50 l 4.1 on ! sc"?'°»s5 c "?'°»s ■ • .• • ~',S-23 3,811 0.077 j Aation.il Provident & friendly societies 25 103 131 „ . . _ T,20 t 7,85)3 13,05)0 Employment Fund £7,'201 £12,770 £10.501 i The cost not only of social services, j but also of other State services, has grown in these years, making up the formidable totals, expressed in thousands of pounds, shown below: — ! ' li)-2S-'2S) 1035-30 103S-30 j _ . , . £(000) £(000) £(000) Social services . 7,'201 1'2,770 10,501 Other State scrserviccs . . 1(3,552 17,5)07 22.052 Total ..£'21,170 £30,773 £-.12,210 The increase in the cost of social services has been, at a greater rate than in the case of other services, the expenditure in 1938-39 on the former having been increased by IGS per cent over 1928-29. Demand on Production So far as it may be argued that the increased costs have come out of national production values that have greatly increased since the depression years, continues the bulletin, the following table shows the increasing portion of each £ of the country's national production that was needed to meet State expenditure on social and other <;prvipp<s • 102S-20 1035-30 1037-3S sds d s d Social services.. 1 lVi 2 2/4 2 4 l /a Other services. .2 8 3 l/ 3 3 5 3 9 1 A 5 4 5 OVi (Ficures for the value of national production in 103S-39 are not available.) The year 1939-40 brings in the cost of the social security scheme, and, notwithstanding the automatic disappearance of the Employment Promotion Fund and expenditure therefrom (amounting to £6,474,000 for 1938-39), the total cost of social services Avill bo further increased over 1938-39 by at least £4,400.000 to £23,963,000, which | is equivalent to £14.14.11 a head of population. The cost of the scheme is ' estimated to raise from £17.800,000 in 1 1939-40 to £20.400,000 after five years I and to £21,900,000 after 10 years.