PAYMENT TO WORKLESS

Otago Daily Times, Issue 20961, 26 February 1930, Page 7

PAYMENT TO WORKLESS

PROPOSAL OF GOVERNMENT COMMITTEE ALL WORKERS TO BE TAXED. / MEN AND WOMEN CONTRIBUTE. . t Twelve to twenty-four shillings ANNUALLY. . •'. ‘ ' I . t A CALL ON LOCAL BODIES.

The Special Committee which has for some months past been investigating the question of un employment, at the request of the Minister of, Labour (Mr W. A. Veitoh), has presented its re-; port to the minister. The Committee is of opinion “ that the creation of employment ■ hy carrying out public works is not an economic method of dealing with the un employed, and it would he cheaper for the community in many cases to provide sustenance payments for unemployed workers until employment of an economic value can be found for them.” -This paragraph contains, in large measure, the effect of the ; Committee’s recommendations.’ The payment thus made would, cease on reproductive employment-being found for the workless. , The main portion p£ the fund to provide’ for the workless is to be raised by the taxation of the workers in sums ranging from 12s to 24s annually, , Fur ther money will be found by taxation on certain incomes,?company profits, and land, with a subsidy from the. Government of one-third of the total expenditure. “It is .our, considered opinion,” says the Committee in its report, “that the application of relief measures hitherto has been . unscientific, at best to be regarded as .a / temporary expedient only. “ Unemployment insurance as generally understood ' and operated in other countries is un suitable for New Zealand, and the reasons are given at some length, the committee following- its critical view of existing systems with a complete scheme of its own. 1 . ' “ Those who advocate for New 1 Zealand the adoption of an insurance scheme- similar to that of England have not fully recognised the great difference that exists between local and English .conditions. In England secondary industries are highly developed. Workers entering'an industry tend to continue, in the same in- , dustry during their working life. -Under such conditions insurance is possible but in New. Zea where many .secondary industries are just struggling to establish themselves, where , workers—particularly unskilled workers—move freely from one industry to another, and where the seasonal character of our main • industry—farming—is so pronounced, vthe conditions do not" lend v themselves to such a system .of insurance.” The cqmmittea considers that the main function of a New Zealand scheme would be to secure an opportunity for employ-, , raent of all workers who are capable and willing to work. .It is -unanimously of opinion that the usual unemployment insurance schemes would be a grave mistake.

• UNNECESSARY PUBLIC WORKS,

vidual incomes! (including dividends), in excess ox £3OO ' per annum* .A flat tax of Id in the f on all undistributed profits of companies, and on the dividends of all v absentee shareholders in registered companies. A flat tax of 8-16 d in the £ on the taxable balance of . unimproved value of country lands, as assessed for land tax. By the annual subsidy from the Consolidated Fund of one-third of the board’s total annual expenditure. ' The report suggests that as local bodies would by the operation of this scheme be relieved of a financial liability which they have hitherto been obliged-to carry, it would be right ,if they directly contributed to the employment and sustenance .fund 1 per 'cent, of their annual revenhe from general rates. The suggested receipts of the board would total, £700,000 per annum, made up as follows: — £ Employees’ taxation .. . , 505,000 Income tax, including dividend tax .. .. 80,000 Tax on undistributed company' profits 22,500 Tax on country lands 67,500 Counties’, cities’ boroughs’, and town districts’ contributions 25,000 Total ~ £700,000 It is pointed but that the State con--tribution would vary with the extent of unemployment' each year, while the other sources of revenue would be constant, and enable funds to be built up to meet special years of stress. PAYMENTS TO WORKLESS. THE SUGGESTED SCALE. Though the report strongly stresses the .primary importance of finding useful work, it also recognises that a sustenance paymept will be needed during periods when the Employment Board may find it impossible to find work for applicants. Therefore, the following ecale of sustenance payments is suggested:— Youths under 18 who register for employment, _ euch_ amount as the board ■ may in its discretion allow. Males, 20 • years and upwards, 21s weekly, Females, 20 years and upwards, 17s 6d weekly. Males, 18 to 20 years, 15s weekly. Females, 18 to 20 years’, 12a 6d weekly. (a) Wife or (b) . person occupying position of wife or substitute in household, 17s 6d weekly. Each child up to > 16 years of age (not exceeding four in any family), 4a weekly. SPECIAL TAXATION. ’ every —"PAYER- LIABLE. The report is so extensive that it is impossible to repeat all the facts and arguments used in support of the recommendations, but it is important to quote the advocacy of the general taxation of the community for unemployment relief; ! ‘ “One of the most important effects which must arise from our method of special r taxation is that every taxpayer will feel that the problem of unemployment is one which affects him personally, but this effect will be lost to a large extent (if the board can appeal to the Government for moneys out of the Consolidated Fund. It is essential that the board’s funds should be raised in the way we haveproposed, and if the sum so raised is insufficient, then each section of the taxpayers must 'be called upon to pay such proportionately higher taxation as may be required to make it sufficient. If this is not definitely provided, then the whole principle underlying our recomi mendations will be violated.”

EMPLOYMENT BOARD PROPOSED. y. i ■ ! NEED FOR ORGANISATION. 1 . t v V - ! ‘ I The necessity for organisation has been forced on the committee’s attention,' and it remarks oh the lack of correlation of effort between existing organisations attempting to.;deal With the prob- , lem. _ “We are 'also of opinion that’ the ' creation of employment by carrying out unnecessaray public works is not an economic method of dealing with the unemployed, and it. would be cheaper for the community in many cases to provide sustenance payments for unemployed workers until, enaploymerit of an economic value can be found foe them.” The report, therefore, suggests the. creation of a. New Zealand Employment Board, consisting of a representative body of capable men, representative of organised employers, organised workers, and of that section of the community which is not represented by either of these organisations. It should function continuously, and act in an advisory and consultative capacity to the Government on all questions affecting the welfare and development of industry. It should also act as a central authority exercising a measure of control over all works undertaken as relief works whether by the State or local bodies, in order that such work should be undertaken at the most suitable time and in the most suitable places to absorb the greatest number of unemployed workers. A COMMUNITY RESPONSIBILITY SUSTENANCE FUND TO BE RAISED. TAXATION OF ALL WORKERS.' CONTRIBUTION BY GOVERNMENT. ( i T . The report discusses at great length the equity of treating unemployment as a social obligation to relieve it, and demonstrates that an insurance scheme based on contributions from industries with a Slate subsidy would probably cripple the industry and so intensify the problem by increasing unemployment. Such a system would exempt large sections of the community from _ responsibility. “ In our ■ opinion, this is wrong in principle. Unemployment arises very largely from social conditions, and therefore every member of the community' should be called upon to bear a share of the cost of remedial measures." , It is recommended that an employment and sustenance fund be created under the sole control of the proposed board, the revenue' to be secured in the following manner:— r A special individual employment,tax on all persons, with certain exceptions, such as hospital patients, casual female ; workers, and pensioners. .. This tax would be paid by all other persons over the ape , of 18 years as follows: Males, 18 and 19 years of age, 18s per annum. Males, 20 years and over, 24s per annum. ' Females (to apply to all engaged in , office, busines.3, industry, professional work, rir domestic service); 18 dud 19 years of age 12s per annum; 20 years and over, 18s per annum. Further revenue, it is recommended, would be secured from other sections of the community by the following means:— A flat tax of Id in the £ on all indi-

coNsrmmoN of board. ’ , / PERMANENT 'STAFF NECESSARY. LOANS TO ASSIST FARMERS. It is recommended that the board shall consist of six members appointed by the Governor-General, two being selected from nominations made by employers’ organisations, two selected from nominations made fay workers' organisations, and two members selected by the Government, one of whom is to represent the taxpayers not in either the employers’ or workers’ organisations, and the other to be chairman of the board. A secretary and permanent staff are suggested, and the duties of the board are defined in detail. It would investigate causes and incidence of unemployment and the measures for temporary and permanent relief. The board would be empowered to require the co-operation and arrange for the assistance of Government departments or local authorities in placing unemployed workers, and when discussing these plans to be empowered to co-opt authorised officers from these bodies. Local voluntary committees would be organised. The board would have power to make loans or otherwise assist farmers in bringing into production deteriorated lands, or unimproved land, using unemployed labour.

Arrange; with Government and local authorities to schedule works of a public and developmental character to be undertaken in times of depression, and arrange for advancing or retarding contemplated works so as to even out the demand for labour.

The board to have, power to arrange ■with local bodies for the carrying out of special relief works where necessary, and m cases where the cost of such works 19 increased through the instructions of the board, the board to be empowered to reimburse the local body to the extent of such cost. The chief functjon of the board being to keep workers in employment, the report suggests the establishment of labour exchanges, taking over the duties of the present labour bureaux and keeping closely in-touch with labour conditions, as well as maintaining the registers of workers .and employers which would be needed under the national scheme. CONDITION OF INDUSTRIES. CANNOT ABSORB LABOUR. Some of the general comment of the committee on unemployment and relief measures is also of importance. -In a former report prominence was • given to the seasonal character 'of much of the employment in the Dominion. ‘ Apart from seasonal unemployment ’ the present report remarks, “it is clear .that what may be called our normal industrial system is not fully absorbing all available labour, and that this incapacity of industry to absorb -labour. has been more evident in the last five years than during any previous period. , “In this respect New Zealand is suftenng in common with all other civilised countries. • Moreover, as stated in our first report,'we are convinced that 'unemployment arising from changes of methods and\ increased use of labour-saving machinery^is a continuing problem inevitably bound up with the development and progress of our civilisation.” RELIEF WORKS IN THE PAST. COST OF TWO MILLIONS IN THREE YEARS. The report recognises the difficulty of quickly devising a permanent and satisfactory method of absorbing surplus labour, and considers that what was done during the last five years could probably not have, been improved upon; but the committee cannot recommend this method of dealing with the problem permanently, or even for anything more than brief periods of special difficulty. The returns of expenditure on relief works by Government and local bodies show that the proportion of the total cost which has reached the worker in the form of wages has been approximately 70 per the other 30 per cent, having been absorbed in the cost of materials, supervision, and overhead. Relief works during the last three years have involved the expenditure of the following sums b.v the Government and local bodies:— ■1926-27 £256,333 1927- £673,300, 1928- £915,406 The Government’s expenditure forms the bulk of these big. sums, the 1928-29 total under this heading having been £680,393, compared with £379,565 in the previous year. The report comments thai as the State expenditure increased in 1928 29 (the I 1 orestry Department having spenv £50,000 in addition to Public Works expenditure) the local bodies’ expenditure fell away. The total amount expended by local bodies in three years was £550 542 and during the same period the State departments spent £1,285,498 Grouping both sets of figures, the report is able to demonstrate that 29.44 per cent was required to meet overhead and other charges. Apparently this aspect had not received special attention in the earlier schemes ,for unemployment relief, for the committee notes that in 1926-27 Auckland spent £7387 more in overhead and material than on wages to the workers, Palmerston North £BO7, Onehunga £495, while in 102 S-29 Plymouth spout more in overhead and materials to the extent of £172, Wanganui £2124 and Timarii £523.

EXTENSION OF COUNTRY PRODUCTION. PIGS AND POULTRY. A CUSTOMS CONSIDERATION. , There is a further suggestion which would involve an alteration in the Customs tariff. The committee points out that the foundation of New Zealand’s economic prosperity is erected on New Zealand's primary production, and that any further improvement must be achieved from an, increase in farm production It therefore considered all lines of production to see where any further considerable export trade could be developed, and came to the conclusion that pigs and poultry offer that opportunity. The report goes on to state that for the efficient carrying on of these industries it is necessary to use grain and grain products to balance the rations used on the farms. If the pig and poultry industries are to be put on an export basis, grain and grain products in Targe quantities must be available to the industry at world’s parity prices, for their output will have to be marketed on that basis. The chief grams grown, in the Dominion are wheat, oats, and barley, and if the duties on grain and grain products for the use of the pig and poultry industries were removed, these grains would still be grown in New Zealand for human consumption, “ The removal of the duties on stock foods would, hurt very few, and would create an export industry in pig and poultry products that might easily grow to be one of the largest industries in the Dominion.

REGISTRATION OF WORKLESS. DURATION OF. UNEMPLOYMENT. AVERAGE OF 31 WEEKS IN YEAR. Having noted that considerable numbers of; the unemployed had been on the registers for over 12 months, the committee appointed one of its number to examine individually a. number of cases, to ascertain as far as possible the causes which accounted for their being in their present position. One important result of this personal survey was the conclusion that not a great proportion/of the men concerned were unemployable, the majority, being deserving of consideration, and largely dependent on seasonal work, i The committee is convinced that if' the organisation it suggests is set up. many deserving cases could be rescued from the feeling that they were down and out permanently. . The men concerned were interviewed arid inquiries made from former employers and _ from other sources regarding their efficiency. Duping the course of conversations tactful questions elicited reasons for continued unemployment. In all, 453 men were dealt with—l9ft in Auckland, 81 in Wellington, 160 in Christchurch, and 22 in Dunedin.

Although only three men had done no work in 12 months; the average duration of unemployment was considered to be very high, the actual average for the whole group being 31.1 weeks. “ The. quality of the men as potential workers,” states the committee, “is surprisingly high, all things considered. The very few men marked as unemployable is due • probably to the fact that the most hopeless and reckless do. not register—there is nothing to gain by it save investigation, which they do not want. /On the other hand, the more virile and individualistic do not trouble to register, but battle round and fend for themselves. “ Seasonal unemployment seemed most marked in Christchurch, and unemployment due to municipal retrenchment l in Auckland. Unemployment due to displacement by neiy processes appears common to all centres. There are comparatively few recent immigrants in the number.” A classification of the men for efficiency gave these results:— , j Superior 1 .. 4 • Good . .. 205 Fair .. ~ 141 * Indifferent 67 • Poor 29 Unemployable .. .. .. 7 It is no£ed that of 210 immigrants interviewed 129 had been resident m the Dominion -for 10 years or more. There wore 299 oujt of the 453 who were unskilled. Motor drivers (21), farm hands (14), and carpenters (12) were the only other occupations of numerical importance. , Special circumstances militating against employment were clarified. Insobriety wa ? a, contributing factor in 29 cases, while in 79 immobility due to illness of a dependent rendered the search for work more difficult. “Lack of industry” was the verdict in 16 cases,- “ disgruntled nature’) in 9, “unsteady” in 40, “roving disposition ” in 12, while general inefficiency accounted for 5 difficult cases. . The P r .„ o !| nlnailc<! of unskilled and semiskilled was marked, and a very large proportion were in the older age groups, 199 being 43 years of age or over, as compare with 1922 between 22 and 44 years of age. The severity of unemployment increases with age. ' ,

The report contains a mass of statistical detail regarding the incidence of unemployment, and deals in greater detail with the original .suggestion made by the committee regarding the provision, on tasv terms, of dwellings for workers close to centres of employment.

A VOLUMINOUS DOCUMENT. PERSONNEL OF COMMITTEE. (Special to Daily Times.) WELLINGTON. February 25. J he report of the,special committee appointed by the Government to investigate the problem of unemployment in Now Zealand was released for publication ta'lnyLy the Minister of Labour (Mr W. A. Veitch). The menibciv, of the committee are Mcs vi'R M. D. Hunt and T. O. Bishop (representing the employers), Messrs J. Roberts and O. M'Brine (representing the workers), Mr M. Fraser (Government Statistician) and Mr 11. D. Thomson (Under-secretary for Immigration).