LOCAL RELIEF SCHEME

Otago Daily Times, Issue 21982, 17 June 1933, Page 12

LOCAL RELIEF SCHEME

THE MAYOR’S PROPOSALS

PRACTICAL ASPECT DISCUSSED MERELY A TEMPORARY EXPEDIENT Criticism of the proposals of the Mayor (the Rev. E. - T. Cox) to raise a loan of £70,000 for the purpose of affording . relief to the unemployed in the city was expressed to a Daily Times reporter yesterday by one who has given the matter a good deal of thought. _ Not only was the scheme deemed impracticable, but it was considered that even if it were put into effect, it would fall very far short of its object*, and, while burdening the city with an added amount of indebtedness, would provide work at the most for po more than 400 men for a period of one year. It was explained at the outset that, in accordance with the aim of the Mayor’s proposals, the works must be of a reproductive . and constructive nature, and that standard rates of wages must be paid. It had been the experience of the City Council in the past that in work of this class the expenditure on materials, cartage, etc., was approximately equal to the amount paid out in wages. As a typical case of what would happen under a scheme of the nature outlined by the Mayor, the speaker took as an example a work, the finished cost of which would be £IOO,OOO. Of this amount, £50,000 would be earmarked for material, etc., leaving a balance of a similar amount to be expended in wages for the unemployed. The' rate paid under schemes subsidised by the Unemployment Board was 10s per day, and in order to bring this up to the standard rate of wages the City Council would be required to add from its own funds 3s lOd per day per man. This would mean that of the £50,000 spent in wages a sum of approximately _ £15,000 Would be spent from the council’s own funds in bringing the wages received by the men up to the standard rate of pay. 'The expenditure of £50,000- in wages would result in the Employment of, roughly, 400 men at 13s lOd per day for three and a-quarter days per week. Thus, for an expenditure of £65,000 of its own money the City Council would have provided work for about 400 men for one year. At the present time the council was responsible for finding work for 1900 men, and it might be asked what was to become of the other 1500, for whom the balance of the loan (£5000) would be available. It should be perfectly obvious, therefore, that the Mayor’s scheme. If it were adopted, would not pVovide a solution of the problem. . The speaker was of the opinion, however, that there was little chance of its being adopted by the City Council. At the present time, he explained, of the amount included in the council’s general account approximately 60 per cent, was absorbed in the payment of interest on the city’s existing indebtedness. He did not think that the • council would .agree to the raising of a further loan without the sanction of the ratepayers, and he was certain that this would not be forthcoming. Moreover, the legislation empowering local bodies to float loans for the relief of unemployment would, expire at the end of July, and, as it would be impossible to complete arrangements for the loan and submit these to the Loans Board for its approval before that date, he was convinced that the council would not accept the responsibility of further increasing the city’s indebtedness. It had to be remembered that an additional loan of £70,000 would mean an extra general rate of I4d in, the £l. Another point that must be borne in mind was that the council expected to go on the market shortly to raise a loan of £IBO,OOO for ■the extension of the city’s water scheme, and. if the Mayor’s proposaU were proceeded. with, this might he prejudiced, as it was extremely unlikely that the ratepayers would consent to saddling themselves within the next few months with a total additional indebtedness of £250,000. , Some apprehension was expressed regarding the statement which had been' made that the profits from the insurance fund account could be drawn on to meet 'interest and sinking fund payments on the loan. It was stated that this account at the present time stood at about £85,000, and it was considered that it would not be safe until the capital fund reached ,£IOO,OOO. If the raising of the loan were proceeded with on the assumption that the profits from the account could he drawn on to meet the services of the loan, it was perfectly obvious that the account would cease to grow, and would remain practically stationary during .the currency/of the loan. The City Corporation had been fortunate in the past in "that it had not suffered heavy loss through any fire in its property, hut in the event of a fire of senoug proportions breaking out the insurance _ fund would be drawn upon heavily, and in the course of a few years it was quite possible that the fund might he largely depleted. The Mayor’s proposal to spend £20,000 on the extension of the water supply in several of the city districts was condemned on the ground that this would involve heavy expenditure with the certainty that the 'return in revenue would not justify the outlay. It had been the policy of the council in the past to undertake such work out of revenue earned by the various departments, and in the interests of the citizens this was justified, hut to borrow money for such an undertaking was a procedure that would be condemned by any business main It was considered by our informant that the portion of the Mayor’s scheme relating to the clearance of slums did not come within the sphere of practical effort. In order to put this into effect it would be necessary for the City Council to acquire the freehold of the properties concerned; otherwise the council would be spending public money for the benefit of private individuals. But if the council were to pledge itself to an undertaking of this nature the proposed loan of £70,000 would be the “ merest drop in a bucket,” for once the properties had bean acquired it would be necessary to spend large sums upon them in renovations, and the council would then find itself in the position of a landlord. The council already owned a number of houses, the rents for many of which were greatly in arrears. As an example of how unprofitable such au undertaken could be, it was stated that in Christchurch of 140 houses thus built out of loan money, on November 30 last the occupiers of no fewer than 41 were in arrears with their payments. The average amount of these arrears was £SO, the figures for individual houses ranging from £2l to £164. Since November, it was understood, the position had become much worse. Was it likely in view of such information that the citizens of Dunedin would consent to the raising of a loan for slum clearance work?

The Mayor’s suggestion that many men could be usefully employed in growing root crops on unused lands was also criticised. Land suitable for the purpose, it was held, would be difficult to obtain close to the city, fn any case, such crops were already largely a glut on the market. The opinion expressed by the Mayor that an expenditure of £SOOO on seeds and manure Should return £20,000 in crops was treated ag a very wide estimate, and it was considered that the farming community would have no cause-to complain if such figures could actually be realised in practical effort. • In conclusion, the speaker said he was convinced that the proposals outlined by the Mayor were neither capable of practical application nor' were they of a nature calculated to appeal either to the Finance Committee of the City Council or to the general public. THE MAYOR’S PROPOSALS REFERRED TO SUB-COMMITTEE The Mayor’s proposals for the reorganisation and revision,of municipal unemployment relief, as submitted to the last meeting of the City Council, have been considered by the Finance Committee, to whom they were referred, and the following report will be made by that committee to the next meeting of the council: —With regard to the instruction of the council to report on the Mayor s proposal for the raising of ,a loan of £70,000 for the purpose of unemployment relief, his Worship has now submitted a modified scheme, which has received some preliminary consideration, and lias been referred to a sub-committee with instructions to investigate fully and report thereon to next meeting of the committee.