THE YEARLY ESTIMATES

Otago Witness, Issue 4041, 25 August 1931, Page 9

THE YEARLY ESTIMATES

RECEIPTS AND EXPENDITURE | WORK FOR UNEMPLOYED. HEAVY CALL ON FINANCES. The yearly estimates and the estimates cf the trading departments are dealt with in the town clerk’s annual report. It is explained that the unusual delay in dealing with this matter was due to the necessity of awaiting the result of the poll on the rating system, and also the decision of the Arbitration Court on the question of the general wage reduction. “In the past,” states the report, “ the estimates have been dealt with much earlier in the year, but on the present occasion a policy question of more than usual importance is involved, inasmuch as the council is called upon to provide a substantial amount to cover its portion of the cost of the supervision and other expenditure in giving effect to the Unemployment Board’s scheme for providing work for the men who are registered as unemployed. While the board provides the whole of the wages of the men, the council is called upon to provide supervision, cartage, and the cost of tools and any material that may be required. “ The work so far selected as suitable for the men seeking employment has been of such a nature as to call for little or no material, but the provision for carting is a very costly item. For the 15 days from April 27, when the operations under the. No. 5 scheme were resumedj until May 13 the outgo on carting ana tools cost us £658, while the total cost to us for the same period was £1272 2s sd. There is just a doubt as to whether it will be possible to find work of a class to enable us to keep the expenditure within that limit for any extended term.

“It is plain, therefore, that if the council is to assume the-responsibility for finding work for any considerable number during the full year, then provision must be made in the estimates for a substantial amount, quite apart from the actual wages of the men employed, and which is refunded to us by the Unemployment Board. Not less than £25.000 to £30,000 for the year will be required, and it is for the committee to consider how this (airly heavy call on the finances is to be met.

• “Last year the rates imposed were as follows:—-General rate, 2s Id; Hospital rate, sd; water rate, 9d; drainage rate, Is 2d; —total, 4s sd. “ The general rate of 2s Id included Id especially set apart for tar-sealing certain of the carriage ways, and the provision has proved of great value. It was hoped to continue the practice, and thus provide funds, for the extension of the area to be tar-sealed. In view, however, df the heavy demand to provide for the unemployed, and having regard to the prevailing depression, the committee may think it prudent to defer the extension of the tar-sealing for the current year, and the draft of the estimates has been compiled on a basis of a general rate of 2s. It would be possible to reduce the general rate by a further penny, or by twopence in all, should adjustments in the salaries and wages be made in terms of a. separate report on the subject that is attached hereto.

“Then the Hospital Board hae reduced its demand on the city for the current year by £6913. This account stands alone, and the proceeds of the rate are used exclusively for payments to the Hotspital Board. There is a deficit in the account to March 31 last of £2263. This year’s levy amounts to £22,957, making a total of £25,220 to be found, which calls for a rate of 41d, producing £25,636. It is possible, therefore, to reduce the Hospital rate by only one halfpenny in the pound, levying this year 4£d, as against the 5d of last year. The requirements of the Drainage Board can be met by the imposi tion of the same rating as last year. The same applies to the Water Department. “ Summarising this data, and assuming that a penny reduction in the general rate is made available as the result of salary and wage reductions, the rating position could be met as follows in comparison with last year’s figures:— 1930-31. 1931-32.

A reduction of 2Jd in the pound in our rate demand represents a decrease in the total call on the ratepayers of £14,242 for the year. Against this, however, is to be considered what provision is to be made to cover our cost under the No. 5 scheme of the Unemployment Board for the year. It is evident that the board is relying almost entirely on the local authorities to find the necessary work, the board providing the actual wages of the men. That entails, as I have already explained, a yearly charge on us of anything from i £25,000 to £30,000 for the year on the basis of the present number of men registered and eligible for work. To provide, say, £30,000 for the purpose referred to would mean that the 2£d therein shown as a probable reduction in the rate demand would not only have to be imposed, but a further £16,000 would have to be levied, and that implies an advance in the general rate of, say, three pence, which, by calculation, should produce £17,000. “ As an alternative method of providing the necessary funds it has been suggested that an all-round increase of 10 per cent, be imposed on the electric and gas ac counts. Such a provision would provide £25,000 on the basis of last year’s business for the 10 remaining months of the present financial year. It may be, of course, that last year’s outgo in either of the departments may not be attained, but the same contingency is to be apprehended in respect of any addition to the rates. The calculated amount may not be fully collected. The advantages of the special impost on the electricity and gas accounts lie in the fact that the burden would be much wider spread, that the contributions would come in forthwith and in small monthly amounts, whereas the product of the increased rate would not be available, in the main, for six or seven months, and would then have to be found in a lump sum at a time when the ordinary payment « had also to be made. Assuming, there-

I fore, that the responsibility is to remain with the city to continue under the existing scheme for meeting the unemployment problem, it seems clear that the position can be met only by the choice of one or other of the alternatives already mentioned. or by a combination of both of them. Briefly stated, therefore, the position is as follows:— l lf the com mittee elect to provide the necessary funds to cover the unemployment problem by means of a general rate, then an increase in the rate demand amounting to 3d in the £ should be provided for in addition to the total levied last year, and after allowing reductions in the expenditure amounting to £14,242. If, on the other hand, a surcharge of 10 per cent, on the gas and electric accounts be imposed, the savings of £14,242 could be deducted from this year’s rate demand by a reduction in the rating of 2Ad in the £. A compromise would be to retain the present rate demand, thus providing £14,242 towards the cost of the unemployment scheme and add a surcharge of 5 per cent, on the gas and electric accounts. It may be possible upon close scrutiny to effect a few savings in the expenditure side of the draft as drawn. There are a number of grants that the committee may regard as open to consideration in view of the present exceptional circumstanc&s; but, in any event, the amount so saved would not materially assist the position The report of the Finance Committee to council on the matter, after dealing fully with the draft estimates, recommended that the general rate be reduced from 2s Id to Is lid. the Hospital rate reduced from 5d to 4id, that the water and drainage rates remain at the present figures of 9d and Is 2d respectively, and that the additional money required for un employment relief be provided by means of a 10 per cent, surtax on electricity and gas accounts. After a very full discussion, council decided that no reduction should be made in the total of the rate struck, and that a 5 per cent, levy be made on electricity and gas accounts in lieu of the 10 per cent, proposed by the committee. That left the position with regard to the rate for 1931-32 as fol lows:—

“When the statutory resolution for levying the rates came before the council on June 10, the question of the 5 per cent, levy on electrical and gas accounts also came forward on a notice to rescind the previous motion. This rescinding .resolution, which was carried, abolished the surcharge altogether, and provided funds in lieu thereof in the shape of the following special transfers from the trading departments’ profits:—E. P. and L. Department,, £7500; Gas Department, £3000; Water Department, £lsoo;—total, £12,000.”

s. d. 6. d. General rate . 2 1 1 11 Hospital rate . 0 5 0 4i Water rate 0 9 0 9 Drainage rate . 1 2 1 2 4 5 4 ~2J

1930-31. 1931-32 s. d. s. d. General rate .. ..2 1 2 U Hospital rate .. ..0 5 0 44 Water rate .. .. ..09' 0 9 Drainage rate .. ..12 1 2 Total ..4 5 4 5