Poverty Bay Herald PUBLISHED EVERY EVENING GISBORNE, WEDNESDAY, JULY 14, 1937 UNEMPLOYMENT RELIEF

Poverty Bay Herald, Volume LXIV, Issue 19376, 14 July 1937, Page 4

Poverty Bay Herald PUBLISHED EVERY EVENING GISBORNE, WEDNESDAY, JULY 14, 1937 UNEMPLOYMENT RELIEF

The acting-Minister of Labour is deserving of every commendation for his spirited endeavours to find work, even though it is only temporary, for men who are now receiving sustenance without giving any retilrn. In his efforts he is entitled to, and no doubt will receive, the ready cooperation of both local bodies and the public generally. At the same time, the change in the official outlook will serve to focus attention on some factors of the unemployment problem which in recent months have been largely ignored. Paramount is the recognition of the fact that the Government itself is totally incapable of dealing with this question. Acceptance of this view is nothing new, for I previous Governments maintained that there was a responsibility resting upon local authorities to assist in finding work for the unemployed. It is not unfair to recall that some members of the Labour Party when in Opposition, suggested that the Government, by appealing to local bodies, was evading its own responsibilities. To-day, the Labour Pariy, in office, discovers a virtue in the policy of its predecessors and it is thus accepted as common ground that unemployment relief cannot be solved by the State alone. Nor is this the only change in outlook. Mr. Webb’s assertion that "the payment of sustenance is a most demoralising system,” is strangely reminiscent of utterances of members of the former Government and the decision of the Government to adopt the relief work system is in striking contrast to the earlier denunciation by its own members of the schemes previously in operation. The Government, however, is to be commended for so frankly recognising the error of its past attitude, and Mr. Webb, in particular, for his energetic efforts to rectify it. The second lesson which the Government has learned from its experience of office, therefore, is that relief work is netter than sustenance. The chief lesson, however, apparently has still to be appreciated, and that is that all forms of State aoiivity are only palliatives for unemployment and that the only real remedy lies in the development of productive industry by pri■\ate enterprise.

Up fill now, the Government has acted on the assumption that its industrial legislation would automatically solve the problem of unemployment, but it has found, despite the increased prosperity throughout the world, that comparatively little progress has been made. The number of men receiving sustenance last month was actually larger than a yeai pi e* viously, and nearly double that of two years ago. The total number of registered unemployed had been leduced by fewer than 5000 since the Government came into office, and this reduction was much more than accounted for by the increased number of State employees. The Public Works Department alone has found work for nearly 10,000 additional workers, while the Railways Depart*

ment, according to a recent statement by the Minister, is employing an extra 10,000, these two departments accounting for no fewer than 26,000 more men in employment compared with less than two years ago. It would not be right, of course, to suggest that this class of employment comes into the same category as purely relief work, but comparatively little of it is directly reproductive; practically none of it adds to the national income and nearly all of it is a continual drain on the proceeds of industry. How the public works are being financed has not been disclosed, but it is common knowledge that a large proportion of the money is being obtained by borrowing, thus adding to the public debt and increasing the sum that has to be found annually for interest. The increased roll of employees on the railways is not due tc expanding business, but to a division of the labour among a larger number of workers, and for this procedure workers in other industries have tc pay. The latest returns show that the net railway revenue decreased by £69,500 for the four-weekly period, or at the rate of £900,000 a year, this sum has to be added to the losses of the department and must be found by the community in one way or another.

It is clear, therefore, that State activities make no real contribution to a solution of the unemployment problem; the most that they can do is

to create work in Government depart- ( ments at the expense of industry gen- \ erally. The cost of all these under- ; takings must come out of the aggre- J gate national income: yet they make , no real contribution towards it. Mr. . Webb’s present scheme of local body works is open to the same objection: it has the unquestioned advantage of ; providing work instead of sustenance, but the work has to be paid for from the earnings of those in productive industry. The result of this system of "robbing Peter to pay Paul" is disclosed in the taxation figures. The Government, which before its election complained that taxation was too high, last year increased it by £6.000,000 and appropriated to the State no less than 25 per cent of the total national income. The average individual was called upon to pay nearly £2O in the year by way of taxes, and the average family between £7O and £BO. A large part of this sum was ostensibly for 1 the relief oi unemployment, but the very fact that it

had to be found out of the proceeds of industry is undoubtedly a contributory cause of unemployment itself. Unemployment can be solved only by the expansion of industry, and industry cannot possibly expand when it is being bled white by excessive taxation. This is the position that has to be faced: that the policy of Die Government is definitely preventing the application of the only real remedy for the scourge that is sapping the vitality of the Dominion. While the Government itself has got the brakes off, it has put the brakes on industry and stifled the production of those goods which are the real measure of the living standards of the people. The Government already has gone some distance in the direction of leffacing its steps in dealing with unemployment, but it has yet. to realise that the only lasting remedy lies in the removal of the present heavy shackles from industry ,and giving it the scope to develop as it should.