THE UNEMPLOYMENT ACT

Taranaki Daily News, 20 November 1930, Page 11

THE UNEMPLOYMENT ACT

EXPLANATION BY MINISTER

DEFENCE OF THE FLAT RATE TAX

MEANING OF SUSTENANCE CLAUSE.

A post-sessional address on political matters, with particular reference to the Unemployment Act, was delivered to the members of bis constitutency in New Plymouth last night by the Hon. S. G. Smith,''Minister of Labour. Mr. Smith concentrated on a defence of the flat rate ' tax and an explanation of the meaning of /the sustenance clause, and emphasised that the Act was in no-sense similar to the lamentable dole system of England, which would be ruinous if introduced into,New Zealand The speaker pointed out that the operation of the Unemployment Act would to a large extent be an elaboration of the system so admirably administered in New Plymouth—a town where the efficient manner of coping with the unemployment difficulty was an example io the rest of New Zealand.

There seemed to be many misconceptions about the Unemployment Act, said Mr. Smith. He wished to remove the impression many people seemed to have that on December 1 all the decent people of New Zealand simply paid over- their contributions to keep a lot of wasters in employment. Unemployment was unquestionably rife throughout the world, but how did New Zealand compare with other coun- • tries ? In Britain there were 2,300,000 in the United States many millions, in Canada 250,000, in Australia 180,000 and in New Zealand 6300, according to the registrations. It would be seen that New Zealand was suffering less than most other countries.

LARGE GRANTS MADE.

The Government had made a valiant

effort to cope with the situation in New

Zealand. From April 1 to September ' 30, 1930, £595,000 had been given to the Public Works Department for unemployment relief, £60,556 to, the Forestry Department and £lB,OOO to the Lands Department, a total of £673,550. In affdition £28,425 had been paid to local bodies, making a grand total of £701,975. Since April 1 1887 men had been placed through Government bureaux on local body relief works subsidised by the Government, and this did not represent •the total, as several local bodies did not engage through the bureaux, while returned soldiers were frequently engaged through the Returned Soldiers’ Association. In no part of the British Empire had a Government given £2 for £1 for uriemployment relief works. The New Plymouth Borough Council had realised the value of the subsidy and by. freely availing itself of the opportunity had had a tremendous amount of valuable work done in the borough. It was a significant fact that. since l April 1 4301 men had left the Government relief works of their own accord. During the last three financial years no less than £255,399 had been paid to local bodies in unemployment relief subsidies, continued Mr. Smith, and since April 1, 1930, subsidies paid or promised to local bodies amounted to £86,805. Of this sum the main centres benefited as follow:— ,

Auckland and environs £1354 Wellington and environs .... £27,561 Christchurch and environs .... £9855 Dunedin and environs £9676 Invercargill city £1126

A comparison between Invercargill and Auckland showed which places benefited ■themselves most and rendered most assistance in coping with unemployment. Auckland’s figures ■ were certainly not flattering. Government relief works were costing the country £6 per week per man. Last year alone £1.415,000 had been borrowed

for relief works and the country had to pay the interest, overhead charges and cost of accommodation of the men on the works. The Government wanted to do away with that sort of thing. It did not want to send people away and accommodate them in camps. It wanted to give them permanent employment near their homes. The Unemployment Act was a bold and humanitarian effort to cope with the problem, continued Mr. Smith. Besides undermining the moral fibre of men un- ' employment had further distressing effects on the constitution. The new Act aimed to give every man a chance. All over the country there were physically ■ weak mien who. for from 12 to 15 years had been gradually pushed out of the possibilities of even being clerks. Under the Act it was intended to prosecute inquiries into all such cases with the object of trying to equip these men for new positions! ' The speaker was being pressed to-day to organise another conference on unemployment, but what was the use? The last conference had cost £4OOO. Every employee delegate went determined not to yield one iota on the question of the minimum wage, and every .employer was equally determined in the other direction. There was no agreement except compromise, and practically no good eventuated' ’ beyond perhaps a better understanding and the setting up of tire Unemployment Committee. This committee after months of deliberation and investigation made certain recommendations, and it was on its recommendations that the Unemployment Act was based. FLAT RATE DISCUSSED. Dealing with the much debated principle of the fiat rate of contribution, Mr. Smith said he had frequently been asked why every man, irrespective of whether his wage or salary was £4 a week or £lO a week, should have to pay 30s. The reply was that the 30s was not all the £lO a week man paid, for the Government subsidised the contributions and in this subsidy the £lO a week man paid all over again. He had been asked why the Act did not provide for a graduated scale as recommended by the committee. He wished to point out bi’at every man earning over £3OO paid income tax, with the exception, of course, that he got a £5O allowance free of tax for every child under 18. The graduated tax as advocated by the committee, would have brought in an extra £7500, but it would have cost £7OOO to collect it. Under the Labour Party's suggested graduated- tax the men on wages and moderate salaries were to pay 255, but if this were done the amount collected would be insufficient, In effect, the Act meant that if the board spent 51,000,000 on employment it was not borrowed money, and if the country did that, through not having to pay interest and incidental overhead charges, it would find itself much better off in a few years’ time. "The Unemployment Act is only an extension of what you are doing in New Plymouth,” said Mr. Smith. “The only difference is that you get your money voluntarily; I am getting the shirker.” BOARD MEETING ON TUESDAY. The speaker pointed out that he was only chairman of the board that had been set up. That board would meet on Tuesday, when schemes would be submitted to it. Until it met there were certain aspects he could not discuss. He

did not say they could cure unemployment—that had been found impossible in other countries—but the board had some , schemes which would greatly ameliorate the position. They proposed to put hundreds of people on the land in such a position that it would not cost the country £6 per man to get only 70 per cent, results. There had been objections to the sustenance clause, but at the third reading no one voted against the Bill. He had been attacked for not including females under the provisions of the Bill, but he said that the position regarding women being unemployed was not acute. Only about one-fifth of the female population was in employment. The Government had been asked to collect the tax from all females except the mothers and others who were exempted, and to pay them sustenance. There were hundreds of girl’s living at home and if they had to pay the tax naturally they would apply for sustenance as it would be impossible to find them jobs. As a result they would have 4060 or 5000 girls drawing pin money. They were going to guard against young lads coming on the sustenance scheme with the idea of avoiding work. The Bill did not in any respect introduce into the country what was known in England as the dole system. There were many people, including Lord Craigavon, who would have nothing said against the dole system. It was known, however, that the dole was ruining the lives of hundreds of young men who would not look for work. The Bill followed the system adopted by the New Plymouth Borough Council in investigating every- case on its merits. Where work was not available sustenance would be given. There would be local committees working in conjunction with the officials to investigate all cases. Unfortunately there were some wasters who would take down any one but the Bill would stop them as they had to produce their registration cards, which would show where and how they had been assisted, and if they could not produce their registration they would have to show good cause before securing assistance. There was a difficulty over Maoris. Though they would have to register they would not be asked to pay the tax unless they made application, and then they would come under the sustenance scheme too. The yearly amount of 30s could be paid - at once and he had been informed that a number had already paid. ELECTION OF BOARD. He had been taken to task for not giving the workers the right to elect their own representatives, but he pointed out that that was not possible. If one section of the community elected- its representatives it was only right that all representatives of each section should be so elected, and that would be costly. He considered that the men nominated and recommended for appointment were as good as it would be possible to elect. The board also had the right to cooperate with any expert who would have the same privileges as a member save that he would have no vote. It would be possible to lend money to land owners at reasonable rates of interest to enable them to find work for men either by day wages or contract. There were 80,900 farmers in New Zealand and there must be at least 20,000 who would perhaps employ 5000 men all the year round under the system to be arranged between themselves and the Unemployment Board. That would provide productive work, far preferable to picking up 200 men in Auckland and sending them to build roads which would not be required for some years. It was hoped immediately with the funds available from the levies and other sources to place men on the land by assisting the land-holders. The Government also had land of its own to bring into production. Mr. Smith said he thought that in New Plymouth he could secure 100 men who had been brought up in the country but had to come into the town to secure work. These men had £3OO to £4OO equity in their properties and they were the men whom they would like to see go back - to the land where they could make good use of their abilities if given a' chance to make good. That would bring hundreds of thousands of acres into production and would make room in the towns for men who did not have agricultural knowledge to secure work. ‘■NEW ERA OF PROSPERITY.” There were proposals to help secondary industries. If they could get assistance in every town and country district to make the Act a success he thought New Zealand would commence a new era of prosperity and other countries would take a lesson from the experience of New Zealand. 7. The fact that the board would grant to any farmer or number of farmers loans or subsidies for the employment of surplus labour had opened up very great possibilities as it would benefit both the farmer and the worker. There were many - ways in which productive work could be found. There had been some criticism regarding the onus being placed on employers to see that their men were registered, but he pointed out that the country was passing through a crisis. The Bill had been brought in for the general good and it was to the credit of the manhood of New Zealand that they were registering very well. It had been stated that no provision had been made for intermittent work and that a man who might be out of work for 13 days and then had work for one day would not be entitled to sustenance. That was not so. If a man were out of work for six days he could secure sustenance, providing his circumstances warranted it. In reply to questions the Minister said a new Department, would not be created to administer the Unemployment Act, but the Act would be administered by existing departments. It was expected that the levy would realise about £500,000 and that the administration expenses would be altogether between £25,000 and £30,000. The only other expenditure would be the payment of £2 2s a day to members of the board while attending meetings. The board itself would not be an employer of labour but would merely bring employers and employees together, A resolution that the meeting thank the speaker for his address and express renewed confidence in the United Government was declared carried, there being a few dissentients at the back of the hall.