OPPOSITION TO WAGES CUT

Taranaki Daily News, 6 April 1932, Page 10

OPPOSITION TO WAGES CUT

MEETING AT HAWERA PROTESTS. OTHER PROPOSALS ADVANCED.

In opening the Hawera meeting of protest against wages cuts on Monday, the Mayor, Mr. E. A. I’acey, who presided, said he did not intend to take any side in the discussion. He would like, however, to give the Government every credit for acting sincerely. The Government had had a- very hard row to hoe, and he believed it was doing its best.

Mr. L. B. Galbraith, who proposed a motion of protest against any further reduction of wage 6 and salaries, said they were not met in any obstructive sense nor had the meeting any political significance. They could look at the question as citizens as well as public servants, and they had just as great ari interest in a solution of the country’s difficulties as anyone. Nor was the meeting for the benefit of any political party. The object of the meeting, Mr. Galbraith proceeded, was to discuss reasonably the Government’s proposal of further wages cute as a lead to private employers. The proposal had two sides to it. On the face of it it was a wise action for the Government faced.with a large deficit to reduce expenditure, but there was also the receipts side to be considered. They had already had an experience of what such reductions meant. As a result of the last cut the Budget position had not improved, but rather had become worse. He contended that the cuts had only accentuated the position. From the latest figures it appeared that import duties had declined by almost the exact amount saved by the Civil Service cuts. The other effect had been to decrease the business of manufacturers, with an increase in unemployment. The full effect on the Government’s finances had not yet been felt as income tax was yet to be reckoned with. Business had decreased and income tax returns must be lower. The income tax did not go down proportionately because a 10 per cent, drop brought incomes further down the scale.

The great majority of wage earners had no reserves. Immediately their income was curtailed so much less money was spent. There was a popular fallacy that civil servants were very well paid, but unfortunately that was not true. Very many were earning less than £2OO a year. Dublin servants, however, fully realised that the position was serious and that the Government had to take some steps. The combined executive of the public service organisations had put certain proposals before the Government, but had received no reply. The suggestions were to issue Treasury bonds, to establish a central bank to control the currency by recognised methods, the mobilisation of gold, closer land settlement and the reduction of the Government’s interest bill by the half-yearly collection of income tax. Other proposals were a fresh internal loan, a conversion loan, and the reduction of interest and rents.

GOVERNMENT’S INDECISION; 1

Until such time as the Government propounded a definite policy confidence would not return. For example, the Government’s indecision over exchange had considerably hampered importers. Time did not permit him to examine each of the sugestions closely, but they had the approval of economists. As far. as the Treasury issue was concerned in-' flation was not a contagious disease that had to be avoided at all costs. No one of the proposals would effect an instantaneous cure, but the one that would have to be brought in to avert a deficit was the establishment of a central bank. This was supported by leading financial authorities, including Sir Otto Niemeyer. It was recognised that the collection of income tax half-yearly might cause hardship in some cases, but a similar course of action in England had brought fine results. Mr. G. R. Horsburgh said past Governments had left difficulties for the present Government to grapple with and a very serious position had to be faced. He did not whole-heartedly agree with the motion. He believed that prior to the last cut New Zealand employees had enjoyed the best standard of the world, and that was why they hid accepted the last cut with very little protest. A further cut plus the wages tax would make the total cut 23.7 per cent., and he did not think it should be made before every other avenue had been explored. Those other avenues had not been explored. While men were drawing £BOO a year on superannuation it was not just that men earning £2OO, £250 or £3OO should lose another 10 per cent. The cut would strike the business man, too. If they kept on cutting it would make the position worse. He did not speak as a Red Fed; he was the very opposite of it. The Government was facing the greatest problems New Zealand had ever encountered and he was not coming to criticise it. In time of national stress £250 was enough for any member of Parliament, Mr. Horsburgh contended. SERVICE PROPOSALS SOUND. So far as the public servants were concerned, said Mr. L. V. Carmine, they did not come to the meeting with any intention of putting difficulties in the way of the Government. He contended the public service proposals were sound and worthy of consideration. There was a strong opinion in the House, he had been informed, opposed to further wages cuts.

The petition circulated by public servants had met with a wonderful response in Hawera. Only six business men had refused to sign it and they because they wished to consult their directors. The number of unemployed had been doubled since the last cut. It was clear that the action taken twelve months ago by the Government would not solve the difficulties with which the country was faced. Any curtailment of a wage-earner’s income amounted to a curtailment of money in circulation. A farther reduction would place many business men in great difficulties. Many of the lower salaried men were feeling the position keenly. They had made commitments such as the purchase of cottages and the acquiring of life insurance policies, and many had to lose the results of their thrift. The civil servants had already had a 20 per cent, cut since 1922. If the wages tax was imposed the cut would become 25 per cent. 1

The Governments of the United States and Sweden were adopting the proposals put forward by the public servants. The adoption of all or any would uot make an immediate cure, but would cause an improvement. If the wages cuts were persisted with they would have the spectacle of a solvent State and bankrupt individuals. Public servants appreciated the Government’s difficulties but contended that the wages cutting policy was a serious blunder. They were actuated by a desire to assist the Government along soupd lines. Disaster would overtake the country if any . further reduction was made.

Mr. C. D. Dickie asked the speakers

if they did not think inflation was the biggest tax on wage-earners. ■ Mr. Carmine said the issue of Treasury bonds did not constitute an inter-est-bearing debt and had the backing of eminent bankers. INCREASING UNEMPLOYMENT. The motion was supported by Mr. WG. Simpson. As far as unemployment was concerned, New Zealand had shown the biggest increase in the world in 1931 with 184 per cent. Canada was second with 80 per cent., Germany third with 34, then the United States with 30 and Great Britain with 12. In 1910-11 New Zealand workers had produced £564 per head and in 1928-29 £lll3. The value added to the raw product after all costs had been paid was £95 in 1910-11 and £194 in 1928-29. On these figures the 50,000 unemployed could have produced £14,750,000. Interest reduction, added Mr. Simpson, had only been played with. Mr. C. D. Dickie said that to say salary cuts were the cause of unemployment was ridiculous. The cause was the arresting of the development of the land. The farming community had r. cut, of well over 50 per cent., and a great number would consider themselves lucky if they were allowed £8 per month. With £20,000,000 less to spend how could they keep wages up? He could not agree with a general resolution. There were a number of underpaid men in the public service and he would agree that the higher paid men should bear the cut. The reason for the lower income tax was not the cut but the reduction in the farmers’ income. ' FLAT RATE INIQUITOUS. Mr. L* A. Bone supported the motion, holding that another cut would not improve the position. He thought a flat rate reduction was iniquitous aud the first cut was not reasonable. The next cut would mean a greatly reduced spending power. There were many avenues that the Government might explore. For instance, there were many huge superannuation pensions. Another cut would be a disaster.

Mr. A. H. Larkman also supported the motion. The trouble was maldistribution. Mr. R. McNeill said no man would object to the cuts if interest and other costs came down correspondingly. He condemned the action of the Government in retiring engine-drivers with 30 years’ service on pensions of £2 a week. Mr. J. B. Laurenson, as a busiucss man and farmer, supported the motion. It was high land values and not high wages that was killing the farmer. If there were no wages the farmer could still not pay his way. He thought a wages reduction was a near-sighted policy. The resolution was then put to the meeting and carried unanimously. HAWERA OPERA HOUSE. “NEW MOON” OPENS TO-NIGHT. “New Moon,” coming to the Hawera Opera House to-night for a season of three nights and a matinee to-morrow, would be a picture of unusual merit even without the delightful singing of the co-stars, Lawrence Tibbett and Grace Moore, who deliver the song hits of the original stage production. The , work of such supporting members of the cast as Adolphe Menjou. Roland Young, Gus Shy and Emily Fitzroy adds immeasurably to the quality of the photoplay. George Arliss’ latest picture, ‘‘The Millionaire,” opens on Saturday, and the box plan is now open. PERSONAL ITEMS. At the annual meeting of the Hawera Association Football Club on Monday night votes of sympathy with the relatives of the late Messrs. H. Reid and J. G. Nichol, past members of the club, were passed. Advice was received at yesterday’s meeting of the Patea Harbour Board, of the re-appointment of Mr. A. T. Christensen to the board for three years from April 27. Membdrs congratulated Mr. Christensen, who has been a member of the board for 23 years, for 21 of which