WAGES TAX 1/- IN £

Timaru Herald, Volume CXXXVI, Issue 19141, 24 March 1932, Page 6

WAGES TAX 1/IN £

FOR UNEMPLOYMENT RELIEF MINISTER’S NEW PROPOSALS (Special to the ** Herald.”) WELLINGTON, March 23. Highly important proposals for the relief of unemployment were announced by the Rt. Hon. J. G. Coates in the House this afternoon. These include an increase in the wages tax to 1/- in the £, the establishment of a rural allotments scheme, the extension of the principle of placing men on existing farms and moving single men from the cities to highway construction and other camps, provision for accommodation for workers under Scheme 4a, and the extension of Scheme 5, rural areas development, land drainage, tidal flat reclamation, and reclamation of virgin land, schemes for metalling backblock roads, assistance to gold prospectors, and transference from Hospital Boards to the Unemployment Board of responsibility for relief of distress arising out of unemployment. Under the proposed rural allotments plan holdings of 5 to 10 acres will be made available. Accommodation will be supplied, and the occupant will be able to work part time for neighbouring farmers. In the meantime he may receive a portion of the present relief allowance.

Under the new financial arrangements the Consolidated Fund subsidy for unemployment will cease. A Bill giving legislative effect to the proposals was introduced this afternoon. The Minister’s Statement. The full text of the Minister’s statement is as follows: "For the information of members and the country, I desire to review the position respecting unemployment, and outline some further courses of action calculated to provide an opportunity for those out of employment. In so doing I recognise two basic considerations it is necessary to keep in mind —the effect of the burdens and taxation —for it is obvious that the more the public is taxed the greater will be the decrease in spending ability, which brings its own reactions in industry. My endeavour, therefore, is to keep a reasonable and equitable balance, and thereby avoid adding to the troubles with which we are dealing. On the otherhand it is my opinion we must not merely say that reasonable relief should be granted to those in distress, but must take every step within our power to ensure that no citizen who is prepared to work shall go short of the minimum necessities to keep together the body and soul of himself and his dependents.

A Review. “In reviewing the past few months we are able to see some cause for satisfaction. The rate of increase in the number of registered unemployed has at least been arrested in the meantime. The total stood at 51,408 on October 5. It has been reduced by 7000, and has now been fairly constant at about 45.000 for several weeks. The figure on March 14 was 44,399. At this period a vear ago the steeply rising figures of unemployment showed no slackening whatever, registrations, in fact, increased from 6000 in October to 31,000 in March. Last year the total placements of men in subsidised employment on farms "was 17,000. This represents some real progress. In moving men over the fence every care must be taken to see that these men have not displaced regular employees. The number actually on farms, as additional labour to-day is 7,000. In October last the figure was 2000. This effort to assist at once the unemployed and the man on the land appeals to me as thoroughly sound —for it is upon the farmer and unemployed that the burden of this depression has fallen most heavily. Our intention, therefore, is to extend to the utmost the means of placing men on existing farms. To further steps proposed in this direction I shall presently refer. About 1000 single men have been moved from the congested city areas into camps for highway construction. These camps were in the nature of an experiment on the part of the Main Highways Board and the Unemployment Board, and they are now to be judged satisfactory. The principle will be further extended, but with the difference that the purpose will not be confined to road work. A start has already been made in establishing a camp for married men to enable them to engage in more useful work than they could be offered in the cities.

Gold Prospecting. “Tlie marked revival in gold prospecting is due in part to assistance given by the Unemployment Board co-operating with the Mines Department. With gold at over £6 per ounce, as compared with £3/17/10 a year ago, many workings, which were not worth while, have now become so. Most of the men out prospecting and fossicking are now able to earn a living without assistance, and some have done quite well. Some hundreds of these men, in necessitous circumstances, have been given a start from the Unemployment funds. “The Unemployment Fund will be recouped to the extent of 10 per cent of all gold. “Much of the Scheme 5 work has been of limited value, but a special investigation has shown that under Scheme 5 some 10,000 men are now engaged in work of a definitely productive nature, such as land drainage, and improvement. The Unemployment Board has managed to live within its income. This has been achieved only by rigid economy, necessary owing to the limited funds at its disposal, but there are many deserving citizens whom the Board has been unable to assist at Work on Farms. “Scheme 4a will continue, and as many men as farmers are prepared to take will be made available under this scheme if satisfactory arrangements can be entered into with the farmers. When a farmer has no accommodation available for a man, and cannot provide it, arrangements will be made to provide a hut or materials to erect one.

“Although the total registered unemployed has fallen in the past five months, there is one group in which numbers have not fallen, and that is the married men in the cities. While the total of single men registered as unemployed in the four main cities has fallen from 9000 to 7000, a drop of 23 per cent, the number of unemployed married men in the cities was 11,500 in October, and is still 11,200. In March there was a negligible drop of 2 per cent. "This brings me to refer to the first measure which we proposed for the further relief of married men. We turn our attention to the land and propose a scheme of rural allotments. Under

this new plan sections of from 5 to 10 acres will be acquired by any form of tenure which is most suitable to the case, and a cottage of the public works type will be erected thereon. Allotments will be distributed throughout the rural districts. The occupant o' a section will be able to work some of the time for himself on his own place in providing his own sustenance, and part of the time for a nearby farmer or anyone in the locality who can employ him. “It is recognised that relief workers who are thus moved out will not immediately be able to earn an independent livelihood. Some part of present relief allowance will therefore have to be continued. Again, there are many cases where the landowner could make available to the worker a portion of his land, and the occupant could work in the same way—that is to jay, part of the time on his allotment and part for the farmers in the district. Government Appeal. “The Government are now appealing to all landowners and farmers to help in this time of stress. If they will respond, and I am sure they will, an impetus will be given to production, men will be found employment, farmers will have additional labour, and at least some of the men we hope will later become permanent settlers. “As typical of what can be done, ana something that has been done, we can picture a farmer agreeing to take a relief worker and his family on to his place, with a cottage provided, the farmer setting aside a few acres and providing a cow or two, pigs and such farm produce as he can, while the relief worker agrees to work on stated terms on the farm.

“This matter of placing the unemployed on rural allotments has been carefully considered. We are well aware of its difficulties and of its limitations. It is not wholly a land settlement scheme, but rather an emergency measure, to move some thousands of persons into an environment with opportunities for the individual. At the very least it will provide a shelter until the storm has passed over, and is certainly preferable to keeping families in congested areas, with little hope or opportunity. “The Government have agreed to recommend Parliament to provide a fund in the nature of capital expenditure to help to finance this scheme.

Transport and Drainage. “Transport is amongst the incidental problems raised by a scheme of this character. The Railway Board have been consulted, and I am pleased to say that they have agreed to cut charges, and to co-operate in a helpful way with this plan, to which I may say I attach the greatest importance. “I shall deal more fully with this when I speak on the Bill. Meanwhile I refer to some other work that is in hand. Land drainage offers a very valuable addition to the works to be undertaken. There are many thousands of acres of good land which only requires draining, its carrying capacity being restricted owing to its waterlogged condition. Drainage will enable this land to be made completely productive, and provide for greatly increased production, and ultimately for closer settlement. Tidal fiat reclamation also offers scope for considerable development. There may be legal difficulties in this matter, but these will be overcome by legislation. Some works area in hand, and when completed will be imediately made available to those requiring small farms. “The reclamation of virgin land proposals are being finalised, embracing the development of Crown lands by suitable men. Proposals for land settlement, not djrectly undertaken by the Government, will be sympathetically considered and encouraged. Road work, particularly metalling of backblock roads, will enable us to give employment to a considerable number of men, in providing all weather access, which settlers so badly need. The considerable increase in the value of gold will enable many areas of gold bearing country, which could not be worked at a profit at the old price of gold to be now worked, and give a reasonable return.

“After consultation with the Minister of Mines I am pleased to say provision is being made for the services of supervisions additional to those already j available. I look to a great expansion in this connection. Relief Administration “Apart from these ventures along remedial lines some further changes are being made in connection with relief administration. Scheme 5 has in the past been used almost exclusively for the employment of men in the towns and cities. A commencement has already been made to apply this scheme to country work, with the difference that the work is continued, and there are no stand down periods. It is essential that work in the country should be carried on continuously. The policy is to direct labour into the rural districts. “It has been the practice for Hospital Boards to provide sustenance for registered unemployed, particularly in stand down periods. Waste is caused by duplication, and overlapping, when the same able-bodied unemployed are assisted from public funds, by the Unemployment Board, and Hospital Boards, and possibly by other social organisations. It is, therefore, proposed to remove from the Hospital Boards the necessity for assisting. This means that any relief it may be possible to give to registered unemployed, apart from wages, will be given from the Unemployment Fund, while Hospital Boards will be responsible for relief to those whose distress is due to causes other than unemployment. “Until such time as the payment for relief is brought under one control, it is impossible to say how much unemployment is costing the country.

Relief For Hospital Boards. “It will be seen from what I have said Hospital Boards will be relieved of a considerable drain on their resources, and as a result of the proposed change in method and organisation of hospital and charitable aid, boards should be able to reduce their demands for levies on local bodies. “An increase in the income of the Unemployment Fund is imperative. The present income is £2,500,000 a year. The outgoings are at the .rate of about £50,000 weekly, and amount also to £2,500,000 a year. The cost cannot be much reduced as long as the unemployed number some 50,000 (as they do when men in subsidised employment on farms and gold prospectors are included). Then we are faced with need of taking over Hospital Boards the responsibility of providing for able-bodied unemployed. We must move men from the cities, where little work is offering to the country districts, where they will be more usefully employed. They will be giving some definite return, but the initial cost will be higher than it is now. Cessation of Subsidy. “Apart from any other increase a considerable proportion of the men who have been employed on public works, and paid out of capital funds must come on to the Unemployment Fund. It must be clear to all that the Consolidated Fund will not be able to contribute anything in the ensuing year by way of subsidy to the Unemployment Fund, nor is it anticipated that the amount payable this

year by way of levy and the special tax on wages, and income, will equal what was received during the present financial year from the same income avenues. A special tax for unemployment stands outside of ordinary taxation and outside of the State revenue. It is in the nature of an insurance, or a pool as amongst wage and salary earners, who are in employment, and those who are unemployed. From this viewpoint and so long as the available funds are economically administered, I am sure that those who are in employment and in receipt of income, even a falling one, will not grudge the increase shown to be necessary. The tax will now be extended to include women with individual incomes below £250 a year, from sources other than salary or wages. At present they are exempt, while women with the same or smaller incomes from wages and salary are rubject to the tax. This anomaly will be removed. It is necessary to ask Parliament to increase the wages unemployment tax to 1/- in the £.”

BILL BEFORE THE HOUSE. CRITICISM BY LABOUR MEMBERS. By Telegraph—Press Association WELLINGTON, March 23. When the House of Representatives resumed at 7.30 the Unemployment Act Amendment Bill was introduced by Governor message. The Leader of the Opposition (Mr H. E. Holland) said he believed the whole country would be disappointed with the scheme outlined by Mr Coates. There was nothing new in it with the exception of the increase in the unemployment tax. He was under the impression that the rural allotments scheme had been proposed long ago. Mr Coates had not shown how he was going to relieve hospital boards of the burden they were carrying. Mr Holland insisted that the imposition of unemployment tax on a flat rate basis was wholly unfair. He did not think anyone would object to 1/- in the £ as a basis, provided it was steeply graduated, but the flat rate would operate unfairly against a man on a small income.

Mr J. McCombs said that under the new scheme a married man would receive 7/6 per day, less cost of food, and would have to work for five days for 37/6 a week, which he previously received for three days’ work. In addition. he would be separated from his family. Mr McCombs described the proposal as a starvation scheme, in which the Government was entitled to take no pride. Mr D. G. Sullivan said it was proposed that women should pay tax of 1/- in the £, but were still to have no direct claim on the funds. He was disheartened that there was no indication that women were either to be exempted from payment of the tax, or to be entitled to employment under the Board's schemes. This was one of the wors* aspects. Mr Coates reviewed the development of the problem of unemployment, and expressed the conviction that the time had come when it was absolutely essential to fall back on means whereby men could be employed productively, and that meant that they would have to be employed in primary industries. He referred at length to the rural allotment scheme, and said if men could be got out to the country, and were employed on land even temporarily, the time was bound to come on improvement of conditions when tradesmen especially would be absorbed in their own occupations. There was plenty of scope for them in the country, and once their services became available to farmers he felt confident that they would be extensively employed. In the meantime progress would be made with the general policy of transferring the population from urban areas to the country. ~ . The Bill was read a first time, ana the House rose at 11.10 till 2.30 tomorrow. • ~ , The Prime Minister stated that the only business would be to receive the Mortgagors and Tenants Relief Bill, back from the Council.