BUILDING SCHEME.

Star (Christchurch), Volume LXVI, Issue 20363, 21 July 1934, Page 27 (Supplement)

BUILDING SCHEME.

Allegations of Corruption Against Contractors. MR ARMSTRONG'S ATTACK. (“Star ” Parliamentary Reporter.) WELLINGTON, July 20. Charges of corruption against contractors carrying out work under No. 10 building scheme, and the allegation that members of the Unemployment Board were aware of these offences, but had done nothing to stop them, were made by Mr Armstrong (Christchurch East) in the House to-day, when speaking on a motion to introduce Mr Sullivan’s Unemployment Amendment Bill. Mr Armstrong said if there had been no relief work at least half the work done by relief labour would have been done at standard rates, and thus half the men on relief would have been employed. If there were only half the men on the register there would be enough to pay the amount of sustenance stipulated in the original Act. No. 10 scheme was described by Mr Armstrong as a disgrace. He said that it reeked with corruption from start to finish. Mr Speaker asked Mr Armstrong to whom he imputed corruption. Mr Armstrong: I impute corruption to contractors and others who are getting the subsidy and to the Unemployment Board, because it has known of the corruption and has not moved. I have proof of that. Statements by Men. He added that he had received signed statements from men who had signed blank pay-sheets and who had received little more than half the amount the contractor was supposed to pay and little more than half the amount the contractor received in subsidy. Originally the subsidy to contractors had been 6s 8d in the £ on wages, continued Mr Armstrong, and this had been raised to 10s, but now some of the contractors were anxious that it should be 20s in the £. He quoted a letter from a man who said he was supposed to receive 14s a day, which was the amount shown in the pay-sheet, but actually he only received £2 a week. . Mr Lee (Grey Lynn) : It’s a scandal. Mr Armstrong said that in one case a man had received a cheque for £3 and subsidy had-been paid on £4 10s. Mr Howard (Christchurch South): Does the board know of this? Board’s Knowledge. Mr Armstrong: It knew in February last. Mr Lee: No wonder Mr Jessep got out. Mr Armstrong quoted a case where, he said, a man received in wages £25 18s, while the contractor drew subsidy “on wages totalling £55 16s lOd. He said that complaint had been made to the Unemployment 'Board six months ago, but the only reply was that the matter would be investigated. This was not an isolated case. The building subsidy was wrong from start to finish. He had not seen any cases where slums had been pulled down and homes for workers erected in the city of Christchurch, continued Mr Armstrong. There was a wealthy manufacturer who had presented the city with a sum of money .to build a public institution, for whichgjthe city was grateful, but then he applied and got a building subsidy. Another man gave a present to the city and then got a subsidy to build a house for his daughter. Referring to a city firm he said it had made enormous profits and had pulled down one block of buildings to rebuild with the aid of the subsidy. The firm could well afford to pay for this building out of its accumulated profits, and would have done so in this case. Mr M’Leod (Wairarapa) : What subsidy did they get? Mr Armstrong: 6s 8d in the £ on the wages bill. Mr Armstrong then referred to another firm saying that it was able to pay a dividend of 8 per cent. The Unemployment Board was paying a subsidy on a building for this firm. Subsidy Cancelled. Replying to Mr Armstrong, Mr Smith (New Plymouth) said if a worker was prepared to connive in a felony the board could not be blamed. Referring to a case quoted by Mr Armstrong. Mr Smith said that if Mr Armstrong had taken time in inquire into the matter he would have found that the board had cancelled th© subsidy to the contractor and had demanded a refund of money already granted. A firm that had been mentioned had not received one penny piece of subsidy. The majority on the Christchurch City Council had undertaken for themselves the role of director-general of New Zealand, continued Mr Smith, who said the City Council was trying to run the North Canterbury Hospital Board and had the temerity to censure the chief stipendiary magistrate of the city. The majority of the Council had also instructed Mr Sullivan to move the adjournment of the House. Mr Sullivan: That is not true. Mr Speaker ordered the withdrawal of the term. Mr Sullivan: I will withdraw, and substitute incorrect. I was asked courteously to move an adjournment. I was not instructed. Mr Smith accepted this statement saying he had taken the Press Association version of the story. Mr Sullivan's Bill did not possess anything constructive, but was designed to break down the present organisation, and for that reason he would vote against it.