FORTY MILLIONS

Wairarapa Times-Age, 3 October 1940, Page 5

FORTY MILLIONS

PROBABLE WAR COSTS THIS YEAR FINANCE MINISTER GIVES SOME DETAILS. PROBLEMS OF PRODUCTION. (By Telegraph—Press Association.) WELLINGTON, This Day. Some details of New Zealand’s war expenditure during the current financial year were given by the Minister of Finance, Mr Nash, during a general debate on war expenses in the House last night. The Minister expressed an emphatic opinion that every possible effort should be made to meet expenses out of current income, so that there should be as little drain on the United Kingdom as possible, and added that the cost to New Zealand for the present financial year would probably be about £40,000,000. The sum spent on the war up to March 31 last, Mr Nash said, was just ovei' £7,000,000, and the Budget presented to the House some months ago, had estimated an expenditure of £37,500,000 during the current year, with about £19,000,000 being spent in the United Kingdom and some £17,000,000 in New Zealand. It was proposed to raise a little over £14,000,000 by taxation in New Zealand, and about £3,500,000 by loan. Arrangements had been made to have overseas war costs met by the United Kingdom Government on a loan basis at a small rate of interest. RELIEVING THE DRAIN. “We do not want to make too great a charge on the funds of the United Kingdom,” the Minister added, “so we must try not only to raise the money to be spent here but also to raise some here to relieve the drain on the British Government. The real costs of the war must come -from current production, and every endeavour must be made to provide as much as possible from taxation in preference to borrowing.” The total cost of the war from the beginning of the financial year to August 31 last had been £12,241,000, the Minister said, but in addition there were imprests outstanding of more than £2,000,000. Pay and allowances accounted for £3,782,000, stores £l,617,000, land and buildings, £3,821,000, accommodation, victualling and clothing £1,928,000, transport £366,000, miscellaneous items £671,000, and civil expenditure which really applied to the war £56,000. Mr Nash added that, out of the money provdied for war purposes to August 31, £4,450,000 had come from taxation and £2,288,000 had been transferred from the previous year’s vote, making a total of £6,738,000 from taxation. Miscellaneous items, mostly recoverable, totalled £357,000, donations £58,000, interest free loans £2,428,000, and other borrowings £3,754,000. So far the only account received from the United Kingdom had been one for £1,000,000, but the actual sum to be met might advance by leaps and bounds during the next month or two, as there might be an account of £5,000,000 or £10,000,000 to arm our men overseas. EQUIPMENT COSTS. Detailing some of the items of equipment for the forces, the Minister said that boots had cost £254,000, clothing £1,348,000, and crockery £46,000, out of a total of £2,128,839 to date. The cost of food alone to August 31 was £512,000. All these quantities had to be subtracted from the amount of goods available for the civilian population, and in that way there must be less goods available for civilian use during the war years. That had not been realised quite enough up to the present. ,

Mr Wilkinson (Independent, Egmont): “You mean the Government hasn’t realised it” “The Government has realised it for a long time,” Mr Nash replied, “but some members of the Opposition cannot have realised it as they have been supporing an agitation to bring more goods in.”

PROBABLE WAR COSTS THIS YEAR

Mr Holland (Opposition, Christchurch North): “Why not produce more?” Mr Nash: “Factories in New Zealand have increased their production by £3,500,000 during the past 12 months, and in spite of what may be said by members of the Opposition I can see no evidence of inflation.” Members could work out the current cost of the war to a certain extent by multiplying every New Zealander on service overseas by 7s, Mr Nash added. That would be the cost in poupds a week, but in addition equipment would probably cost £7OO to £lOOO for each man. He added that it might be necessary to buy considererable quantities of equipment for the defence of New Zealand, and the expenditure to the end of the financial year was likely to be about £40,000,000. HOURS AND PRODUCTION ■ “You cannot send 20,000 men overseas, and have 30,000 to 40,000 others in camp and expect the same quantity of goods to go into production,” Mr Nash said. “If we cannot make it up we must go without.” Mr Holland: "Or work a little longer.” The Minister: “If all the members who suggested others working harder would work a little harder themselves .” A voice: “What about the 40-hour week?” The Minister replied that the Minister of Labour, Mr Webb, was keen on increasing production, and already extra hours were being worked wherever this would help production. "We are faced with the loss of the labour of 20,000 men, and some 40,000 more are in camp,” Mr Nash continued. “Then there is the cost of the material they are using. We in this country can get ample food and I believe ample clothing, and fairly decent houses, but we will have to work hard to maintain the standards we have.

"There is no question that we must all share the sacrifices. For some it will mean physical difficulty and..,for others difficult adjustments of commitments. I would not compare these with the air-raids of London. New Zealand has not yet realised what it has to do and what it ought to do.” Mr Nash discussed briefly the dangers of inflation, and said he would be failing if that method of paying for the war were adopted. This did not mean, however, that it was possible to take the entire cost of the war out of existing production.

“As a nation we will pay some day,” the Minister' added. “We are trying to take the honest and fair way and asking the taxpayer to pay his contribution, and to the extent that we cannot pay out of taxation we are trying to borrow on terms that are reasonable and fair.”

Mr Nash said he thought it almost certain that things might be- a little better in 12 months’ time, but the man who worried about interest, except for maintaining his home, while the fate of the Empire was being decided, had lost the picture of what the British Commonwealth was facing today.