SOCIAL SERVICES

Wanganui Chronicle, Volume 83, Issue 167, 18 July 1939, Page 5

SOCIAL SERVICES

GROWTH OF EXPENDITURE REVIEWED EFFECT ON TAXATION LEVEL t ( An up-to-date review of New Zea- c land's huge unproductive expenditure on social services is made possible by j the recent publication of the accounts j for the State's financial year 1938-39, says a statement by the Associated Chambers of Commerce of New Zealand. ] Since these social services are chiefly responsible for the weight oi taxation under which the country is ( now labouring—a taxation burden which apparently is to be made even t heavier during the present session oi f Parliament—the extent of their expansion, both actual and proposed, k j of considerable importance. ] A fitting basis for the purpose f j comparisons is the year 1928-29, wiicn j the value of national product! ;* reached its highest point in New Zealand’s history tin exceeded in 1936-37. The following table shows the exi?nt to which expenditure on social services has been increased in different years:—

Figures for the value of national production in 1938-39 are not available. The year 1939-40 brings in the cost of the Social Security scheme, and, notwithstanding the automatic disappearance of the Employment Promotion Fund and expenditure therefrom (amounting to £6,474,000 for 1938-39 >

the total cost of social services will be further increased over 1938-39 by at least £4,400,000 to £23,963,000. which is equivalent to £l4 14s lid a head of population, as shown in one of the above tables. The actuary has pointed out that there would no doubt be some temporary saving of expenditure in the first financial year through certain of the new services not coming into full operation from the commencing date, but he adds that such possible saving should not be taken into ' account in assessing the financial posi- . tion in the first year. The cost of the scheme is estimated to rise from £17,850,000 in 1939-40 to £20,400,000 . after five years and to £21,900,000 after 10 years. The level of taxation on productive-, enterprise needed to support this constantly growing weight of unproductive expenditure is high, and detrimental in its effect on prices, production and the standard of living.

Health . Mental hosp's. - Education Pensions National Provident & Friendly societies 1928-29. 1935-36. £ £ 913,000 809,000 303.000 279,000 3,230,000 2,891,000 2.823.000 3,811,000 25,000 103,000 7.294,000 7,893,000 Employment fund 4,883,000 7,294,000 12,776,000 1938-39 £ Health 1,363,000 Mental hospitals 417,000 Education 4,199,0011 Pensions 6,977,000 National Provident and Friendly i societies 134,000 , 13,090,000 | Employment ‘und 6,474,000 ■ 19,564,000 The cost not only of social services, but also ol othe State services, has grown in these years, making up the formidable totals shown below: 1928-29 1935-36 £ £ Social services Other State 7,294,000 12,776.000 services 16,882,000 17,997.000 Total 24,176,000 30,773,000 1938-39 £ Social servic s 19,564,000 Other State services 22,682,000 Total 42,246,000 As can be seen the increase in the cost of social services has been at a greater rate that in the case of other services, the expenditure in 1938-3 on the former having been increased by 168 per cent, over 1928-29. The per capita figure is given below: 1928-29 1935-36 £ s d £ - <1 Social services 4 19 19 832 Other services 11 11 2 11 9 .11 Totals 16 11 0 19 13 1 1938-39 1939-40 Social services 12 2 Hi 14 11 11 : Other services 14 1. 6 ! Totals 26 4 4 Estimate. iNot available. So far as it may be argued that th? increased costs have come out of national production values that have greatly increased since the depression years, the following table shows the increasing portion of each £ on 1 he country’s national production that was needed to meet State expenditure on social and other services:- - 1928- 1935- 193729 36 38 s. d. s. d. s. o. Social services 1 U 2 2i 2 41Other services 2 8 3 1-35 3 9: 5 4 5 9-.