B—6

The rise of about £3 •25 million in the social security charge is also due partly to the possibly temporary rise in incomes from wool, but partly also to the normal increase in national income which comes from a growing population and from smaller increases in other produce prices. Now, how is it proposed to spend that £167 million? This is how the money will go— Interest, repayment, and management charges on £ the public debt . . . . . . .. 23,491,000 Defence . . . . . . . . .. 16,582,000 Stabilization subsidies .. .. .. 8,091,000 Maintenance of works, buildings, plant, &c. .. 10,979,000 Administration expenses, including agriculture, immigration, rehabilitation, police, forestry, civil aviation, &c. .. .. .. 29,580,000 Social services— Payments from Social Security £ Fund .. .. . . 49,068,000 Other social service costs, (education, health, war pensions, hospital subsidies, &c.) .. .. 28,454,000 77,522,000 Provision for supplementary estimates and contingencies .. . . .. .. 1,545,000 £167,790,000 Now let us consider some of the main headings under which all this money is being expended. Outstanding among these is social services, which is set down at £77,522,000, and which amount could justifiably be- increased by some part of the capital cost of buildings and other such works. In New Zealand, as in other countries, we have been spending an increasing proportion of our national income through our social services. Over the last ten years the proportion so spent has risen from about 9 per cent, to 16 per cent, in 1949-50. Similarly, the proportion of general taxation expended on social services has risen from one-third to over one-half. The trend to increased expenditure on social services has been universal, and in New Zealand it is the greatest single cause of high levels of taxation to-day. What needs stressing is that neither social

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