NO REAL INCREASE

Dominion, Volume 21, Issue 130, 1 March 1928, Page 13

NO REAL INCREASE

COST OF GOVERNMENT REPLY TO EXTRAVAGANCE CHARGE NET CHARGES TO TAXPAYER Dominion Special Service. Dunedin, February 29. “Is the cost of Government in New Zealand extravagant?” This question was comprehensively dealt with in a public address to-night by the Minister of Finance (Hon. W. D. Stewart), who claimed that, apart from the direct burdens arising out of the war, there had been practically no real increase in the total per capita charge on the taxpayer since 1913-14.

Replying to some recently-quoted figures relative to the High Commissioner’s Office, the Minister said that Sir Robert Stout had pointed out that salaries of clerks and messengers rose from £6259 in 1914 to £12,573 in 19191920, and to £25,287 in 1927. Those figures certainly showed a large increase, said the Minister, but the vast amount of work arising out of the war did not cease when the war ceased. When the military staffs were demobilised the High Commissioner’s Office had heavy extra burdens imposed upon it in qonnection with war graves, soldiers’ pensions and gratuities, and a multiplicity of inquiries on matters arising out of the war. In addition to that, the work of the League of Nations had imposed new duties on the office, and the development of the New Zealand navy involved a great deal of detail work concerninc pay and allotment of crews, etc. Revival in immigration had also led to increases in staff: organised publicity in Britain was practically a new post-war activity-; development of imperial affairs provided a great deal of additional work; the trade and produce section had to be remodelled; and the Stores Board, which was set up to systematise the purchases of all Government Departments involved further staff to manage the London end. To sum up. the increase of £12.000 In salaries of clerks and messengers between 191.9 and 1927 was made up as follows: —Immigration section, £5000; trade and produce, £3500; publicity, £700; finance, £1200; general, £l6OO. Total, £12,000. Work of Treasury Doubled. Mr. Stewart said that much the same consideration applied to the Treasury as to the High Commissioner’s Office. During recent years a great deal of extra work had been involved in establishing closer control over expenditure and systematising the trading departments’ accounts on a business basis, but in addition to that the large increase in the Public Debt owing to the war and Public Works expenditure which was postponed during the war had more than doubled the work of the Loan Department in that office. In fact, the local domiciling of a large proportion of the debt practically established a new branch for that business. Sir Robert Stout's query as to whether Treasury work had doubled could be answered in the affirmative. Depreciation of the Pound. “There is one general consideration which applies to all Departments, and which must be taken into account when comparisons of pre-war and post-war expenditure are made, namely, the depreciation in the value of the £l,” said the Minister. “The 1926-27 figures must be reduced by at least one-third for comparative purposes, so that to compare the pre-war cost of clerks and messengers in the High Commissioner’s office £6269 in 19.1.4 with £25,287 in 1927, the latter figure should be reduced to about £16,800. So, in the Treasury appropriations for salaries the figure of £12,37'1 in 1914-15 should not be compared with £26,789 in 1927-28, because if we allow for the fall in the value of money the latter figure should read £17,860. Allowance for Expansion. “Expenditure on education has also been criticised. But it is unfair to regard increasing cost without allowing for increasing expansion, particularly in secondary and university education, quite apart from the normal increase in primary education. Important functions have also been undertaken which were practically non-existent twenty years ago, such as technical education, child welfare, dental and medical clinics, and physical culture. All these developments may be more liberal and generous than the Dominion can afford, but they have been insistently demanded by the electors, and it appears as if the Department furnishes economically the service required by the people.” No Increase in Charge Per Head. Reference to the 1926 Budget, added the Minister, would show that apart from the direct burdens arising out of the war there had practically been no real increase in the total per capita charge on the taxpayer since 1913-14, even though the expenditure oti pensions, health and hospitals, and education had increased considerably. If the annual • appropriations for 1914-15 were examined with those for 1926-27, and from each were deducted the working expenses of both the Railways and the Post Office, as these were more than covered by their earnings and were not a charge on the taxpayer as such, and if, in addition to that, the appropriations for 1926-27 were reduced by onethird to allow for the fall in the value of money, and certain alterations in the accounting system were adjusted, it would be found that the expenditure per head of mean population was £3 ss. 6d. in 1914-15, as against £3 7s. 3d. in 1926-27, which was a very slight increase over such a long period.