UNEMPLOYMENT

Dominion, Volume 21, Issue 130, 1 March 1928, Page 11

UNEMPLOYMENT

SUGGESTED REMEDIES ANALYSED FINANCE MINISTER’S VIEWS TARIFF NO REMEDY i 4 Dominion Special Service. Dunedin, February 29. Suggested remedies lor unemployment were analysed by the Minister of Finance (rton. W. D. Stewart) in the course oi his public address here to*nigln. 'rhe Minister expressed the conviction that high tariff was no remedy, and, while agreeing with the principle that reduced taxation would stimulate industry and provide enterprise for unemployment, he pointed out that reduction in taxation did not produce immediate results—and the problem Of unemployment was immediate and urgent. “Unemployment has beeu particularly acute during the last two winters, and has even persisted through the summer months, notwithstanding the far-reach-ing efforts of the Government and the local bodies to cope with it,” said tfie Minister. “Among other steps taken by the Government to absorb the unemployed were, firstly, to practically suspend its immigration policy in order that an influx of immigrants should not be competing in a depressed labour market; secondly, to maintain and extend its public works and road policy so as to absorb as maiiy men as pos-. sible; thirdly, to authorise by legislation local bodies to raise loans for unemployment; and, fourthly, to subsidise moneys expended by local bodies in order to assist them in coping with the problem. Cost Out of Revenue. “The Dominion is at present employing far more men on public works than our normal programme should require, and, in my view, it is impossible to maintain the present high figure for any length of time without creating further difficulties. About ten years ago we were employing on the public works about 3000 men, this number has gradually risen year by year until last year we employed, at the peak, over 12,000. This number is abnormally large. It is freil known that unemployment relief works are not economic and do not yield full value for the money spent. Because of this fact we have tried as far as possible to meet the cost of unemployment out of revenue rather than out of loan money. But it must be remembered that unemployment is a still more serious problem in Australia, and if the New Zealand Government agrees to provide employment for all who are unemployed at the present rate of wages it is only a question of time before we will have a large influx of. unemployed from Australia seeking work in New Zealand. It is also quite clear that the local bodies cannot go on raising large loans each year to cope with unemployment. Loans and Interest Bill. “It is easy to say that the Government have plenty of railway, irrigation, and drainage works and afforestation schemes that need development, and therefore that the Government can absorb all the unemployed by pushing onVwith these schemes. It is true that as the unemployed have to be maintained, in any case, they may as well be employed in useful work. But these great public works involve great public loans. Public loans involve a large and growing interest bill. That interest bill must be met by the taxpayer. The Government is trustee for the taxpayer to see that he gets value for the money spent. It is the" experience of all Governments that so long as relief works are provided to an unlimited extent it is a matter of extreme difficulty to get the unemployed to seek private employment. There are other remedies frequently suggested: First, that the Government should carry out a large policy of closer land settlement. That is a sound policy in normal times, but at the present time our main effort is directed towards enabling the men who are at present on the land to stay there.

"Another remedy that is frequently suggested is that we should afford much higher protection to secondary industries by. means of a high tariff. But in my view a high tariff is no remedy for unemployment as can be seen at the present time in Australia and America, where unemployment is far more rampant than in New Zealand. Other critics sav that if the Government reduced taxation this would stimulate industry and provide enterprise . for unemployment With this principle I agree, but reduction in taxation does not produce immediate results and the problem of unemployment is immediate and urgent. Moreover, unemployment relief should be paid for as far as possible out of revenue, and if the Government is to cope with unemployment and pav for it out of revenue, it is difficult at the same time .to give away revenue by reduction in taxation. ' If Wages Too Attractive. "Critics continually demand that the Government should evolve some complete scheme which will at all times absorb all who want work. They sav the present methods are haphazard and piecemeal and insufficient. But our experience and the experience of all other countries shows that unless relief works are kept down to a minimum, and the wages kept at a standard less attractive than normal wanes in private employment men leave private work to come on public works and their numbers tend to grow and become permanent. Those who say a change of Gov. ernment will solve the problem have to explain why unemployment is far more chronic and on a much larger scale under the Labour Governments in Australia than under the Reform Government in New Zealand.”