The Dominion. WEDNESDAY, MARCH 15, 1939. IS SOCIAL SECURITY SECURE?

Dominion, Volume 32, Issue 145, 15 March 1939, Page 8

The Dominion. WEDNESDAY, MARCH 15, 1939. IS SOCIAL SECURITY SECURE?

There is ample food for reflection in the statement published yesterday by the Associated Chambers of Commerce setting out the trend of our national economy. Whether it will receive the extensive perusal and thought it deserves is another matter. Speaking generally, the average citizen appears to be disinclined to think seriously about the country’s affairs. It is only when the effects of Government policy touch him personally and adversely that he begins to ask questions. A large number of people are still basking in the delusion that the Government can make good its undertaking to insulate the country from the effects of an economic depression, but there are many signs appearing indicative of its financial difficulties, such as the emergency regulations for the control of sterling and the licensing of imports and exports, which are causing misgivings among those who take the trouble to think. In the Chambers of Commerce survey, attention is drawn to the disproportionate distribution of the income from our national production. The total value of this in 1937-38 was £135,600,000, a diop of £500,000 from the previous year. In spite of this drop, wages and salaries absorbed £12,700,000 more than the previous year, whiletaxation, including local body taxation, increased from £37,790,000 to £43,392,000. In other words, while production dropped .37, wages and salaries increased by 9 per cent., and taxation by 15 pei cent. This left the nation’s private capital resources for productive industry £13,200,000 less than was available the previous year. For the current financial year the result promises to be far more disturbing: National production values (states the Chambers of Commerce survey) have received a serious setback through a decline in piimary production, both in quantity and in value; exports for the first 10 months'of 1938-39 were valued at £44,000,000. which is a drop of £8,000,000, or 15 per cent., over the corresponding period of 1937-38. Notwithstanding, the Government budgeted for still more taxation than in 1937-38, while wage-rates as at December 31 lust had been increased since the end of 1937-38 by 3.1 per cent, over all industrial groups combined. This drift is so far from the Government’s optimistic anticipations when planning its Social Security schemes as to confirm the very grave doubts voiced at the time concerning its soundness. Both the Prime Minister and the Minister of Finance during the proceedings of the Parliamentary Committee which heard evidence on the schemes, stressed their belief in a steady expansion of production values. Pressed on this point, Mr. Maddex, the British actuary who reported on the schemes, declined to commit himself, remarking that this was a question for an economist, not an actuary. Later, in Parliament, on the second reading of the Social Security Bill, Mr. Nash declared that “on the evidence of the natural progress made during the last few years, and, in addition, on the evidence of the incomes actually recorded, the income of this country in 1939-40 will be from £174,000,000 to £175,000,000. ... I have not any doubt,” he added, “that having regard to the estimated national income of £174,000,000 it is inevitable that the ordinary revenue of the country will go up to an extent sufficient to obviate any increase in taxation above the present rate.” The Finance Minister’s optimistic reliance on an expanding national income was a grave error of judgment. . Things are not working out as he anticipated. Not only has the national income been seriously affected by the drop in the quantity and value of our exportable products, but, as is pointed out in the Chambers of Commerce survey, the resources of capital for productive industry are being diminished. These warning signs cannot be ignored. Because the Government does not appear to take them seriously is no reason why the average citizen should not begin to think about them and inquire more closely than he apparently does into the drift of the country’s affairs. It is high time to take notice.