The Dominion. TUESDAY, MARCH 28, 1939. A FRESH FINANCIAL EMBARRASSMENT

Dominion, Volume 32, Issue 156, 28 March 1939, Page 8

The Dominion. TUESDAY, MARCH 28, 1939. A FRESH FINANCIAL EMBARRASSMENT

4 No domestic problem confronting New Zealand today is more = important or urgent than that of finding productive employment for all able-bodied men. The problem is important, and vitally so, because a country of much fewer than 2,000,000 inhabitants-a country striving to meet the’heavy cost of experiments in social legislation—can ill-attord to go on supporting an army of men on relief work. It is urgent, because in less than a week’s time the money which has been used to keep these thousands of men in various temporary forms of employment wi no longer be available for that purpose. The Employment Promotion Fund will be no more. . . ~ . • ■ This does not mean that the taxpayer will be relieved ot his special Bd.-in-the-£ contribution to the State purse. On the contrary, the levy is to be increased by one-third, making, in all, one shilling in t e x, oi 5 per cent, of his earnings. But the whole of the revenue thus game (with the exception of £1,500,000 for sustenance payments), is to, e diverted after April Ito the Social Security Fund. So much attention has been focused on this new fund, so much controversy has been roused by the scheme for which the money is to be utilized, that the taxpayer is only now beginning to study the effect of the change m relation to his responsibility for the relief of unemployment. In a statement made last week, the Minister of Labour said that the diversion of taxation from employment promotion to social secuiity could be described as “marking the end of the temporary phase in the promotion of employment and the building up of the purchasing povvei of the people.” By this he meant that the time had come for the Dominion’s industries to provide employment for those who, hithei to, have been supported by the State. This is a commendable theory, and the public will applaud it. But can the change-over be made as neatly as that? Will manufacturers be able all at once—or in a month oi two, oi over an even longer reasonable period—to provide jobs by the thousand, simply because they are supported by a campaign of propaganda for New Zealand-made goods, in addition to having the advantage of a policy of import restriction ? At the moment there is nothing to show that these questions can be answered affirmatively—nothing to reassure the taxpayer that the necessity for continuing to provide money for unemployment relief will vanish. Indeed, the signs point the other way, for there has been no substantial beginning of a great migration from public works to industry in spite of the fact that the Employment Promotion Fund is within a few days of extinction. Mr. Webb's own words express the existing doubt—a doubt that must surely be shared by Cabinet—for, in his statement, he makes particular reference to the future subsidization of relief work. He says: With the switching of the special revenues, hitherto earmarked for employment promotion, to the Social Security Fund, any funds required for subsidizing employment will have to be provided from general taxation, and it is clear that the amount that can be made available during next financial year will be much less than was available for the current year. Scheme 13, he adds, must be closed down as quickly as other employment can be found, but, where necessary, the Labour Department will discuss with local bodies and others arrangements for a temporary continuation of the scheme beyond March 31. What will this “temporary continuation” amopnt to? As far as can be gathered from .the figures made available, there are anything from 16,000 to 20,000 men to be provided for—possibly more. A few thousand of these men after April 1 will qualify as pensioners. What of the rest? A month ago the Government announced a proposal to place 8000 of them.in industry within six weeks, but there has been no indication that even this fraction of the total has been provided for. Ihe process of building up manufactures so as to create employment is necessarily an exceedingly slow one. Import restrictions are not operating entirely to the benefit of local .industry, and, even in cases where they are, the employers are finding that'the extent of their gain does not warrant the employment of large numbers of unskilled workers at high rates of pay. Everything, indeed, points to another breakdown of the financial hopes of the Government. The millions collected year by year to relieve unemployment will, on April 1, be .diverted to the Social Security scheme; and fresh funds will have to be collected from the public to provide for the workless. This unpleasant possibility was brushed aside by Ministers as of little or no importance when the financing of the Social Security scheme was under discussion in Parliament last year. Now it has to be faced as a fresh and additional burden to be placed on the community.