STATE HOUSING

Evening Star, Issue 23683, 17 September 1940, Page 3

STATE HOUSING

PRINCIPLES CRITICISED WILL PROMOTE FINANCIAL EXHAUSTION Answering a corresponding firm which defends the principle of Government housing in war time, a leader in the • Mercantile Gazette ’ for September 4 reiterates that home building on the part of the State should be suspended at least for the duration of the l war. The country cannot, it maintains, stand up to both peace and war time expenditure without becoming financially exhausted. “ We hope,” says the article, “ that our correspondents will not find themselves in the same position as some of our subscribers who resented our earlier criticism of the Government’s legislation, the effect of which has now forced ihem out of business. Wo have no trade axe to grind. We are endeavouring to look at tho matter from the point of view of the economies of the country, and we maintain that State interference has not been helpful to the country. But it is not our intention to deal with that phase of the Subject at present. We desire to emphasise what we said previously: that house-building by tho State should be postponed for the present. The estimates of expenditure for tho current year run to nearly £100,000,000, of which nearly £60,000,000 is for expenditure on peace-time activities, including houses. The population of New Zealand is about 1,640,000, and the whole of this money must be taken out of the pockets of the people. We will probably be told that housing expenditure is to be financed by loans, which is true enough. ' We ask where is the loan money to come from ? We under-, stand that the State Department known ns the Reserve Bank is to provide the loan money. Where does this State department obtain the money? If it is loan money then it means that interest must he paid and the people must be taxed to provide that money. Tho handful of people in this country are already more heavily taxed than they should be, and the taxation is forcing down the standard of living. Notwithstanding all the publicity and propaganda, the advent of the State in the house-building business has not met the demand for houses. It has, however, raised the costs of building to a fictitious level, and has thus helped to check private enterprise. Rent restrictions have been the main cause of the disturbance in home - building economics. yet private enterprise has accomplished more than the State. Of course a time of reckoning is coming. In our view the Government has found itself compelled to carry on with housing, otherwise the inflation in the country would collapse and create difficulties even more serious than were experienced during the depression.