THE PUBLIC DEBT

Hokitika Guardian, 19 April 1930, Page 2

THE PUBLIC DEBT

IT’S GROWTH

FROM 1914 TO 1929

(Taxpayers’ Association.)

The magnitude of the public debt is sufficient in itself to keep the people of the Dominion thinking very seriously of their obligations. There is, however, no need to suggest, as some pessimists are doing, that these dbligations are seriously impairing; the credit of the country and prejudicing its standing in the world of fianace. Some of the critics, telling only half the story, never weary of reiterating the fact that on March 31. 1914, the gross debt of the Dominion stood at £99,730.427 (including £4,976,600 raised in March of that year for redemption purposes early in the succeeding financial year), and the further fact that oil March 31, 1929, stood at £264,191,983 (including £(3.379,106 raised in January, 1929, for expenditure in 1929-30), Curiously enough these tw’o financial years. 1914 and 1930, are the only years in which loans have been' held over in this fashion, and it is desirable their significance should be kept in mind. In 1914, the volume of public debt —£94,7s3.B27 —represented the following accumulated expenditure: Directly reproductive undertakings (railways, telegraphs, and so forth), £31,856 o < 4 ; investments (advances to settlers, workers, local bodies)' £30,3:52,131; indirectly productive (roads, bridges, immigration) £11.494.204; and unproductive (public buildings, Maori War. defence) £21,051,418. The expenditure under these headings, per cent, is expressed in the following figures:— per cent Indirectly productive ... ... 12.13 Investments ... 32.02 Reproductive expenditure ... 33.62 Unproductive ... 22.22 100.0

On March 31. 1929, the gross public debt was shown under somewhat different titles, by the following figures:— Productive works, £77,460.438; land settlement and forests, £24,338,729; investments £39,333,474; indirectly productive purposes, £25,005,501; and financially unproductive purposes, £92.668,736. The expenditure under these headings is classified as follows:

par cent Productive works 29.93 Land settlement and forests ... 9.40 Investments 15.20 Indirectly productive purposes 9.66 Financially unproductive ... 35.81 100,0

Of the unproductive expenditure of £92',668,736 no less than £70,881,270 is a heritage from the Great War. But for this lenormous drain upon the resources of the Dominion, the amount of unproductive debt in 1929 would have been less than 12 per cent, or, in proportion, little more than one half of the unproductive debt of 1914. New Zealand is not grudging the millions it contributed towards the conduct of the war; but it naturally resents the reiterated assertion that well on to one half of its borrowed money has been employed unorofitaiblv.

It has been admitted, however, that in other directions the growth of public expenditure within the Dominion has proceeded with disquieting rapidity. In 1914 the gross public debt, including the £4,970,600 for redemption purposes already mentioned, reached £99,730,427; in 1918, £150,840.055: in 1922, £219,054,385: in 1926, £238,855,478; and in 1929, including again, the amount of £5,379.105 anticipated for the succeeding year, £264,191,983. During the fifteen years that have elapsed since the beginning of the war the national debt has increased from £B7 10s 2d per head of population to £179 12s lOd per head, and the taxation from £5 5s 2d per head to £l2 4s 3d per head. In 1920 taxation stood at £l3 11s Id per head; in 1921 a.t £l7 14s

4tl and in 1922 at £l2 14s Bd, but sinco this last reduction, brought about largely by a representative deputation taken to iMr .Massey ibv the Taxpayers’ Federation, little progress lias been made towards lightening the ( people’s burdens. It has. been* suggested that a thorough overhaul ot the administrative branches of /the governing machine

might revive many opportunities of averting waste and extravagance. A Wanganui business man writing to tlie newspapers the other day expressed in a nutshell what is being said by the business men in this respect. “The alarming part of the position,” lie declared, “is the great increase in cost of -administration, and until the brake is put on the administrative officers by the Government, matters will go from lhad to worse. One reads in the Press of economy being forced on other countries. 'ln NowZeal and we read of increased expenditure. How long can it go on? This is a question for the politicians to answer. The facts arc plain enough. In 1915 the number of permanent am! temporary hands employed bv tilt Government was 41,217. In 1925 the number had swollen to 55,918. During the ten years the wages bill had swollen from £5,867,308 to £13,281.838. Tfhe increase per cent in the staffs between the two periods was 35.66 per cent and the increase in salaries 126.38 per cent. Unfortunately these figures are taken only every tenth year and the taxpayer will have to wait another half dozen for the next return.

Meanwhile a few* examples of the increases in staff and salaries between 1914 and 1929 cannot fail to be of general interest: — .

1914 1929 Department- Staff Sa la vies Staff Salaries Post and Telegraph .. 5375 £705,627 8.787 £1,650,537 Income. Tax 74. 14,815 170 . 39,823 Mental Hospitals 614 63,991 1,2:39 228,938 Public Health - ... ... 130 11,326 524 131,941 Agriculture' 406 87,9<8 628 202.899 Education ... - ••• 475 62, >1 7 720 182,262 Forestry ... .... ... 18 3,311 '146 . 43,3-3 Public Trust" 191 33,374 684 ' -188,600

These figures do not include temporary employees. . .; ; A bare recital of the, increased annual expenditure in the principal legislative departments between 1925 and- 1929 must conclude this somewhat discursive review:—

Legislative Department. £121,COO; Stamp Duties Department, £69,000; Native Department, £9,000; Cook Islands. Department, £67,000; Prisons Department, £29,000 ;' Police Department, £83.090; Pensions Department, £313,000, Internal Affairs Department, £264,000: Public Health' Department, £84,000; Defence and Naval Department, £1,202,090; Labour Department, £70,000: Education Department, £841,000; Prime Minister’s Department, £28,000; Mental Hospitals Department, £148,0C0. Total.' £3,748,000. The increased expenditure in nil Departments between 1914 and 1929 amounted to £l2 6s 6d per head of the total population.