PUBLIC WORKS STATEMENT

Hokitika Guardian, 3 October 1930, Page 5

PUBLIC WORKS STATEMENT

(BY THE HON. W. B. TAVERNER, MINISTER OF PUBLIC WORKS./

(Per favour of Government)

WELLINGTON, October 3

The Hen. W. B. Taverner (Minister of Public Works) presented the Public Works Statement to the House to-day. Air Speaker,—-Having taken over the portfolio of Public Works only .a tew weeks before the opening of the session it was not possible for me to make visits of inspection covering the extensive activities of the Department. Tlie session has emphasized features in our public finance and in the social condition of a large section of our people, which' must be taken into consideration in framing a statement for presentation to the House. Perhaps tlie most important from tlie point of view of a programme of expenditure on public works are : (1) The fact that a Select Committee has been appointed to inquire into and consider the position respecting railways under construction;,and.• (2) The fact that unemployment as revealed by the statistics of registation has increased rather than decreased.

The first factor is important in that it introduces an element of. suspense in detailing items relating to expenditure on railway-construction.: This Statement is necessarily ■ prepared in regard to the position as I view it and the finance made available by the Minister of Finance for the year’s programme of works. The second factor, however, it may otherwise be regarded, must weigh will all honourable members in balancing the pros and eons of one of the most difficult situations that has confronted Parliament since the end of the" war. It is for the. moment our most embarrassing problem, ns it is reported to he in most civilized countries, and one that vitally concerns the Public Works Department, the largest employer of manual labour in the Dominion. I shall have occasion to revert- to one or other or these factors in subsequent paragraphs.

The general position and certain aspects of policy dictated bv our present circumstances may be briefly reviewed. Honourable members will perceive from a perusal .of tabulations embodied in other parts of this document that public works expenditure has increased. During the last financial year the total expenditure reached £7,781,000. Included in this Statement is a most interesting, diagram showing, in the form of a graph, the annual expenditure on public works since 1872 up to the ehd of last financial year, and also the annual expenditure per head of population for that period. It will be seen from this that, apart from the period of unusual activity during Sir Julius Vogel’s rail-way-building policy when was a very small population in New Zealand, the expenditure from 1882’ to 1920 —a period of thirty-eight years—has varied round about £2 per head of population. Since that date it has increased, and in the two years immediately following 1920 it reached £5 10s.. and since then has averaged nearly £5. I suggest that a study of the particulars set forth in the graph under mention should he a valuable aid in assisting honourable members to consider the economics of the present position in regard to publicworks expenditure. The necessity of paying due regard to the econmie aspect of the various worsk proposed is most necessary, and the ability of those work's to produce an adequate return or to assist in increasing production must he carefully reviewed. A continued programme of expenditure rtf borrowed money on services that are not likely to prove productive will probably in the end result in a serious condition in the public finances of the Domnion.. It is not desirable that the additions to our national debt should become entirely the burden of the taxpayer for annual charges of interest and sinking fund, but insofar as public works are un-

productive such annual charges will have that effect. In respect to external debt, where the interest- goes out of the country, it is essential that for the expenditure of moneys borrowed abroad, the Dominion shotiicl show such increased development and productive capacity for the creation of additional taxable wealth that the interest payments will not be found burdensome, although they may require to be met partly out of taxation. It is for this reason that- the economic aspect of prospective- railway extension must be seriously considered .

.The statement tabled by the Hon. the Prime Minister, 'which, on the motion of the Hon. the Acting Prime Minister, lias been referred to the special Committee, gives the estimated cost of railways under construction, including cost to the end of June last, anil the estimated total annual loss thereon, ajs follows:- £ Estimated total expenditure. when completed Estimated total annual loss 727,533

] leave out of consideration individual fines referred to in that Statement, but must draw attention to the fact that heavy standing charges,represented principally by interest, will be borne iby the Consolidated "Kiln'd until, ).Such lime as the . various sections of lirie are handed over to the "Working Railways Department. • It is not necessary to stress the fact that the Working Railways are finding it increasingly difficult to caradditional burdens. I desire to state the urgent necessity that exists for a complete reVftluaiti(ui..-.of-' thb. lines under construction in- regard, inter alia, to community fot increased settlement, inert fi/pd-V production, and those services to; the public which are not easy' to : assess-' in terms of money. It must be ad-’ mitted that while certain factors in the problein are definitely' assessable there are others of a tangible " character that may be grouped under the heading of services ancl public conveniences which 'in prosperous times do not impress the public mind, but are. serious items in the . balancesheet during periods ;of depression. I am convinced ;that such' an investigation should;’be'-our; first duty, -and that upon t-he conclusions reached, ,a programme of - railway constructionmust be largely controlled. " In regard to the. high cost of many of the lines' at present under construction it should -., be i remembered that, as in the case of roads, thelines that presented no great-.. engi-i nosring difficulties- wore;', built years, ago, while those remaining’ are' forthe’most'part through difficult country and have to be constructed at an enormously increased co§t, and the modern standard' is much higher. As illustrative of this point, it can - be mentioned that the main line across the Canterbury -Plains, and also other lines in similar country, were constructed years ago at as low a figure as £3,800 per .mile; The lowest- estimated cost of lines under construction is £26,000 per mile, and on eome. of These linos it, is costing up . t 0 E 3 000 per mile -to provide housing accommodation for the. workmen. a While no one would desire to turn to the standard of aceommoda ion and conditions which *n tfiose days, it will he seep that when the Department is. Jaced ~witb =an annual expenditure exceeding £200,000 for the purpose of housing its workmen, it has an item of increased cost which materially adds to the financial burden. This aspect of the problem. could with benefit receive the attention of the Select Committee of the House recently set un. In making the above statement I am not unmindful of the important part played by the Department’s railway activities in regard to unemployment, ancl I wish to state that at the present moment there are 3,848 men bo occupied, and that the amount dismissed in wages during the financial year ended 31st March, 1930, was £750000, to which;, of course, .must be add-,, ed the cost of materials; the-overhead charges, consisting of supervision, interest, cost and depreciation of. plant, and, other items, which increased the total annual disbursement by a further £700,000. . , f remarked above the value, from the employment standpoint, of the works under consideration. Taken in conjunction with road-construction and : relief works, the second factor emphasized in my opening remarks may he developed more fully. The statistical position is as follows: —

NUMBER OF MEN EMPLOYED ON PUBLIC WORKS ON 20th SEPTEMBER, 1930. Railway construction (charged to Railway Construction Vote under control of Minister of Public Works 3,848 Railway construction (Railways Improvement Authorisation Account ' 435 Roads:— . ’ ' Settlement Roads 1,534 Main Highways 2,714 Hydro-electric works ;.... 1,447 Irrigation 109 Wnihou and Ohinemuri Rivers improvement 67' Buildings .638 General 229 Relief workers 4,939 Public Works Department total 15,960 State Forest Service total 1,089 "Total 17,049 Tt is obvious that any curtailment that Parliament, may find it/necessary to impose under any one of these items will throw men out of work and add to the already considerable number of the unemployed. (To be Continued.)