WAR COSTS

Otago Daily Times, Issue 24419, 3 October 1940, Page 8

WAR COSTS

EXPENDITURE ITEMS MINISTER GIVES DETAILS ESTIMATE OF £40,000,000 FUNDS FOR CURRENT PRODUCTION (From Our Parliamentary Reporter) WELLINGTON, Oct. 2. Some details of New Zealand's war expenditure during the current financial year were given by the Minister of Finance, Mr W. Nash, during a general debate on war expenses in the House of Representatives to-night. The Minister expressed the emphatic opinion that every possible effort should be made to meet expenses out of current income so that there should be as little drain on the United Kingdom as possible, and added that the cost to New Zealand for the present financial year would probably be about £4Q,000,000. The sum spent on the war up to March 31 of this year, Mr Nash said, was just over £7,000,000, and the Budget presented to the House some months ago had estimated an expenditure of £37,500,000 during the current year, with about £19,000,000 being spent in the United Kingdom and some £17,000,000 in New Zealand. It was proposed to raise a little over £14.000,000 by taxation in New Zealand and about £3,500,000 by loan. Arrangements had been made to have the overseas war costs met by the United Kingdom Government on a loan basis at a small rate of interest. Production to Bear Cost " We do not want to make too great a charge on the funds of the United Kingdom,” the Minister added, “ so we must try not only to raise the money to be spent here, but also to raise some here to relieve the drain on the British Government. The real costs of the war must come from current production and every endeavour must be made to provide as much as possible from taxation in preference to borrowing.” The total cost of the war from the beginning of the financial year to August 31 last had been £12,241.000, the Minister said, but, in addition, there were imprests outstanding of more than £2,000,000. Pay and allowances accounted for £3,782,000, stores £1,617,000, land and buildings £3.821,000, accommodation, victualling and clothing £1,928,000, transport £366.000, miscellaneous items, £67l,ooo, and the civil expenditure which really applied to the war £56.000. Nearly £7,000,000 from Taxation Mr Nash said that out of the money provided for war purposes to August 31 the sum of £4,450.000 had come from taxation and £2,288,000 had been transferred from the previous year’s vote, making a total of £6,738,000 from taxation. Miscellaneous items, mostly recoverable, totalled £357,000, donations £58,000, interest-free loans £2,428,000. and other borrowings £3.754.000. , „ So far, Mr Nash said, the only account received from the United Kingdom had been one for £1,000,000, but the actual sum to be met might advance by leaps and bounds during the next month or two, as there might be an account of £5.000.000 or £10,000,000 to arm our men overseas. Equipment of Forces Detailing some of the items of equipment for the forces, the Minister said that boots had cost £254.000. clothing £1,348 000. and crockery £46,000 out of a total of £2,128,839 to date. The cost of food alone to August 31 was £512.000. All these quantities had to be subtracted from the amount of goods available for the civilian population, and in that way there must be less goods available for civilian use during the war vears. That had not been realised quite enough up to the present. _ Mr C. A. Wilkinson (Independent. Egmont): You mean the Government hasn’t realised it. “ The Government has realised it for a lone time,” Mr Nash replied, “ but some members of the Opposition cannot have realised it as they have been supporting an agitation to bring more goods in.” , Mr S. G. Holland (Opposition, Christchurch North); Why not produce more? Mr Nash: The factories ifl New Zea--land have increased their production by £3,500,000 during the past 12 months, and in spite of what may be said by members of the Opposition I can see no evidence of inflation.

Tlie Estimated Total Members could work out the current cost of the war to a certain extent by multiplying every New Zealander on service overseas by 7|, Mr Nash said. That would be the cost in pounds per week, but, in addition, equipment would probably cost £7OO to £IOOO for each man. He added that it might be necessary to buy considerable quantities of equipment for the defence of New Zealand, and the expenditure to the end cf the financial year was likely to be about £40,000,000. “You cannot send 20.000 men overseas and have 30,000 to 40.000 others in camp and expect the same quantity of goods to go into production.” Mr Nasti continued. “If we cannot make it up we must go without. Mr Holland: Or work a little longer. The Minister: If all the members who suggested others working harder would work a little harder themselves — A voice: What about the 40-hour week? . The Minister replied that the Minister of Labour. Mr P. C. Webb, was keen on increasing production, and already extra hours were being worked wherever this would help production. Effect of Labour Loss “We are faced with a loss of the labour of 20.000 men and some 40.000 more are in camn' Mr Nash continued. “Then' there is the cost of the material they are using. We in this country can get ample food and I believe ample clothing and fairly decent houses, but we will have to work hard to maintain the standards we have. “ There is no question that we must all share the sacrifices,” he said. “For some, it will mean physical difficulty and for others difficult adjustments of commitments. I would not compare these with the air raids on London. New Zealand has not yet realised what it has to do and what it ought to do.” Mr Nash discussed briefly the dangers of inflation, and said he would be failing if that method of paying for the war were adopted. This did not mean, however, that it was possible to take the entire cost of the war out of existing production. A Note of Optimism “As a nation we will pay some day,” the Minister added. “We are trying to take an honest and fair way and asking the taxpayer to pay his contribution, and to the extent that we cannot pay out of taxation we are trying to borrow on terms that are reasonable and fair.” Mr Nash said he thought it almost certain that things might be a little better in 12 months’ time, but the man who worried about interest except for maintaining his home while the fate of the Empire was being decided had lost the picture of what the British Commonwealth was facing to-day.