EXPENSES GO UP

Taranaki Central Press, Volume IV, Issue 351, 4 February 1937, Page 3

EXPENSES GO UP

UNEMPLOYMENT COSTS

‘Back-handed Economy,’ Say Chambers of Commerce.

Contrary to the Ministerial undertaking that there would be a reduction in the cost of unemployment administration, there will be an appreciable increase in the cost, according to the, Government’s own es!Tmates of expenditure for the current financial year (says a statement by the Associated Chambers of Commerce of New Zealand). The' Minister of Labour, • when speaking to the second reading of the Employment Promotion Bill in the House last session, said "he had always contended that the Unemployment Board, as a separate organisation to deal with unemployment, was quite unnecessary because there was in existence a Department of Labour well equipped with machinery to deal with the whole situation.” “Done More Economically,r Tn another part of his speech the Minister said: “We believe that by bringing, the unemployment relief administration under the direct control of the Minister of Labour, and by amalgamating the functions of the Department of Labour and the Unemployment . Department under one head and as one united body, the work can be done much more economically ante better than it has been done in the past.”

Prior to the introduction of the Bill, the Minister stated in Christchurch last February that "when the Government had made its financial arrangements the Unemployment Fund would be relieved of a good deal of the present expenditure.” At the end of the financial year 1935-36 there were 864 persons employed in unemployment administration under the Unemployment Fund vote. The cost of administration for that year was £200,844. These were the figures that the Minister meant were to be so much improved upon. Larger Than Before. The current estimates wipe out (in an accountancy sense) the 864 persons employed under the old Unemployment vote. On the other hand, the estimates make provision for an additional 868 employees under the newlyyjreated Labour Department sub-division "employment promotion,” and an additional 21 employees under the newly-created Land and Income Department sub-division "employment taxation”—a total nett increase of 25 persons over the Unemployment Board staff. Actually, the increase in the total staffs of the Labour Department and the Land and Income Tax Department is greater by another additional 60 persons —listed, however, as being for other than unemployment administration purposes.

These extraordinary staff additions' cannot be reconciled with the ' statements of the Minister that prior to the change the Labour Department was already “well, equipped with machinery to deal with the whole situation,” the the Unemployment Board had “really been duplicating the work of the Commissioner of Taxes,” and that, by amalgamation into one body, the work “could be done much more efficiently and economically than it had been done in the past.”

Whether unemployment administration to-day is more efficient is not necessarily brought into . question here, but greater efficiency at greater cpst—estimated at a net £262,000 this financial year as compared with £200,844 spent last year—is not what was promised. The fact that the Unemployment Fund has provided £60,000 toward this year’s expenses from its own resources does' not alter

the figures as regards the cost oil ad ministration. Furthermore, the Unemployment Fund should now be considerably relieved, since Parliament, in accordance with the forecast by the Minister. introduced invalid

'pensions (chargeable on the Consolidated Fund) for persons permanently incapacitated for employment, while the Public Works Department has now absorbed 18,878 men as compared. with 11,715 in February of last year. Increased Imposts. The movement in these administration expenses is* of some concern to the taxpayers. Firstly, unemployment taxation this year is expected to yield £4,210,000 —an increase of £290,000 over last financial year’s revenue. Then, a change which was.' made under the latest Budget, and which is not generally realised by taxpayers, is that whereas unemployment administration expenses have been deducted in the past from the taxation income of the Unemployment Fund, now the Fund is left intact, and the cost of administration is drawn from the taxpayers through the Consolidated Fund as an additional impost. This sum, totalling a net £202,000, amounts to increased taxation for unemployment (or employment promotion i purposes. Taxpayers will be more generally aware that, for income-tax purposes, no exemption is now allowed, for unemployment taxes paid. This is« not merely double taxation, it is taxation on income never actually received. The extra revenue yield resulting, while not swelling the funds directly ear-marked for unemployment purposes., but rather swelling the yield from income tax, nevertheless makes unemployment taxes press harder proportionately on the resources of the taxpayer.

Therefore the taxpayers, burdened with their extra impositions, will want to know with added reason.

why unemployment administration expenses, instead of being substantially reduced, have been substantially increased—by 30 per cent., in fact, which is a back-handed economy.