SALARY GUT

Taranaki Daily News, 20 January 1922, Page 5

SALARY GUT

DEBATE IN THE HOUSE.; REASONS FOR PROPOSALS. PREMIER OUTLINES POSITION. OTHER PARTIES OPPOSE BILL. The debate on the Government’s proposals for reductions in the salaries of civil servants opened in the House last night. The Premier outlined the financial position of the Dominion, stressing the necessity for economy. The Bill was opposed by the Leader of the Opposition and the Leader of the Labor Party, and the debate was still in progress at 2 a.m. when the office closed. By Telegraph.—Press Association. Wellington, Last Night. In the House to-night the Prime Minister moved the second reading of the Public Expenditure Adjustment Bill. He said there were many people in the country to whom the Bill was unwelcome, but the position must be faced. We were in the midst of the aftermath of war. The prices of produce had dropped and as a result our income had fallen and expenditure must be reduced. The Premier gave figures detailing the increased sum paid to the public service amounting to £4,500,000 per aunjlm. To • date the Government had paid in this manner about £10,000,000. Mr. Massey repeated that the position must be faced. Our produce was not realising much more than the cost of production. The railways were being run at a loss, amounting to £4OOO daily, but he believed that as a result of the reductions now proposed the railways would do better and that fares and freights could be lowered. Regarding the prices of primary products butter and beef were to-day realising less than half the prices obtainable a year or eighteen months ago. Wool prices had lately improved slightly, but even now he was assured the price was be-, low the cost of production. WITHDRAWING ONE BONUS. Regarding the percentage of the reductions proposed some complaint had been made that highly paid officers were not called upon to give up as much as the lower paid, but he pointed out that the higher paid men had not received the cost of living increases and they had to pay income tax. He wanted it made plain that the reduction proposal only affected part of the cost of Jiving increase-- -the second increase of £5O granted to cover the added cost of living. The first increase of £45 and the scale increases of salaries were not to be touched. Mr. Massey referred to the agreements reached during war time to cover the cost of living. The railwaymen s agreement was to run. till the midjl , of 1921. The Government, however, had not interfered with the increase. Then he quoted from interviews with the railwaymen's representatives, at which the latter’s representatives expressed readiness to accept a reduction if the cost of living fell commensurately. It had been the intention from the beginning of the grant of the increases that if the cost of living came down the bonuses would be reviewed. ECONOMIES EFFECTED. . Economies effected in departmental expenditure to October 12, 1921, amounted to £2,441,884. Reductions now being made or proposed this year were: Defence Department, £240,000. Reductions under the recommendations of the economy commission, £300,000. _ Saving to be effected under the Bill .£BOO,OOO. Total annual saving, £4,042,000 yearly. . .. Reductions in public service expenditure as the result of the public accounts committee’s scrutiny amounted to £1,235,000.

! The Premier said anxious times were still ahead, as the revenue was unlikely to show anv improvement' for some time. Income tax, for instance, last vear produced £8,000,000, while this year little more than £6,000,000 would be collected, and next year probably not more than £4,000,000 would come from this source. Last year 2719 public servants were retrenched. The cost of living increases on salaries were made on the basis of increases m the food group prices and it was only reasonable that a reduction should he similarly based. The cost of living increase was now less than 52 per cent, above that of 1914. so he thought they could not complain if a reduction was made. GOVERNOR WILL TAKE LESS. Referring to exemptions, Mr. Massey said the Governor-General had informed him that he saw he was exempt * from reduction and His Excellency had said he would be pleased to forward a cheque for £5OO to the Treasury. The rentier said lie understood that the Ju ges (who were always regarded as persons who should not be subject to ordinary influences) liad oft’ered to agree to reductions in their salaries, while a prominent officer of the Defence Department who was down for £lOO reduction, had intimated his willingness to accept £2OO less. This spirit animated many. of the public service officials. T ““ ch ' in- on the High Commissioners Office, Mr. Massey said the expense of running this was very great and he could not see his way to touch it at preset! ’ It was proposed to take £190,000 m three cuts from the £300,000 increase that was granted for teachers’ salaries, leaving a permanent increase ot 000. Public servants’ superannuation and widows’ pensions would not Be touched. With regard to the lower paid branches of the public service tne general principle was that the basic wave of £165. which with the first cost, of'living bonus of £45 made for the present at any rate tile basic figuie ot £2lO. below which no deduction would be made. OPPOSITION TO BILL. Mr. T. M. Wilford (Leader of the Opposition) said ho recognised that re financial condition of the countrv wa such that a reduction in expenditure was absolutely necessary, but what he complained of was the methods proposed to bring this about. These methmls would press hardly on lower paid people. There should be graduation ot sacrifice; the higher paid men should re called upon to give up more 1 han mu proposed. The man with .J? 3 .„ could bitter jari with £2oo than

the man with £250 could part with £lO. Mr. Wilford contended that the report of the 'Economy Commission should have been presented, to Parliament before the latter was called upon to make a* decision on an important matter such as dealt with in this Bill.

In arriving at the proper proportion of the reduction it was not right ;to consider only the cost of living based on food prices. They should also consider rent, lighting, fuel and clothing. Cost of living data that did not include these latter items were fallacious. Mr. Wilford contended that the cost of living had not fallen sufficiently to warrant the reductions proposed and also that those affected should have an opportunity of being heard during the committee stage, so that some of the anomalies in the Bill might be removed. Regarding temporary hands, Mr. Wilford said that unfortunately there were many of these in the public service. They complained they only received a bonus of £35 a year and not £45 as did the rest of the service, and they wanted to know how that £35 was going to be treated. They also complained that holidays had not been received. These men’s position should be put on a more equitable footing's compared with permanents. POSITION OF SCHOOL TEACHERS. Referring to school teachers, Mr. Wilford said the position of these public servants up to a year or two ago was disgraceful in the matter of pay and status. Primary and secondary school teachers had appealed to him to try to prevent the proposed cut in teachers’ salaries, contending that such reductions were false economy, and pointing out that other countries more hardly hit by the depression than New Zealand had not attempted to economise in i education expenditure. The Hon. E. P. Lee said there was a general consensus of opinion that . some reduction in public expenditure ; was urgently necessary. Regarding Mr. ! Wilford’s complaint that the economy j committee's report was not produced, ; Mr. Lee said it was a confidential docu- ' raent for the information of the Minis- • ter for Finance to enable him to prei pare the measures for economy in adI ministration. These, however, could not reduce expenditure sufficiently, so that i some reduction in salaries had to be ' considered. Mr. Lee defended the in- : creases in salaries as appearing on the ; Estimates on the ground that they ; were only ordinary scale increases, and ■it was one of the basic principles of ' the Government scheme not to interfere • with the ordinary salaries or their sta- ; tutory increases. To the argument that the larger salaries should be more heav- : ily reduced, he replied that the recipii ents of these salaries received no cost •of living bonus, and at the same time I paid heavily by way of income tax. ! They therefore had been bearing a fair :share of the burden. The main fact whs that the Premier i had to make a reduction of £BOO,OOO. :If the smaller salaries were exempt ' from the proposed cut, then it would be impossible to make that saving, because of £9,27-6,937 paid in salaries by the .State, £7,700.000 was paid in salaries below £4OO, so that the saving necessary could not possibly be made out of salaries above £4OO. The reduction in the Education Department was not on -salaries, but was a bulk reduction, and it was for the. Minister to distribute that reduction amongst the teachers. If that was reasonably ’he did not anticipate much dissatisfaction. Those who opposed tFe Government scheme must show: (1) That the reduction of £BOO,OOO is not required: (2) if required, that it can be obtained from some other source than salaries. If it is not 1o come out of salaries, then they must show whence it can come. It could not come out of higher salaries without confiscation. He submitted the proposals of the Government were fair and reasonable. LABOR LEADER’S VIEIWS. Mr. IT. E. Holland (Leader of the Labor Party) said what the last speaker was the fact that the increases in'salaries during the war were not nearly sufficient to meet the in- > creased cost of food, clothing, ere. Tne Government Statistician should consider all phases of the cost of living in making up his estimates. The workers would suffer seriously under the Bill, which represented a tearing up of a number of scraps of paper. He contended that the proposed decreases should not take effect till April. It was well known that people always hoped to make up some of their Christmas expenditure during the two month# following the holiday season, but this year, instead of being able to do that, they would find themselves facing a reduction in salaries. The Labor Party took up the position that no reductions at all were necessary, but if reductions must be made, they should come from those best able to bear them.

Mr. Holland quoted the Budget, which showed an accumulated surplus of £23,500,000; in the last financial year alone the surplus was £6,132,000. If this was a bona fide surplus where was the excuse for wanting to reduce public servants’ salaries? The Government had, before it brought down these reduction proposals, granted taxation rebates to lahdowners . amounting to £170,000, and to income tax payers £500.000 There was no justification for these rebates, which did not benefit the small man to any appreciable extent. There should be no exemption from liability for reductions, which if made should'apply to the Governor-Gen-eral, judges, and all high officials in the public service. In the matter of Minis' tors and members of Parliament, the reduction should be on a more equitable HOUSE LEFT SITTING. As an alternative to the Government proposals, the Labor Party contended that the necessary money should be got. not by retrenchment, but by increased taxation. There was plenty of, margin in land values, private wealth, and big incomes to obtain money in that way. °The economic effect of the Government’s proposals would be disastrous, because the purchasing power of the people was being seriously reduced, which would have a reflex action on many businesses. Further, it was .sthe first step towards a reduction in private wages. The Labor .Party did not. agree with the attitude of the Liberal Party on this question, and emphatically they would not vote for the second reading of the Bill

'Fhe debate was continued by Mr. A. S Malcolm (Clutha) who gave general support to the proposals, and by Mr. 11. McCallum (Wairau). and Mr. A. Harris (Waitemata), who thought the adjustment was unscientific.

Mr. C. E. Statham (Dunedin Central) claimed that the present necessities of the country were entirely due to the uns.tatesmanlike policy of the Government during the war. Sir John Luke (Wellington North) said he would support the Government, as they necessarily knew more of the position than private members. (Left sitUig.J.