LOWER SALARIES.

Taranaki Daily News, 1 July 1922, Page 5

LOWER SALARIES.

SECOND “CUT” TO LESS THAN LAST ONE. AMENDMENT LOST IN HOUSE. The Prime Minister stated in the House last night that there must be a second “cut” in the salaries of civil servants, but in view of the cost of living figures, he thought it would have to be less than the cut made in January. A motion by the Leader of the Labor Party, that there should be restitution for the first “cut” and that there should be no further reduction of salaries, lead to a brisk debate. The amendment was defeated by 38 votes to 19. By Telegraph.—Press Association. Wellington, Last Night. An Imprest Supply Bill, making provision to the extent of £3,020,100 for the payment of salaries, wages and contingencies, was introduced in the House this afternoon by Governor-General’s message. On a motion to go into committee of supply. Mr. H. E. Holland (Leader of the Labor Party) moved: “That as the latest figures reveal there has been no fall in the cost of living as between March, 1920. and March, 1922, the Government was not warranted in reducing the salaries of public servants, and therefore this House recommends that restitution should be made at least to the lower-paid employees; and this House further recommends that it should be immediately announced that there will be no further reductions in public servants’ salaries in July.” He said he had no intention to labor the matter, but it was evident with the cost of living what it was that many public servants would find the greatest difficulty to live. The only reliable way in which the actual cost of living could be ascertained was by a weekly budget, of the workers. No railway man could live on less than £5 weekly and railwaymen lived at a lower rental than other workers, because of the excellent airangement the department makes in this connection. The Railway Department, was now showing a -surplus and he contended tliis surplus was made at the expense of railway workers.

“A GLASS TAX.” Mr. Holland said the general financial position of the Dominion generally was such as did not warrant the first cut in public service salaries and therefore restitution ought to be made to those from whom the money was taken- If money was urgently needed it should be taken by taxation, so that every one would pay according to his ability to pay, and not bv a class tax such as a salarv cut was. Those receiving higher salaries were not being called upon to suffer in the same ratio as smaller salaried men. He quoted figures to support this contention. In consequence of‘this state of things every department was seething with discontent, because men were asking why they should be asked to -work for salaries on which it was impossible to keep their wives and families. And after the Government had done that they prevented these men doinw in a perfectly constitutional way something which would strengthen their position industrially. This attack which was being made on public service salaries was most unfairly being carried on outside public servants, yet in no part of New Zealand had the cost of living fallen in anything like the same ratio as wages had fallen. Everyone should think seriously of the position which had been created in New Zealand and he was confident that if the Premier would only give his supporters a free hand his amendment would be carried.

CRY OF DISTRESS. The amendment was seconded by Mr. D. G. Sullivan (Avon), who said he had been greatly impressed by the case put up by the Canterbury public servants, who recently met Canterbury members to discuss this subject with them. Many of these cases were so hard that quite a , number who previously supported the, Government in their economy campaign had now changed their opinions. He quoted a case of especial hardship, where a public servant who indulged in no extravagances found it impossible to live on the salary he was receiving. A public servant receiving £320 per annum, after paying rent and superannuation tax, was’left with £2 5s weekly to provide for his family on a basis of the 1914 prices, and if this was the position after the first cut, how much worse were things going to be if the Government persisted in its policy of reducing salaries- He asked Government if they seriously proposed to provoke and ' increase distress. He complained of ' undue delay shown in setting up a board to adjust the anomalies in salary reductions. Mr. Massey, in the course ot his reply, contradicted Mr. Holland’s contention that the Railway Department was making a surplus. As a matter of fact there was still a deficit in the running of the public railways. He denied that, men with higher salaries had not been called upon io make sacrifices on the same ratio as the smaller salaried men. That was only half the truth; the fact was these men never received any bonus and there was an understanding that AVhen the cost of living fell the bonus must be taken away. He stoutly denied that there had been any reduction in salaries | at a ii_ on iy the bonus had been taken away. „ ‘ BIG DROP IN REVENUE.

Mr- Holland had suggested higher taxation upon big financial institutions, and his reply to that was that nothing was •so much needed as a reduction in taxa--tion, because the burden put on the people as a result of the war was greater than they could bear; it was stagnating industry and labor. He did not wish to take the bonus away from anyone and he hoped he never would have to do so again. He never had such an unpleasant experience in his life and he did not think it could have been done in any different way. Certainly he did not think it practicable to arrange a basis of reduction for single men and another for married men.

Coming to the financial position, he said he had received a statement from the Secretary to the Treasury showing that expenditure for 1921-22 had increased over that of 1913-14 by £16,641,000. Tliis was due to the war and to conditions arising out of the war. which no Government could control. He gave details and showed that during the war expenditure had increased £13,371,000 per annum. That was not all, for contemporaneously with this increase in expenditure there had been a drop in public revenue. Matters were improving,

but unfortunately the improvement had not reached the Treasury. As a matter of fact this was going to be his worst year. He enumerated decreases in various branches of the revenue collecting departments for the yearing ending May 31 last which totalled £6,604,848, on to which he had been informed there would be a drop of over £lO, 000,000 in the income tax.

The position therefore was serious and required the greatest care and caution. He believed we would get through and if we were not able to show a surplus—he would not promise that—would be able to show a very creditable ' record. Referring to borrowing opera- | tions, he said that practically all money i .'borrowed during the war cost seven per cent., when interest and sinking fund were taken into consideration- We were getting over that position now, but there was a substantial increase in expenditure. Then there were scale increases in salaries which Ite did not think he could very well stop at present. The Forestry Department, for instance, was costing about £75,000. Mr. T. M. Wilford (Leader of the Opposition) : A long way more than that. Mr. Massey said he would not care to. exaggerate and lie mentioned it only to show how impossible it was to do all the retrenchment needed in a few months—it must -be spread over a year or so. Mr- L. M. Isitt (Christchurch North): Are we going to get any reparation from Germany? Mr. Massey: I doubt it very much; they seem to have lost sight of reparation on the other side of the world. THE ONLY REMEDY. Coming back to the bonus question, Mr. Massey reiterated that it was perfectly well understood by all parties that as the cost of living fell the bonu,s must disappear. He did not know how they could carry on without a reduction in expenditure and he did not know how they could have done otherwise than reduce the bonuses. It had been -suggested to him that they should seize the sinking funds and use them to pay salaries, but he did not like that course, which practically amounted to breaking faith and would do our credit harm in London. It had also been suggested they should take the accumulated surpluses, but that would simply amount to paying salaries out of capital, which would be absurd. Nor did he favor reducing the personnel of the public service too drastically, because that meant turning out ten thousand people from employment. At the same time they were not going to keep -people in the service for whom there was nothing to do.

There were three alternatives: (1) ; Reduce the public service; (2) increase] taxation; or (3) make a cut in salaries.] He looked at the position from every point of view and he saw no alternative , but to make the cut. If the lower salaries were left out of the cut then he could not get the money required. It had been said Government departrfients were seething with discontent, but he considered they treated their public service particularly well, and it was his desire to act in a manner that was fair, right and reasonable. His opinion was there must be a second cut, but in view of the cost of living figures he thought it would have to be less than the cut made in January last. Mr. J. McCombs (Lyttelton) declared the Premier’s statement was in several respects misleading, referring specially to the reported reduction in the cost of living. The Minister should be guided in this respect by the finding of the Judge of the Arbitration Court and not the finding of a special commission. The Judge had already made a pronouncement on the matter to the effect that on all groups the cost of living had actually increased as between March, 1920, and March, 1922, by over 60 per cent, above prewar rates- This made the position very different from that suggested by the Premier’s statement that the cost of living based on the food groups had fallen to 45 per cent, above the pre-war level. He submitted that the cut in public service salaries was not justified, as the Government made a concession in the matter of income tax and customs duties amounting to twice as much as the salary cut.

VOICES OF PROTEST. Mr. E. J. Howard (Christchurch South) appealed for a fair standard of living for the man lower down. He said die cut in salaries was not justified. Mr. F. N. Bartram (Grey Lynn) urged it Was unfair that the brunt of the reductions had to be borne by the lower paid employees. Mr. M. J. Savage (Auckland West) also supported the amendment, declaring the salary reduction was a class tax. All incomes should suffer equally if any reduction was made. Mr. C. E, Statham (Dunedin Central) denied that the Labor Party had a monopoly of the solicitude for the public service. He voted for the second reading of the Public Expenditure Adjustment Bill because he recognised some readjustment was necessary, but in committee he opposed the reduction of smaller salaries. He opposed the retrospective clauses of the Bill and because he did not favor the Bill as it emerged from committee he voted against the third reading. If asked what lie would have done to avoid a reduction of salaries his reply was he would not have made remissions to land and income tax payers. The Arbitration Court had found that 5s weekly was a proper reduction to meet the reduced cost of living, vet civil servants had 6s weekly taken from them by the Government cut. : He would support Mr. Holland’s amendment because he wished to enter a protest against the second cut which the Government proposed to make. Mr. Munro (Dunedin North) said the Dunedin North election "«s fought entirely on the issue oi t‘»« reduction of public servants’ salaries- and he was on the floor .of the Hous* articulate expression to Dunedin -•‘>rths protest against this course. Our need for in-T-reased revenue was due co the \s;ar, but there were many people in the Dominion who did not believe vne. owners of ' aggregations of land au <l money were bearing a fair share m that war burden. The people of New Zealand from end to end were demanding that these people should be more heavily taxed, not that salaries should be reduced. Mr. Wilford said he regretted Mr. Holland had not seen fit to adhere to his amendment as first placed before the House (clause 3 and 4 being deleted), because if it remained intact he would have .been glad to have the opportunity of voting against the proposal that the post and telegraph servants should affiliate with the Alliance of Labor He thought that affiliation would do the .post and telegraph service no good, but as he was not able to vote against it perhaps his public statement on the floor of the House would suffice. As on the previous occasion he would oppose a reduction of the lower paid men, because he objected to public servants being led to the slaughter. The Premier had not advanced a single valid argument in

favor of the proposed second cut and he (Mr. Wilford) would have liked to have some information regarding the Economies Commission. Had their recommendations been given effect to? The Prime Minister had that report and the House had not seen it. Mr. Massey: And it never will; it is confidential. MR. WILFORD OPPOSES CUT. Mr. Wilford, continuing, said that before the House voted on this amendment members ought to have had an opportunity of perusing the report on the cost of living, Which, in accordance with the law the Judge of the Arbitration Court had submitted to the Government. The Prime Minister had this report in his possession and no one could see it. That was surely a reflection on pur system of Government. There was no justification for the second cut, which was going to affect men with small salaries much more than men with larger salaries. He believed everyone- -should do his best to effect economies and he was not going to appose the Government just for the sake of opposing them, but he did not approve of this cut and would oppose it, especially in face of the expensive commissions which were travelling all over the country to find out things which there was no money to carry out if they recommended them. He would support the amendment protesting against the second cut. Mr. W. A. Veitch said he would vote fm; Mr. Holland’s amendment. He previously opposed the reduction of civil servants’ salaries and he would oppose a reduction now. Mr. T. K. Sidey (Dunedin South) blamed the Premier for want of candor in stating the position with regard to the report to "the Judge of the Arbitration Court on the cost of living. He had given two different replies to questions concerning the report, and the House did not know what was in that report. Mr. Massey explained that he now had the report in the form as finally passed by the Judge of the Court, but he would not place the report before the House un- : til he had an opportunity of discussing | it with Cabinet, and he could not do that | before the Bill was passed. Mr. Wilford said that was hardly fair to the House. I Mr. Massey said that it was perfectly fair, and if the bon. gentleman did not like j it he could move a vote of no confidence on the Address-in-Reply. THE DIVISION LIST. At 10.45 p.m. the debate closed and a division was called for, when the amend- ' nient was defeated by 38 votes to 19. : For the amendment (19) —Atmore, Sav- ! age, Bartram, Seddon, ‘ Edie, Sidey, Fraser, j Smith, S. G., Holland, Statham, Horn, Veitch, Howard, Wilford, Jennings, McCombs, Munro, Parry, Poland.

Against the amendment (38) —Anderson, K-chener, Bollard, Burnett, Campbell, Coates, Craigie, Dickson, J. M. C., Dickson, J. S., Dixon, Field, Guthrie, Hamilton, J. R., Harris, Herries, Hockly, Hunter, Luke, McLeod, McNicol, Mackenzie, Malcolm, Mander, Massey, Nash, Newman, E., Nosworthy, Parr, Pomare, Potter, Reed, Rhodes, Hon., Rhodes, T. W., Stewart, Sykes, Uru, Williams, Young. Pairs—For amendment: Sullivan and Witty; McCallum and Thacker; Wright and Mitchell. Against amendment: Lee and Jones, A. Hamilton and Hudson; Glenn and Hawken. During the remaining stages of the Bill’s passage members asked a large number of questions concerning the unemployed. The Premier laid it down emphatically that the Government did not propose to subsidise local bodies, but the Government would do its part. The Bill was passed without amendment. In reply to Mr. Wilford, Mr. Massey said the debate on the Address-in-Reply would begin at 7.30 p.m. on Tuesday. The House rose at 11.55 p.m. till 2.30 p.m. on Tuesday.