§ With regard to the profitableness of the outlay, I should like to point out where the increased expenditure comes in apart 267 from armaments. The first is in the Post Office. Then the Post Office costs £3,000,000 a year. It is now responsible for £24,000,000 of our annual expenditure. That is an increase of £21,000,000, but, although the expenditure has increased eightfold, the profit has increased twelve-fold, and, apart from the great profit which is derived, the money has been spent upon an object which is not merely helpful, but essential to our trading community. It creates facilities which mean so much for the amenities of life, and, apart from that, it fructifies in a hundred ways in the trade and commerce and the industries of the country.
§ The other large increase is in education. The money then voted was £1,200,000, and it is now £19,200,000, an increase of £18,000,000. Then there was no money voted out of the local rates for education; now £16,600,000 is voted by the localities themselves. Then the nation was spending 8d. per head upon the education of its children, now the Imperial Grants alone come to 8s. 5d. per head, and the total of the Imperial and local Grants come to 15s. per head of the population. Although there may be much to criticise in the expenditure, although there may be extravagance in some directions and we might spend less in some ways, although I am perfectly certain we could profitably spend more in others, still on the whole, taking it through and through, this is an expenditure which fertilises and enriches. Therefore I do not think there is anything for us to apologise for in either of these two increases.
§ There are two items of increase of expenditure which do not even appear in the Budget of fifty years ago. The first is the Grant-in-Aid of local taxation. There were no Grants-in-Aid of local taxation then, but now they represent £11,000,000 of our national expenditure. This undoubtedly represents an enormous advance in civilisation. The other item is one which is put into a new class, and which has only been voted in the course of the last four years, the Vote for pensions, Labour Exchanges, health and unemployment insurance. This accounts for £20,000,000 of the expenditure. Take those four items together they represent an increase of £70,000,000 to the national expenditure which has occurred since 1861, but those are not an extravagance but a real economy—an economy of time, 268 strength, nerve, and brain. In its purpose, and substantially in its application, its represents a profitable reproductive work done in the nation. It undoubtedly increases the efficiency of the nation in every respect, and the business man who would unduly stint his outlay on repairing and renewing his machinery would be regarded as a very bad business man, and so would the Parliament which takes the same view of the nation. Take that expenditure of £70,000,000 upon these items, and deduct it out of the total of £195,000,000. That leaves £125,000,000 to compare with the expenditure of fifty years ago, an increase of £55,000,000. Out of that increase £46,000,000 is an increase in armaments alone. I do not think anyone will say that the remaining £9,000,000 is an excessive and extravagant figure when one regards the increase in population, the increase in the activities of the nation in every direction, the increase in the cost of collection which must necessarily follow. I think that £9,000,000 on the whole is a figure that is well within the comparison of the conditions of to-day with the conditions which existed in 1861.
§ There is another figure I should like to give to the Committee before I dispose of this branch of the inquiry. The deadweight debt then was £821,000,000—that is, £28 per head of the population. The deadweight debt to-day is £661,000,000, or £14 per head of the population. We were then reducing debt at the rate of £1,300,000 per year; we are now reducing deadweight debt at the rate of £12,000,000 a year. When you come to the question of the means of the nation to meet this increased expenditure the income which then passed under the review of the Income Tax Commissioners amounted to £312,000,000. Last year it was £1,107,000,000. One penny on the Income Tax then adjusted to modern conditions with regard to abatements yielded £875,000; a penny to-day produces nearly £3,000,000. So that, although £195,000,000 standing alone, without any explanation, is undoubtedly alarming, there is only one item alone which creates any profound disquiet, the bulk of the remaining increases representing expenditure from which we reap more than we sow, and out of which in the future I think the harvest will be one-hundredfold what it is to-day. I am not justifying great national expenditure; I am only pleading that the examination of it should be thoroughly well-informed and well-directed, and that more 269 mischief and disappointment should not be created.