The Online Library of Liberty

A project of Liberty Fund, Inc.

• Preface
• Translator's Note
• Where and Why Public Ownership Has Failed
• Book I: Public and Private Trading Operations
• Chapter I: Two Precepts
• Chapter II: The Three Mainsprings of Human Action
• Chapter III: Determining Motives of Private As Against Public Enterprises
• Chapter IV: Government and Municipal Trading Operations
• Book II: Financial Results of Government and Municipal Ownership
• Chapter I: Bookkeeping In State and Municipal Trading Enterprises
• Chapter II: The Belgian State Railroads
• Chapter III: Prussian Railroads
• Chapter IV: State Railways of Austria and Hungary
• Chapter V: Italian Railways
• Chapter VII: Railways of New Zealand
• Chapter VIII: Government Railroads In France
• Chapter IX: Public Vs. Private Operation
• Chapter X: The Holy Cities of Municipal Operation
• Chapter XI: Operation of Gas and Electricity In the United Kingdom
• Chapter XII: Tramways In Great Britain
• Chapter XIII: Housing of the Working Classes and Public Ownership In Great Britain
• Chapter XIV: Housing of the Working Classes On the Continent
• Chapter XV: Government Control of Food Supplies
• Chapter XVI: Victims of Government Ownership
• Chapter XVII: Charges, Debts and Credit
• Chapter XVIII: Fictitious Profits
• Chapter XIX: Fiscal Monopolies
• Chapter XX: The Alcohol Monopoly In Switzerland and Russia
• Chapter XXI: Financial Disorder
• Chapter XXII: The Purchase Price
• Chapter XXIII: Delusions of Profit and the Life Insurance Monopoly In Italy
• Chapter XXIV: The Fiscal Mines of the Saar District
• Chapter XXV: Public Versus Private Enterprise
• Book III: Administrative Results
• Chapter I: Administrative Results
• Chapter II: The Safety of Travelers Upon State and Private Railway Lines
• Chapter III: Disorders, Delays and Errors
• Chapter IV: Official Conservatism
• Chapter V: Labor
• Chapter VI: The Consumer
• Chapter VII: Programs of Organization and Regulation
• Book IV: Political and Social Consequences of Public Operation
• Chapter I: Socialist Programs and the Facts
• Chapter II: Bluff
• Chapter III: Results of Experience
• Chapter IV: The State a Dishonest Man
• Chapter V: Corruption
• Chapter VI: Nationalization of Public Utilities and the Foundation of Great Fortunes
• Chapter VII: Disintegrating Character of Public Operation
• Appendix %u201ca%u201d: Alcoholism In Russia
• Appendix %u201cb%u201d: the Financial Year In Australia
• Appendix %u201cc%u201d: the Shortcomings of the Telephone In England

APPENDIX “B”

THE FINANCIAL YEAR IN AUSTRALIA

Effects ofLabourRule.
(FROM OUR CORRESPONDENT)

• Sydney,

Oct. 21.

Three and a half months have elapsed since the close of the past financial year, and it is only now that it can definitely be said how the figures for the year were shaped. Even now the New South Wales Budget for the current year has not been forthcoming, which is a serious inconvenience, because New South Wales has built up a heavy deficit, and the position needs righting. But it would be a blow to the Labour Party now in office to impose fresh taxation prior to the State elections just ahead, and so the question has been shelved. The Commonwealth Budget was delivered early in October, and five states have put forward their estimates—two within the past week.

State revenues expanded at a slower rate last year, as can be gathered from the following statement, while expenditures increased without check in two of the states:

The estimates for 1913-14 are composed of five Budget statements, and, in the case of New South Wales, allow for an increase of £400,000 in taxation, which the Premier foreshadowed, and an average growth in other revenues. Now, it will be noticed that in 1911–12 the combined revenues increased £3,913,000, but in 1912–13 the increase was only £1,778,000, or not one-half that of the previous year. But the expenditures, which increased £3,649,000 in 1911–12, further increased £3,092,000 in 1912–13—hence the combined deficiency.

With regard to the estimates for 1913-14, it will be seen that an increase of close upon £3,000,000 is allowed for, including further taxation in New South Wales and West Australia. Whether it will be realized is the unsolved problem. Revenues have lost much of their elasticity just now.

GROWTH OF LABOUR EXPENDITURE

But these combined results tar all the States with the same brush, and that is altogether unfair. Four of the states are not under labour administration, while two (New South Wales and West Australia) are so. Separating the returns for last year into the two groups, we have the following:

The two labour-governed states secured £1,114,000 of the year's revenue expansion, while the remaining four gained only £664,000; but the latter group all lived within their incomes, while the two labour administrations lived much beyond them. Similar results were shown in the preceding year, only of a less pronounced character, and they are again apparent in the new financial year's estimates, and both these labour administrations have already imposed more taxation, and their programs include yet additional taxation in 1913–14.

Labour has been three years in office in New South Wales, and two years in West Australia. But a three years'comparison of the two groups is altogether remarkable:

The whole reason for the marked retrogression under labour finance has been in the striking growth of their expenditure, which relatively in the past three years has been twice as rapid under labour administration as under what Australians term Liberal administration. It is quite to be understood. Labour came into office on the votes of a class, and that class is master. It cannot be denied what it asks for, and in fact the legislative programs have to be submitted to the caucus at the Trades Halls and approved before they can be put forward.

When these administrations came into office—and the caucus into power—it was boasted that the burden of their schemes should be placed upon the shoulders able to bear it. But their expenditures have run away from their incomes all the same, and the burden has been spread, as the increased cost of living specially affects labour.

What is more, in the efforts to find money for state employees, which have multiplied greatly, loans have been called upon to supplement revenue freely. The railways and other public works are needed, but the effect of the increased loan expenditure on the volume of state employment has been marked all the same. However, the effect upon revenue has been beyond controversy. Happily, all six of the state governments are not under labour rule, and the commonwealth has recently made a change. The state election in New South Wales, just ahead, may do so likewise. But in the foregoing statements facts only have been dealt with, and facts are above the party cries current in Australia.

With respect to the revenue estimates for the current year, over £2,000,000 of the expected increases go to the two labour administrations and £1,000,000 to the remaining four states; but, then, the labor governments are augmenting taxation, and may not realize their estimates. However, that remains to be proved.

THE COMMONWEALTH AND THE STATES

Labour has also been three years in office in the Commonwealth, and the expenditure has been more than doubled—growing from £7,499,517 in 1909–10 to £15,779,483 in 1912–13. Much of the increase is for value received, including the fleet nucleus. But every department has grown enormously, like the post-office, which cost £3,231,198 in 1909–10 and £4,783,744 in 1912–13—an increase of 48 per cent., excluding construction. The expenditure of Australia (common-wealth and states), excluding all duplications, was last year £59,780,088, and the combined revenues £58,492,834, the net deficiency having been £1,287,254. The commonwealth accounts showed a surplus of £391,550, but that was because £494,397 of the expenditure was charged to the accumulations from previous years. That was legitimate, but the actual expenditure of the year is given in the above statement. The common-wealth expenditure in the current financial year is placed at £15,147,000, but that is after deducting £2,653,223 charged against the accumulations of previous years, wiping them out completely.

Australia has tried the effect of labour rule, and has paid the bill, apart from the deficits. This serves to show what the cost has been, and that cost may have some effect on the elections. That it has been a burdensome luxury is clear, while whether class legislation is the best of legislation is a matter which may be left to consideration. Class legislation never gives the results anticipated.—The Times (London), November 29,1913.