INSURANCE OF WORKERS

Ashburton Guardian, Volume 71, Issue 37, 23 November 1950, Page 4

INSURANCE OF WORKERS

BILL TO END STATE MONOPOLY SECOND READING DERATE BEGUN (P.A.) .WELLINGTON, Nov. 22. The Bill provided for the return of workers’ compensation insurance to private competition, and the Government believed that by its taking this action all parties, particularly the workers, would benefit, said the Minister of Labour (Mr W. Sullivan) in the House of Representatives this afternoon, moving the second reading of the Workers’ Compensation Amendment Bill. The debate on the second reading was unfinished when the House rose at midnight. Mr Sullivan said that the Labour Government, by making a State monopoly of workers’ insurance, had deprived about 30 insurance companies dealing with that ciass of business. Every precaution, he said, was included in the Bill to ensure that the workers’ interests would be fully protected. The Bill increased the maximum weekly compensation payable from £6 .to £6 10s, and provided additional compensation amounting to 30s a week for an injured worker requiring constant personal attention where he was not being maintained in a hospital. The Bill completed another National Party election undertaking, said the Minister. The Acting-Leader of the Opposition (the Rt. Hon. ,W. Nash): No matter what happens to the country? Mr Sullivan: The country is considerably bettter off.

The Minister added that the State monopoly had lasted 18 months, and no one could say that the job had been better done than under private enterprise. Mr Sullivan said that the task of minimising industrial accidents must be tackled by all parties concerned, not only because accidents themselves were distressingly frequent, but because fewer accidents would mean lower insurance tariffs. “We must declare war on factory accidents,” he said, “both because of the suffering that takes place and because of the enormous loss that takes place.” The Minister said he believed the accident rate could be greatly reduced in the next year or two. Mr Sullivan emphasised that although the Bill, which would come into effect on April 1, 1951, provided for the fixing of maximum premiums, there would be nothing to prevent lower rates being charged. The increased rates of compensation for which the Bill provided would apply in cases where claims arising from previous accidents had not been fully settled when the Bill became opera-, tive. Other Election Promises * Mr Sullivan said that it was only fair to say that there had been increases and reductions in premium rates since the State had had a monopoly of the business. Mr Nash: More decreases than increases. Mr Sullivan said that although there had been increases and decreases, in industries where there might be three or four classifications the State monopoly had forced employers to insure at the highest rate. The restoration of the business to private enterprise would result in a cheaper and better service. Mr A. McLagan (Opposition, Riccarton) said that all the Minister had said about the Bill was that it gave full, freedom to competitive private enterprise. No reasons were given as to how the Bill would benefit employers or employees. The insurance companies were the last of the three parties involved who were entitled to benefit by the Bill. The State had given at least as good a service while it had the monopoly of workers’ compensation insurance as private enterprise, and had lowered the cost of the insurance to the community . Measured by the charges for service it gave, the State had returned 70 per cent, of the premiums as benefits to the injured workers, compared with 50 per cent, returned by the private companies. Working expenses had been kept lower, and premiums kept down. In every instance where the National Government had restored a freedom the people had had to pay for it.

Premium Changes 'Mr McLagan said that it would have been better if the Government, instead of fulfilling its promise to private enterprise as expressed in this Bill, had fulfilled some of its nobler election promises—its promises to keep down the cost of living, to aid social security beneficiaries, to provide real wage increases, and to reduce taxation. Mr W. A. Sheat (Government, Patea) said that if there was any superior virtue in State enterprise, it could best be shown by the State competing with private enterprise.

Mr Nash said that it was not right that a profit should be made out of workers’ compensation insurance. In the first nine months of the State monopoly 14s of every £1 collected in premiums had been paid out to the victims of accidents, the highest payment ever recorded. Private enterprise did not have a case in the workers’ compensation insurance field. No private company would enter that field unless it could make a profit, and he considered that the board as proposed in the Bill would fix the premiums so as to enable the private companies to make a profit. There would be no competition among the private companies, continued Mr Nash, and if the proposals contained in the Bill were approved, higher premiums would have to be paid. Four other members—Messrs J. Rae (Government, Roskill), J. Mathison (Opposition, Avon), J. R. Hanan (Government, Invercargill), and P. Kerins (Opposition, Waimarino)—spoke before Mr Sullivan began his reply to the debate shortly before the adjournment.