FUTURE OF FUND

Auckland Star, Volume LXVI, Issue 239, 9 October 1935, Page 10

FUTURE OF FUND

SUPERANNUATION. STATE OBLIGATIONS. LABOUR INTERROGATIONS. MR. COATES IN DEFENCE. (By Telegraph.—Parliamentary Reporter.) WELLINGTON, Tuesday. "It is common knowledge that the funds are not everything they might be as far as their condition goes," saul tho Leader of the Opposition, MrSavage, in the House of Representatives to-day -when discussing the report of tho Government Railway Superannuation Fund Board. The Minister of Finance, ho said, had alluded in his Financial Statement to tho subject and stated that it was not possible for tho Government to deal with the question this year, but would do so next year. "I am wondering if the Minister is ■m optimist," said Mr. Savage. "He may not bo hero next year."

Mr. Coat.es: If I do not come back next year I will not have anything to worry about. Mr. Savage: But those who are here may have to worry about it because they won't be able to find out where the Minister left off.

Mr. Coates: That's not my concern. Mr. Savage suggested that the House should he told something about the position now. He was thinking whether it was not possible if the Government did come back that it might legislate itself out of its obligations in respect to the Superannuation Act. He would like an assurance from the Minister that that would not happen.

Mr. Coates: The safe tiling seems to me that I should come back next year.

Mr. Savage said he did not want the law to be altered in the direction of adversely affecting superannuitants when Parliament reassembled. There had been a Royal Commission and he could not say that its report was one that made members feel optimistic •about the position of the fund. The contributors had done their share of the paying, but the Government had failed in that direction. Some day the Government might take a short cut and legislate itself out of its responsibility under the existing law. Confiscation Suggested. Mr. .T. A. Lee (Labour, Grey Lynn) said that if the actions of the Government in the future were to be judged by its actions in"" the past confiscation and repudiation would come at some stage. The finding of the Royal Commission was largely endorsed by the Government and the House was led to believe that its recommendations would be embodied in a Government bill. While it was difficult to discover at the moment the Government's intentions he did not think the Government had a future and its intentions did not matter much. Why the silence if there were no evil intent? Surely the Minister had a policy. When the Prime Minister returned from Great Britain lie brought with him the tombstone of the Coalition and appropriately enough it was stone from the Waterloo Bridge.

Mr. 11. T. Armstrong (Labour, Christchurch East) said that the Minister of Finance by stating last year that the question would be dealt with the following year had in effect made a promise to deal with the matter this year.

Mr. Coates: Too many instructions from the Opposition.

Mr. Armstrong: If the Government intends doing anything this session nothing more will be said.

Mr. Coates: Ah; that is the question. Mr. Armstrong Baid the Royal Commission said the fund was not actuarially sound and the Minister had promised to pay into the fund the amount that the Government had contracted to pay. Mr. Coates: How much is that? Mr. Armstrong: Some millions. He went on to say that the reason why the fund was unsound was the failure of the Government to pay in the amount representing its share of the bargain. , Mr. Coates: Are you in favour of the retention of superannuation funds 1 Old Age Pensions. Mr. Armstrong: Yes; and we will go a lot further than the Government and will bring all the workers under a scheme. Ho went on to say that many men bad ben superannuated ten or twelve years before their time and were drawing just sufficient to keep them from receiving the old age pension. Mr. A. Harris (Government, Waitemata) referred to cases of extreme hardship that had been caused by tho retirement of men with less than 35 years' service. The retiring allowances of these men had been based on an actuarial calculation and in soma cases were a third less than what they would have been if placed on one-sixtieth of the income for each year of service. That matter had been before the House on many occasions and petitions had been reported to the Government for favourable consideration, but nothing had been done. The number of railway superannuitants concerned was only 135 and the amount required to put them on the basis of one-sixtieth of their incomes for each year of service was £(>IOO. Mr. Coates said he was interested to notice the basis upon which the Leader of the Opposition had asked him to give information. The Leader of the Opposition was followed by the member for Grey Lynn, who used the words "interfere," "smash" and grab," and then said the Government would not be there r.ext •year. If that were so it surely did not matter about the question. A Labour member: Some will get a shock. Mr. Coatea: And yet a great number believe that the Government will be firmly established again next year. He added that he was amused when lie heard the Leader of the Opposition asking if the Government would give an undertaking and then say it didn't matter as the Government would not be there next year. Government's Obligation. So far as the civil servants were concerned, eaicl the Minister, it had been made clear that the obligation on the Government would be carried out. Tho only point at issue was whether it was proper and wise to retain the superannuation funds. Last year he had stated in the Budget that ho would bring down legislation this year, but that had not been possible for a number of reasons. One was the necessity for] a valuation of incomes. In hid opinion it was a moot point whether the superannuation legislation should bo retained in its present form, provided the Government guaranteed that its obligations ■would bo met.

There was the question of economy in tho administration of the funds, the Minister continued. There were a number of superannuitants and members of tho Civil Service who believed that it was an advantage to retain the funds in their present form, but he doubted whether that was a sound deduction. If the State said it would take on the responsibility that, he considered, was the best guarantee. It might be necessary to alter the basis of superannuation in the future, but that would not affect any present member of the Civil Service. It would not be unfair if the superannuation funds were continued on their present basis to say to future civil servants that they would not bo 011 the same basis, said Mr. Coates, so long as each party knew what the contract was. On Same Basis. Regarding the question raised by Mr. Harris the Minister said that it was an immediate problem and representations had already been made to the Government with a, view to placing those men who had been retired during the period of retrenchment on the same basis as men who had completed more than 3;1 years' service. To apply the principle to the whole of the service would cost probably £9000 or £10,000. While one's sympathy was naturally with those who had suffered 011 account of the exigencies of the slump, the problem was a little more difficult than it seemed. As Minister of Finance he had to keep in mind tho fact that he had little liberty with spare cash at present. However, that was one of the instances in which tho requests made to him had not met with a distinct -< No."

Mr. Harris: I appreciate that

Mr. Coates said that there were dozens of other cases of simiiar claims. He knew that the Railways Board had said it was willing to find the money to adjust the superannuation of the railway men who were affected, but he had to say that as the Railways Department called on the Consolidated Fund to make up its losses it was not such a simple matter as it seemed.

"However," added the Minister, "I'm not making a song and dance about that." The matter, he added, was before the Government at the present time and he would make a statement dealing with the position at a later date. Civil Servants' Fears. Mr. H. G. R. Mason (Labour, Auckland Suburbs) said ho agreed that a superannuation fund was not necessary, but the civil servants feared that their pensions would be determined by the amount of the fund. Mr. Coates: There isn't a single civil servant who believes what the honourable member is saying. Mr. Mason said the Minister had added absurdity to a position already obscure. He should say that the funds were merely an artificial convention. Mr. Coates: The civil servants themselves have a very strong inclination that the funds should remain.

Mr. Mason said that if that was so the funds should be put on a proper basis, but the Minister had not made the position clear. Further discussion was prevented by the adjournment of the House as a mark of respect to the late Hon. W. Stevenson, M.L.C.