THE SUPERANNUATION SCHEME

Press, Volume LXXIV, Issue 22371, 7 April 1938, Page 8

THE SUPERANNUATION SCHEME

X, TO THE EDITOR OF fUK PRESS. Sir,—The much vaunted universal national superannuation scheme has now been made public by the Prime Minister, and. judging by the articles and letters' already printed in “The Press,” does not seem to be meeting with a very favourable reception from the public. In my opinion it is altogether a mis-use of words to call it superannuation at all, for except in one respect it is exactly the same in ■principle as the existing old age pension scheme, which we have had for the last 40 or 50 years. As to its being universal—well, as one writer has pointed out, it is universal in the sense that almost everybody will have to pay, and in no other way! I should like to suggest something which in my opinion would be very much better. Consider the typical case of a married couple of about 50 years of age, in comfortable but very moderate circumstances and with an income of £5 a week. If these people are thrifty and industrious land I believe the great majority of the people of New Zealand are thrifty and industrious) they have made and are making some" provision for their old age, possibly by the purchase of an annuity or in some other way. It is quite conceivable that they may have been able to provide for themselves an income of £4 a week at the retfring age. If this should be so, it is evident that they will receive no help from the Government under the present proposals. All their strivings and foresight will have been thrown away, and they will be upon almost the same footing financially as though they had been dissolute and careless throughout their lives and made no provision for themselves at all. Yet they will have to start at once to pay a' direct tax of 5 per cent., and besides this, there is the substantial increase in the cost of living, which it cannot be denied is partly due to the Government’s legislation, and probably accounts for a further 10 per cent. It is altogether wrong and an absolute injustice.

Now, supposing a universal superannuation payment was made to everyone at 60 years of age of £1 a week. That would enable the income referred t° above to remain unaltered at £5, and jtnri'ft and the natural and proper desire to help one’s self would be encouraged, as it should be. It has always seemed to me that it should not be the function of the Government entirely to provide for people, even in their old age (although that must, of course, be done in some cases), but it should rather be to encourage and help them to provide for themselves. That, I believe, was the idea of the promoters of the original pensions scheme.

The members of the present Government seem to have some curious and mixed ideas about things. A few weeks ago the Minister for Public Works and for Transport (Mr R. Semple), when in Christchurch at the opening of the Summit road, told us, after referring to the immense amount of work being done and the huge sum of money being spent on the roads, etc., that it was the intention of the Government to see that the people had sufficient income to enable them to make use of these facilities, and to travel extensively and enjoy the beautiful scenery of this wonderful country which they themselves have been chiefly instrumental in developing. That sounds very nice indeed, and it is obvious that the best time to do it would be upon retiring from work, for then one has abundant leisure and at the age of 60 is by no means old or beyond the capacity for enjoyment. Now we have put before us a scheme which will enable us to live, it is true, and to keep a roof over our heads,

with perhaps plenty to eat and drink and fairly decent clothes to wear. But that is just about the limit of it, and in this age of superabundance of everything it does seem that it ought to be possible to contrive something better.— Yours, etc., •> A , GEORGE INGRAM. April 6, 1938. IO . THE EDITOR OF THE PRESS. Sir, —I received a very unpleasant shock on reading your leading article on the superannuation scheme outlined, by the Prime Minister in “The Press” yesterday. It seems to me to be a drastic penalty on thrifty people like myself, who have been careful through life,, and have tried to put themselves in a sound position in old age (avoiding being a charge on the State). The position as I see it is that a married couple of over 60 years of age who have a joint income of just over £ 104 are not to participate in the superannuation of 30s a week. This means that with the amount stated above they will be worse off than the people who will receive the superannuation, and even living on less than the present old-age pensioners. Before the depression, with its conversions of loans by the former Government and the compulsory lowering of interest on all local body loans, we were somewhat better off, but our living has fallen through the conversions and various other causes, illness, and payment of doctors’ accounts by about one-third of what it was when I retired from work. I myself have passed the “three score years and ten,” and my wife is only a year or two younger. As the cost of living goes up and up we find it pretty hard to balance the budget, and have to draw on our capital, thus reducing our income yet further. I think in such cases as ours the State should make up the difference, and put us and very many others on the same footing as those whose income does not exceed £1 a week. I will say without fear of contradiction that we are as worthy of receiving £4 a week as very many who will receive it if the bill goes through the House. Altogether, I think it us one of the most gross anomalies that was ever perpetrated by an act of Parliament. My wife and I have lived in New Zealand since our childhood, but are debarred from participating in the scheme, yet through a recent amendment in the Pensions Act those who have only been in the country for 10 years are to receive it. Why, single men who have not an income of over £1 a week will have a larger amount to live on than the two of us. I have no doubt that there are very many similar cases to ours in New Zealand, who, like ourselves, have never cost the State one penny in their lives, and I think they should stir themselves in this matter, and make themselves heard. I will conclude by saying that I hope this will meet the eyes of some of our local M.P.’s.— Yours, etc., THRIFT. April 5, 1938. TO THE EDITOR OF THE PRESS. Sir, —There is one condition in the superannuation scheme which seems the most unfair of all its provisions, and yet it has not been mentioned in any part of your paper. A person, who is paying premiums for life insurance, sums which amount to a considerable percentage of his income, will still be compelled to pay at the rate of Is in the pound upon that part of* his income, to provide for thoughtless individuals, who are so improvident that they have never thought about making any provision for the future. It is impossible to devise anything that could be more unjust than this to the general public.—Yours, etc., C.J.W. April 6, 1938. TO THE EDITOR OF THE PRESH. Sir, —It seems that superannuation, for some hundreds of married men who happen through no fault of their own not to be able to own a house but must pay rent, is to be a cause of worry and hardship instead of relief in their old age. There are very many cases of men whose wives are 10 years younger than themselves and, where rent has to be paid, the man must continue to work or his wife to do so, to make ends meet. It is not fair to ask a wife to go out to work after perhaps 20 years of home-keep-ing. She should receive a half pension at least, till she is of age to receive the full one.—Yours, etc., FAIR PLAY. April 6, 1938.

TO THE EDITOR OF THE PRESS Sir, —At long last we have presented to us the wisdom of the ages. It is all wrapped up in a parcel and labelled ‘'The Labour Government’s Superannuation Scheme.” After examination, one is plunged immediately into ‘‘The Slough of Despond.” We may take it for granted that the public would welcome a real superannuation scheme and Mr Savage’s attempt to produce such should be commended as much as possible. Upon examination, this much heralded scheme turns out to be merely a slight extension of the pensions scheme, and is not superannuation at all. However, let us thank the Government for trying. It is at any rate more than any other Government has ever tried to do, even if the results are more than disappointing. Another point ( upon which some praise is due, is the attempt to provide a further measure of free medical attention." This unfortunately is not as good as it looks. The question is, however, a very big one. and space will not permit of a full examination. Sufficient for the time being, l if it be stated that free medical attention for all who wish it is available now. The scheme as it stands goes a little further into benefits, than are available just now. but on the other hand, it extends into fields which will probably prove disastrous. I refer to the general practical and psychological effects. As matters stand at present, a- pension of 22s 6d a week is granted without any special contribution. Now, under the new scheme, with (in total) a terrific contribution, a further extension of 7s 6d weekly will in future be obtainable. The words ‘‘terrific contribution” are not too strong for this reason. Take a boy fresh from school. One shilling on every £1 of his wages has to be paid into the fund (quite apart from a further Is in the £1 required as his contribution to the Consoildated Fund). This goes on until he becomes 60 years of age, if pensioners contribute—then until death. His total payments constitute a very large sum indeed. Now, if at the ago of 20 years, he took out an endowment policy in the Government’s Life Insurance Department, his yearly payments are but £2 14s 3d. At 60 years of age he draws £250. With this he can purchase an annuity of just over 7s 6d a week. If he dies prematurely his wife (or dependants) will receive from £125 to £250. If necessary he could realise on the policy in other ways. This method of providing the 7s 6d is many times superior to the scheme proposed by the XJovernment and misnamed ‘‘superannuation.’"

Another way of operating is this; suppose this lad pays (compulsorily) his superannuation levy into the Post Office Savings Bank. Every complete £1 starts earning interest after it has been deposited for one month. Every week he pays in and every month his interest increases. .By the time he is 60 years of age, he has a sum of £2500 in the bank. This sum, lodged with the Government Life Office, will purchase an annuity of £203 7s 6d per annum. Or he may invest the principal at say 5 per cent, and draw a pension of £125 a year (£2 10s a week). When he dies his wife or dependants get the investment of £2soo—in effect

a nice little insurance policy. Again, if he leaves New Zealand he can draw all his money, together with the accumulated interest, and take the whole with him. By any of these methods he can obtain results so much superior to the Government’s superannuation scheme as to be completely beyond comparison. Further, these advantages are obtained on the Is in the £ contribution and also supposing he never throughout his life earns above his standard wage. So the scheme the Labour leaders have been crowing and boasting about, for the last two and a half years, as the final word in all the world’s wisdom, boils down to something worse than pitiful. The Labour leaders have, in this matter, let the noble Labour cause dov/n badly.—Yours, etc., NATIONAL CREDIT. ’ April 6, 1938. TO THE EDITOR OF THE PRESS. Sir, —I have read with interest the outline of the above scheme and have come to the conclusion that it is one of the most abominable pieces of class taxation that has ever been brought before this country. A man, say, earning £6 a week with a wife and family who has been thrifty and has saved enough to buy his own house, and also made provision for his wife and family by means of life insurance, is now asked to contribute Is in the £1 for which he or his wife will receive no benefit; and yet the Prime Minister states that no one will be placed in a worse position than he is at present. What exactly does he mean? He also made the statement two years ago that everybody (everybody, mark you) would benefit under the superannuation scheme irrespective of what his income would be, but there you are—like all the promises of the Labour Government. Before coming into power Mr Savage said “Taxation is too high, we must reduce the sales tax, the exchange,” and so on. What did they do—gave back the worker his 10 per cent, cut on his wages; then put up the cost of living by 20 per cent.; this no one can deny. Why, during the depression people in work were better off. The maximum taxation was Is in the £1 with the cost of living at least 20 per cent, cheaper. To-day we are asked to pay Is, which the Government will subsidise to the extent of a shilling. To be correct, the public will pay the other Is in some other form of taxation. The workers have only to think for one moment, especially the young men, and they will find that they have been sold a pup, and a pretty sick one at that. The comments on the scheme from the Trades Hall arfe nothing but a lot of tripe and eyewash, and for the life of me I cannot think that any sane working man could be taken in with such utter nonsense. I have not met one. worker (and I have spoken to a few) who is in favour of the scheme; and as for saying they are quite willing to pay Is 6d to 2s in the pound, it would be laughable if it was not so serious. It is time the workers woke up to the fact that the men at the head of the Labour organisation are only living on the workers. Have the people of this country realised the disastrous effect it will have? A young married man of 30, whose wife is 20, earning £5 a week, lives until he is 50, then dies. He would have paid in close on £3OO, for which his wife or children get nothing. His wife then would have to wait 20 years before she could draw the superannuation pension. What a different tale if he could have paid that money into a life insurance policy. If, however, the husband lives to 60 he then draws 30s a week for himself and wife, and they have got to exist on that for 10 years after living on £5. What a delightful outlook? It simply means that a man has got to bring himself to a state near destitution before he is allowed to draw the pension to which he has contributed for probably 30 years or more —Yours, etc., , „ DISGUSTED. April 6, 1938. ( TO THE EDITOR OF THE PRESS. Sir, —As long as pensions and superannuation were confined to civil servants, it seemed a perfectly just and correct procedure. Why civil servants should have had all these years a pension, when other workers have had to scramble in their later days for a crust has always seemed to me a puzzle. If the payments of these government workers had been enough to cover the benefits accruing from superannuation, all right, but they pay only about twothirds, and the taxpayer the rest. Of course that was perfectly all right. But now when we have a Government doing its best to put everyone on a solid basis, there comes a growl about expending money. It would be a catastrophe if the moneycrats had to put up with the same conditions as ordinary working people, and had to work for a living.—Yours, etc., PENSO. April 5, 1938.