THE SUPERANNUATION SCHEME

Press, Volume LXXIV, Issue 22376, 13 April 1938, Page 6

THE SUPERANNUATION SCHEME

co tbb aniToa of tbb wm.

Sir,—ln Mr Savage’s election pamphlet, “The Case for Labour," he states in clause 9 of the summary. The inScilßr ol the P~PK= . should be covered by a uniKrifniS wttK .Cimtiac “Thif r fn“tSfl“oPe™nnu.llon Be safiSSSt this unpopular scheme which is not universal and is financed by class taxasuggestion shove that the financing of the scheme would depend on “scientific development J^mpty production” is also nothing but empty W %l an know that there is a great volume of goods and produce (or its eauivalent in imports) in New Zealand that does not sell, but wastes because of lack of purchasing power. We also know that this surplus of food, clothes etc itself (if not allowed to staenate) is good security for. its equivalent in money. Then why grind down the workers and antagonise the better off class with unjust taxes, when th undistributed wealth can be made available In money? , , . The Reserve Bank is controlled by Parliament and money issued py tne bank belongs to all New Zealanders equally. Then why not issue new money to balance this reserve of goodsf and pay superannuation to every New Zealander over 60 years and other necessary pensions out of tms, at present, uhused surplus. • Such new money (though not repayable to the Reserve Bank) would be spent from week to week and would be cancelled out as Quickly in reducing the overdrafts of the. baker receiving the cash. Therefore every weekly or monthly issue of new money would quickly disappear as purchasing power, for repaid debts m bank ledgers are no longer money. Neither would this new issue raise prices, as do increased wages; and in consequence it would speed up not only distribution but production. This would mean that the new superanimation could be universal, and this, with health benefits and other pensions, could be financed without any “social security” contribution or taxation. Yours, etc., MANNA. April 8, 1938.

wo TB* BSITOB OF I TBS FBBSS.

Sir, —It was interesting to read the Prime Minister’s letter to the Australian paper, but it by no means satisfies. He states that the unemployed in New Zealand number “less than 10.000.” Now would anyone who supports the Labour Party please tell me why we are taxed the same as we were when he had 70,000 unemployed. Where is all the money going to that is collected by sales tax, quarterly 5s tax, and unemployment tax, all ox which were temporary measures? It the Government that put them on was in office to-day the above taxes would have gone long ago. , I understand that the tax gathered at the present time is sufficient to give 10,000 unemployed more than £SOO a year each. Where has it gone? I fancy that the so-called “social security tax is a smoke screen to cover up the Government's inability to cut out the unemployment tax, as was promised before the election. However, u is likely to prove the Government s Waterloo, for no one short of a fool would, vote for a Government that is going to tax him 2s in every P° u ” d * for that is what it means, and the great majority will never get any of it back. I invite any reader to visit any cemetery and note how many ole before attaining the age of 60. Of course, the wasters and thriftless will vote for it, but after all there are not very many of that class in New Zealand. * __ Here is a much better = way. The insurance companies are prepared to issue, a policy to every person of 20 years of age that will cost them only £2 13s 6d a year, and at the age of about 55 they can draw 7s 6d a week for the rest of their days. This, added to the old age pension of 22s 6d, would equal the- Government scheme and bring* a pension of 30s a week to all—not only to the thriftless. Now why should the Government not adopt this system and make it compulsory for all on reaching the age of 20 to pay this £2 13s 6d, and as much more as they care’ to, and so make everyone independent? I would like some Labour supporter to answer these questions’ in a reasonable way.—Yours, etc., TAX< VO TBS SSITOB OF TBB FBBSF. Sir,—Even the most ardent of those supporters of Mr Savage who think for themselves must have been astounded at the statement made by him after Mr Hcany had presented his request for more detailed Information about the national health and superannuation scheme. Surely, when any individual, local body, or State, proposes to embark on a scheme, the whole details and financial commitments involved are first ascertained and then if the proposition Is feasible, it is embarked upon. Here, In a scheme which Is of a stupendous nature and of such a scope as to affect every Inhabitant of this country, we have the leader of the Government practically having to confess that he is unable to supply of of those important details which will enable anyone to say whether the scheme is food, bad, or indifferent. The OovrnmenUafter taking office, legislated for the 40-hour week and increased wage rates, their theory being that the increased purchasing power of the community resulting from the latter would offset the disturbance incidental to the former, and hoped that the coet of living would not rise. After two years’ experience’ and helped by a period of record exports the fact that the people’s purchasing power in terms of goods is lessened instead of being increased must be a bitter pill for the Government to have to swallow. One would have, thought that after such experience the Cabinet would have realised the necessity in such a major scheme as that now proposed of having the whole plan and all its ramifications worked out in detail. What have we got? No Treasury report. no actuary’s report, no informa- 1 tion as to whether farm lands will be freed from rating for hospital and charitable aid, in fact, nothing but a bald general outline of a scheme giving certain vaguely-defined benefits and apart from a definite levy of Is on Income, an Incalculable burden of -taxation. Mr Savage says that unless his proposals can be shown to be wrong, it is going on the Statute book. And yet the Government has the effrontery to withhold the very information which will allow those most competent by virtue of their experience, in fact, the whole country, to Judge Whether or not the scheme is right or wrong. Why is this? There can 'be only one explanation—that after two and a half years of alarms and excursions, statements and promises, the Government has nothing more than the general scheme as already outlined and knows no more than any one of us Just what It will involve in its ramifications or cost. Mr Savage himself envisages the possibility of failure amt consoles himself that if such la the result, it will be in a good cau£e. Is it nothing to him that New Zealand’s ship'of state may be wrecked! In a Government rnmnossd ot men In- a oositlaß of re-

CO TK» »ITO» OF THX PBMS.

Sir—K. A, Lovell-Smith touched on a very important problem when he wrote: "As wages coats go into prices, it would be possible to reeeive high wages and buy few goods with them, as prices would jump with the nse in W T^e C problem of how to raise wages to make a good standard of living with present prices, without a following and nullifying rise in prices, is one for the Government to solve. It is to be hoped that this subject will figure foremost in Mr Savage’s coming electi°‘ raises the interesting subject of civil servants’ superannuation. Apparently the taxpayer contributes. Are the civil servants superannuated at 30s a week? If not, what moral or Just right have they to a higher superannuation than the ordinary citizen? Thirty shillings a week with permission to work (probably for a week) for another 20s is a poor reward for a lifetime’s service. It will impoverish the majority of men under 65-Vour,, etc., KAVE hoe April 8, 1938. TO TBS BSITOa OF THB FUSS. Sir—May I venture to emphasise a point already raised regarding the superannuation scheme, by your correspondents “Kaye Hoe and K. A. Lovell-Smith, namely, that the real problem in the scheme is to provide the goods required by those who have passed the age at which full working time is not generally possible. No issuing of money or purchasing power will solve the problem if these goods are not being produced. All that will result from that will be an increase in prices and an accentuation of taxation. And even if when some increase in production is possible, manufacturers and traders will prefer the easier method of increasing their prices instead of their turnover. In any case the problem remains, more production is necessary, and so far from limiting the productive power of those who are receiving benefits, every encouragement should be given to those who are still able to produce something to do so and thereby help the whole community. It may even be found necessary to increase working hours generally and to get administrative help from those who have private incomes, and to see to it that we have no compulsory idlers in the community. If. on the other hand, the necessary

goods can be produced, then no monetary system which defeats this object can be tolerated: if orthodox money cannot be found then some supplementary internal currency should be devised. As a matter of fact something of this sort is being done in many, countries to-day, Germany is a case in point, financial collapse has been prophesied and it has been asked, “How can Germany afford such huge armaments, magnificent motor roads, health services, and holiday services for workers and so on?" The answer is simply that labour and materials are available and food and clothing for the workers, and money has had to adapt itself to the new situation. 1 know there are ether factors as well, and I am not recommending German financial methods as a whole. But that does not alter the fact that the real basis of prosperity is work —a platitude so obvious that we prefer to shut our eyes to it and lose ourselves in a maze of figures.—Yours, etc., ANALYST.

April 11. 1938. [Subject to the right of reply of “Rip Van Winkle,” this correspondence is now closed. —Ed., “The Press.”!