SOCIAL SECURITY PROPOSALS

Press, Volume LXXIV, Issue 22478, 12 August 1938, Page 12

SOCIAL SECURITY PROPOSALS

on reaching the age of 60 years. In actual fact there were no proposals placed before the committee to provide for a universal superannuation scheme, and it is misuse of the word superannuation to call the present proposals a superannuation scheme at all. The only extent to which the plan is universal is that every person having an income must contribute by both direct and indirect taxation toward the cost of the i scheme, irrespective of whether he has already made provision for his own security in old age or not. The Benefits “The benefits of the scheme are restricted to those who live until they are 60 years of age, and who can then comply with the qualifications regarding income and property when applying for the present old-age pension. The proposals merely increase the old age pension from 22s 6d a week to 30s a week, and reduce the qualifying age for men to that obtaining for women—6o years. Superannuation, as generally understood in this country, implies the right to receive a stated sum of money at regular intervals, without any ‘means test’ whatever, and that every person who subscribed to or is covered by a superannuation scheme shall be entitled to the benefits of the scheme on reaching the stipulated age. These two fundamental and most important factors are entirely absent from the Government’s proposals. Those who have .made provision for their own futures by way of life insurance. superannuation schemes, or by other means, are to be compelled to contribute toward the cost of the proposed national scheme, yet they will be debarred from receiving superannuation benefits because they have already made provision for themselves. “The Government health service proposals claim to provide for free general practitioner service, hospital treatment, mental hospital treatment, medicines, and maternity treatment. No services that involve the taxing of those receiving benefits or services to the extent of £3,000,000 —or £2 a head of the population per annum—can be called free services. “At this stage in our comments on the health division of the scheme we wish to record the fact that the Government has steadfastly declined to lay before the committee working details of its proposals, as would be necessary in the bill. We hold that it is imperative to know how it is proposed to raise the necessary funds before a conclusion can be reached as to the practicability of the proposals, and we disagree with the Government's contention that the matter of how the money is to be raised is one solely for the Government, and not one for the committee to consider at all. “Committee Hampered” “On the subject of lack of information. the work of the committee has. in our opinion, been seriously hampered by the refusal of the majority of the committee, including all Government members present, to “(1) Call witnesses we have re-1 quested should be called, and who I would have been able to give most valuable evidence on the Government’s I proposals. These include the head of the Department of Labour and the head of the Treasury. j “ (2) To disclose the methods pro- 1 posed to raise the money necessary to. finance the schemes, which will cost i almost £18,000,000, or £l2 a head of I the population in the first year, and a | steadily increasing amount thereafter, j “From the information and evidence! which has been made available to the | committee we have come to a mini-; ber of conclusions in regard to the, health scheme. In the first place, it; is clear that the most essential service! that is provided by general practi- 1 tioners at present will not be provided : under the Government’s proposals. The i poor and needy will be in no better position to obtain surgical, laboratory, radiology, consultant, specialist, massage, physiotherapy, dental, optical, or home nursing treatment than they are now. ; “The difficulty of securing a large panel in the country will force doctors into the town. “The cost of attention in the country will be raised. "The application of the scheme is likely to result in the elimination of the existing specialist and consultant services, which now form an essential and increasingly important part of our present medical services. Doctors’ Attitude “The New Zealand branch of the British Medical Association has clearly indicated .that it cannot promise its willing support and co-operation in carrying out the scheme, and we consider that no scheme can succeed in such circumstances.

"There is no provision for relieving ratepayers, in either town or country, of the present burden of hospital rates.

“Generally, our opinion on the health scheme of the Government is that it provides the basis for the regimentation and socialisation of the medical profession, and for ultimate control ol the entire medical service by the State. The weight of evidence is overwhelmingly opposed to the Government’s health proposals. Any person who, in any way whatever, makes provision for his own security in old age, or who provides for his own security in the case o- sickness, deserves and should rcco've the wholehearted co-operation a i :d assistance of the State, whether such provision is made individually cr by collective effort. Thousands of people in all classes of the community have already made provision for superannuation, and for an adequate medical service to be available should it be required. “The contribution to these schemes by workers varies; but is about Is in the £ on wages. There is little doubt that many of these excellent schemes will cease to operate if a compulsory State scheme is ■ inaugurated from which participants in the present schemes cannot benefit (in respect of pension benefits at least), although they are compelled to contribute to its funds “Discouraging Thrift” “The proposals of the Government would have the effect of discouraging thrift, putting a premium on improvidence, and giving reward to the spendthrift—all at the expense of the careful person who believes and practises self-reliance and thrift. “Under the Government’s proposals, the only provision made for the relief of unemployment is £1,500,000 for sustenance, so that in the event of unemployment increasing, additional taxation will be necessary.

“The estimated cost of the Government’s joint scheme is £17.000,000 for the first year, which, with the estimated cost of administration (£ 850,000) added, gives a total cost for the first year of £17,850,000. The estimated cost after five years is £20,400,000; after 10 years, £21,900,000; and after 30 years, £25,000,000.* It is to be emphasised that if wages in future are to bear the same share (42 per cent.) of the total cost of the scheme as in the first year (i.e.. £7,500,000 out of a total cost of £17,850,000), and presuming that the proposed tax of Is in the £ is to be levied on the same basis as at present, then we will require an ‘aggregate private income’ of £216,000,000 ten years hence to finance the scheme. There is no justification for assuming that our income will increase from its present record' level of approximately £150,000,000 to £216,000,000 in the next 10 years.

“The question of the ability of the country to carry the increased taxation burden involved in the Government’s proposals must receive most careful consideration. It would be disastrous to establish a level of pensions, etc., that could not be maintained in the cvpnt of price fluctuations on the markets which absorb our surplus production, and on which we so largely depend for the great portion of our national income.”

MINORITY REPORT BY COMMITTEE

Views of Opposition Members .

MODIFIED SCHEME SUGGESTED General Principles Approved IFrom Our Parliamentary Reporter.] WELLINGTON. August 11. The altitude towards the Government's social security proposals of three Opposition members of Parliament who were members of the Parliamentary Committee which examined those proposals Is expressed in a report which was issued by them today. The report is signed by Mr S. G. Holland (Christchurch North), the Hon. J. G. Cobbe (Orona). and Mr H. S. S. Kyle (Riccarton). The opinions ot the Opposition members on various aspects of the Government's proposals are summarised in the following recommendations;— I

"As it is essential to proper consideration of the Government's proposals that it should be clearly established: “(a) That the income necessary to support the expenditure proposed is ■well within the taxable capacity of the people, and, "(b) That the national income will In future years rise sufficiently to support the steadily increasing costs, and as no such evidence has been given before the committee, we do not consider it wise to embark on these costly schemes in the absence of such necessary information.

"In view of the evidence presented, ■we have come to the conclusion that a portion of the population has not at present available to them an adequate medical service: nor are they able to make provision for such service. Among these are the aged and infirm, who are in most need of medical care. In addition, there is a further section of the community which, while able to meet the expense of minor sickness, is unable to pay lor the expense of s serious illness involving hospital treatment, operations, or specialist and consultant services. We therefore recommend for these people a complete health service, without charge, such service to include the following services:— Services Recommended "General practitioner, surgical (operations). home nursing, pharmaceutical (medicines and appliances), consultant and specialist, laboratory and radiology, hospital and ambulance, maternity, physiotherapy and massage, dental. and almoner services. "This would entail no dislocation of the present friendly society system, and it would not prevent the inauguration of voluntary group insurance schemes, which have proved of considerable value in other countries; nor would it disorganise the medical profession. "We are struck with the fact that there is a complete absence from the Government’s proposals of any provision for the prevention of disease, for improvement in the health of the nation, or investigation into the causes df disease, especially those complaints tn which the incidence is much too high in New Zealand. After provision has been made for a full health scheme *o be made available to the people to Whom we have already referred, it Is our opinion that further extension of the health services of the community should be in the direction of preventing disease, and removing its causes. Such purpose could be served by the of a competent advisory body to inform the Government on auch matters as:— "(I) Nutrition of the people. “(2) An education campaign in the direction of more healthy living. "(3) Co-ordination of all voluntary organisations and State activities, having for their objective the improved health of the people. "(4) The best means of attacking the needlessly high incidence of common conditions, as, for example, dental decay and goitre, thereby raising the general standard of physical fitness of the nation’s youth population. Saperann nation “We strongly support the principle of superannuation, and recommend that a universal, compulsory superannuation scheme be inaugurated, based on the following principles:— "(1) That every person making direct contributions to the fund shall be entitled to benefit, without any ‘means test’ or other qualification. “(2) Those persons, such as State employees and others in private superannuation schemes, who have made provision at least as adequate as provided in the State scheme, shall be • exempt from any compulsion to subscribe to the State scheme.

“The object of providing increased pensions and other social services for the poor and needy is one with which we heartily agree,” states the report. “We are also entirely in accord with the principle of superannuation. It is not only a duty devolving on all legislators; but it should also be their constant aim first to extend all possible aid to the aged, sick, and infirm who have Insufficient means to provide for themselves, and, second, to encourage and assist thrift in the community toward the end of inducing a sense and securing the fact of as great a degree of social security as possible. Any critical comments we may make in this report are, therefore, to be construed as being actuated not by any opposition to such social aims, but rather as an earnest expression of our desire that, whatever methods are finally adopted, should be the best, soundest, and most equitable that the resources of the country can provide, and that in the interests of both contributor-benefic-iaries and the State they should befounded on a reasonable assurance of the ability of the country to sustain the scheme, at whatever levels are determined. Taxation Discussed “It is proposed to make the present temporary employment promotion tax qf 8d in the £ on the wages and other income into a permanent tax, and to increase it from 8d in the £ to Is in the £ on the income of all persons. What was. therefore, an emei-gency measure will become a permanent tax, with the rate increased by 50 per cent. It is further proposed to apply the existing unemployment registration levy toward the cost ol the scheme. The balance of the money required to finance the joint scheme must come from the Consolidated Fund, presumably from general taxation. Under the Governments proposals, the present wages *"* L exemptions will no longer apply, Will have to pay a wages tax fu s °e i al security contribution’ of Is in tita £, hy the Government ♦if- *'. ven ri3e anticipation that in* superannuation proposals would provide for superannuation to become ol right, \o every