EARTHQUAKE DAMAGE

Press, Volume LXXXIV, Issue 25609, 25 September 1948, Page 8

EARTHQUAKE DAMAGE

PARLIAMENT

REINSURANCE OF RISK

ONLY SMALL AMOUNT TAKEN

(P.A.) WELLINGTON, Sept. 24. TJie total risk was about £1.000.000.000, according to the amount of premium collected, said Mr C. M. Bowden (Opposition, Karori) in the House of Representatives to-day. when speaking to the vote for the Earthquake and War Damage Fund. In certain districts there was a tremendous concentration of risk, and enormous sums would be involved if there was a major disaster, he said.

Mr Bowden asked what had been done in regard to reinsurance. He believed that only a small amount of reinsurance had yet been taken. Reinsurance should either be for a lump sum in excess of certain minimum initial loss to be borne by the Government, or else for a portion of each individual risk above, say, the first 30 per cent, to be taken by the Government.

He would be surprised if the Government obtained reinsurance at anything like the rates charged by the fund itself. Mr Bowden added. To reinsure adequately overseas would probably cost more than the total premium income of the commission. Mr Bowden agreed with the report of the commission that it would be futile to consider making the fund available for losses suffered from other causes until there was much more than the present £6,000,000 available. That sum was inadequate for a major earthquake. Farmers were complaining about having to pay earthquake insurance on farm sheds used to produce part of the national income, said Mr W. H. Gillespie (Opposition, Hurunui). The prospect of losses on such buildings was very remote. Mr T. P. Shand (Opposition, Marlborough) congratulated the Minister of Finance (Mr Nash) on his stand against allowing the fund to be used for other purposes. An injustice to farmers was that, while they paid premiums on a flat rate, the franchise of loss they had to carry themselves was on an increasing scale according to the total risk covered, which meant that farmers were unlikely to benefit in proportion to the sums they paid. Mr Nash said Mr Bowden must have obtained his information from a member of the commission, or one of its staff. Negotiations for reinsurance of. the earthquake risks were still going on. and any report on negotiations at this stage by a member of Parliament was not helpful. Mr Bowden’s information was correct, but could not be known to any person except a member of the commission or its staff. It was harmful to the country for the matter to be discussed at this stage. “Nothing Should be Disclosed”

“We have got to tjie position of saying what we think should be done, but nothing should be disclosed at this stage,” said the Minister.

Mr Nash said he had never known any country to disappear under the sea or lose all its buildings at once. Only if that happened would the whole risk of £1,000.000,000 be involved. The Government had tried to provide for any likely risk, and if the Government met the first £10.000,000 and had reinsurance for a further £5.000,000, that would probably be sufficient for any disaster such as had been experienced in recent years. He had some doubts as to the wisdom of reinsurance at all, but there was something to be said for it

He hoped the negotiations, which were still proceeding, would be successful, but Mr Bowden should take some account of his responsibility in making disclosures at this time. Mr Bowden said that if any statement was made that he drew his information from the commission or its staff, that statement would not have a vestige of truth in it. He had not spoken to any member of the commission or the staff.

PARLIAMENTARY DAY

(From Our Parliamentary Reporter.) WELLINGTON, Sept. 24.

Estimates under the control of the Minister of Finance (Mr Nash) were the main business before the House of Representatives to-day. Most of the discussion was on land and income tax, in which, in answer to a query, Mr Nash said the introduction of ‘‘pay-as-you-go” was impracticable until the department was fully decentralised. Opposition speakers also pressed for decentralisation of the Stamp Duties Office to facilitate the finalising of wills, particularly those covering small estates.

ISSUE OF IMPORT SCHEDULES

DELAY CRITICISED (P.A.) WELLINGTON, Sept. 24. Importers and manufacturers were most concerned at the delay in the issue of the 1949 import schedules, said Mr C. M. Bowden (Opposition, Karori) in House of Representatives to-day when he discussed the vote for the Customs Department. Manufacturers awaited an indication of how far the Minister of Customs (Mr Nash) would go in implementing his promise at the time of the exchange adjustment that they would be afforded adequate protection from imported goods, he said. It was most desirable that local manufacturers, who were maintaining full employment, producing quality goods at a fair price, paying good wages to satisfied staffs, and whose businesses were economic should have continuity of operation, 'said Mr Bowden. However, the exchange adjustment and the export subsidy system Britain had adopted for certain lines had changed the situation, and they should know quickly where they stood. Suppliers overseas wanted firm orders, and as importers would probably have to get in a queue an early decision was urgent.

INTERNATIONAL AFFAIRS AND WATERSIDERS

QUESTION BY MR J. T. WATTS (From Our Parliamentary Reporter.)

WELLINGTON, September 24. “Has the Prime Minister’s attention been drawn to a recent statement made by the president of the New Zealand Waterside Workers’ Union that cargo loaded on the Pacific coast of the United States would not be handled on the New Zealand coast?” asked Mr J. T. Watts (Opposition, St. Albans) in the House of Representatives this morning. “Would the Prime Minister consider consulting with the Waterside Workers’ Union so that the two bodies making decisions on -international affaift for New Zealand will adopt a common or co-ordinated policy? In view of the evident desire of this union to play a useful part in international affairs, would the Prime Minister consider including a waterside worker in New Zealand’s future delegations to international conferences?” concluded Mr Watts.

“ PAY-AS-YOU-GO ” TAXATION

SYSTEM INVESTIGATED IN N.Z.

(P.A.) WELLINGTON, Sept. 24. Replying to points raised by members who discussed the vote for the Land and Income Tax Department in the House of Representatives to-day,

the Minister of Finance (Mr Nash) said he thought that decentralisation of the department had proved advantageous on the whole, but not quite so advantageous as was at first expected. It was a real advantage to taxpayers. The Minister said he was certain that if the “pay-as-you-go” system of taxation was operable it would be beneficial for the persons concerned, but there had been a lot of difficulties with that system in Britain. There been nothing but investigation of the system in New Zealand because the department was waiting to complete its scheme of decentralisation. There were still two other places where branches of the department were to be opened, and when that was done it would be possible to look at the “pay-as-you-go” method of paying taxes.

EDUCATION BOARD REPRESENTATION

GREYMOUTH’S POSITION DISCUSSED

(From Our Parliamentary Rei-orter.) WELLINGTON, September 24. The representation of Greymouth on the Canterbury Education Board was discussed by Mr J. B. Kent (Government, Westland) in a question in the House of Representatives this morning. Mr Kent asked the Minister of Education (Mr T. H. McCombs) whether he would make inquiries to see if school committees in the borough of Greymouth were entitled to elect two members to the board, and, if they were, would he arrange for the necessary preliminary steps to be taken? In a note to the question. Mr Kent said that the population of Greymouth now exceeded 8000. which was set out as the minimum population required to form a ward for an education board.