MONETARY COMMISSION Better Provision For Family Maintenance Held Necessary

Press, Volume XCII, Issue 27736, 13 August 1955, Page 2

MONETARY COMMISSION Better Provision For Family Maintenance Held Necessary

(New Zealand Press Association)

WELLINGTON, Aug. 12. “Lack of provision under the present financial system for the cost of maintaining a family” was criticised by Mr J; Turnbull, secretary of the Public Service Association, before the Monetary Commission today. Mr Turnbull contended that this was probably the most striking instance of the way in which social welfare was neglected by the financial system. In a period of rapidly-increasing incomes, the incomes of those who had families to support had fared worse than most others in New Zealand, he said. There was a “lamentable lack” of statistical information on the cost of maintaining a family. Though elaborate and detailed statistics were gathered on thousands of other subjects, this remained the “Cinderella of social problems," though it was possibly the most important. He suggested that the cost of maintaining a family was a difficult thing to ascertain, largely because in nearly all of the individual cases it was not additional expenditure which was involved, but a switch from one type of expenditure to another. In support of his case, Mr Turnbuil produced an analysis of a series of family budgets collected by his association in 1952-53. Dealing with the amounts spent on fruit, vegetables, and eggs, he produced a table showing that, although total expenditure tended to rise with the size of the family, the average expenditure a person decreased, indicating that the consumption of those valuable protective foods decreased where they might reasonably hope that it would be highest Publicity or Foods ‘ In any school, \re can see most attractive posters, printed at the Government’s expense, advertising the health-giving values of eggs, oranges, apples, tomatoes, and other foods within this group,” said Mr Turnbull. “Costly schemes are introduced to ensure that the growers are relieved of financial risk in their important sphere of production, but thege figures suggest that somewgere along the line the scheme fails in its purpose. “Whoever gets the profits, the children don’t get the foods,” said Mr Turnbull. “Family benefits were raised to their present ~e of 10s a week a child in 1944, but it was not until 1946 that these benefits were freed from a means test and put on to a universal basis. Since 1944, however, the purchasing power of 10s has shrunk to 6s 2d.”

A number of general wage increases had been ordered by the Arbitration Court, but the Court did not accept the proposition that in determining minimum rates of wages for adult male workers, it should adopt as a basis the assumption that every adult worker supported a wife and a specified number of children, said Mr Turnbull. In the face o* rising prices, the value of the provision made for the maintenance of families was dwindling away. , . Mr Turnbull said the effects of failure to adjust the family benefit to compensate for increasing prices fell most heavily on the wage and salaryearning groups which, with dependants, were by far the largest groups in the country. The size of the problem was also indicated by the fact that more than 290,000 family benefits were paid for the yeane ended March. 1954, he said. These payments were for 671.523 children, of whom 575,306 were in families where there were two or more dependent children. “It is obvious that a- very much lower standard of living has to be accepted and endured so long as there are young children to be cared for,” said Mr Turnbull.

The sole responsibility could not be placed on the wage fixation system, but must be shared by the financial system as a whole, he said. Though contribution could be made by subsidies, taxation concessions, non-mone-. tary social security benefits, and the like, it was most logical and most Sractical to use the family benefit sys»m to ensure that family incomes kept pace with other incomes. Until some effective and equitable method had been found to achieve stable prices, direct price control should be adopted, said Mr Turnbull. The achievement of stable prices ought not to be at the expense of wage and salary-earners, by cutting down their purchasing power. The financial system of the country ought to enable the wage and salary-earners to acquire a share in the country’s increasing capital wealth. Mr Turnbull said savings should be encouraged. The average wage and salary-earner would not be affected by an increase of 1 per cent., or even more, in the interest offered to him. “He will be more impressed by the assurance, if he can rely on it, that his savings will not lose in value,” he said. “He will, in many cases, want to be sure that his savings are available z or use if required in an emergency.’’ Savings might be encouraged by exempting them from income tax up td a reasonable sum.

Wage-Fixing System Greater co-ordination between the Arbitration Court and other parts of the economic system was urged by Mr Turnbull. He said the’ present monetary, banking, and credit system concentrated on building and preserving national wealth, and to a considerable extent neglected the corollary of ensuring an equitable distribution of that wealth. Greater co-ordination of the two different parts of the system could be achieved only if Government responsibility for the whole system was recognised. Mr Turnbull said he was not referring to the Arbitration Court’s primary function in arbitration and conciliation. but to its additional function of the economic adjustment of wages by general orders. As a judicial authority, the Court was required to take account of such Government directions only as were laid down in legislation or regulations, said Mr Turnbull. Its decisions might be contrary to Government policy, and thus might be contrary and prejudicia? to everything that was being done by the rest of the economic system. Dealing with prices and wages, Mr Turnbull submitted that a sliding scale system should be introduced whereby wages generally were automatically adjusted to price changes at intervals of. say, six months. Efforts should also be made, he said, to ensure as far as possible that prices were not allowed to rise, so as to deprive wageearners of the benefits of wage increases granted. If the suggestion of automatic adjustments was impracticable and inadvisable, the alternative should be that the Court be required at six-monthly intervals to examine the official retail price statistics and, if desirable in the circumstances, make a general order adjusting wages generally in conformity with the price movement, said Mr Turnbull.

To ensure that the benefits of increased productivity were fairly distributed, he suggested an automatic adjustment of wages to productivity. As productivity was subject to seasonal and other variations, this would have to be based on a formula which recognised the general trend, and eliminated the. short-term fluctuations, said Mr Turnbull.