PARLIAMENT FAMILY BENEFIT RAISED 5s

Press, Volume XCVII, Issue 28701, 26 September 1958, Page 10

PARLIAMENT FAMILY BENEFIT RAISED 5s

Attempt To Postpone Increase Fails (New Zealand Press Association) WELLINGTON, September 25. An Opposition move to postpone for a year the clause in the Social Security Amendment Bill increasing the child allowance by 5s to 15s a week was defeated in the House of. Representatives tonight during the committee stages of the measure. An amendment to secure the postponement was moved by the Leader of the Opposition (Mr Holyoake). No-one could say, ‘with any assurance at .present, that the country could afford the additional expenditure of £lO million the increase would involve, he said. The Opposition was of the opinion that such an increase in expenditure should be deferred for a year. By that time, he hoped the economic position of the country would be clarified and much improved. The amendment was rejected on a division by 35 votes to 34 and the bill was later put through its remaining stages and passed. The main Opposition criticism of the bill was directed ■at the provision which merges the Social Security Fund with the Consolidated Fund.

Mr J. T. Watts (Opposition, Fendalton) said the original intention had been to pay Social Security tax into the Social Security Fund. Statisticians had calculated that as the population grew, the time would come when the fund would be self-support-ing. That would be- the ideal stage. In good years, money had been put into the fund, but the effect of the bill was to abolish the fund. This was a retrograde and undesirable step. People should know that when they paid Social Security tax the money went into the Social Security Fund and that they were making a contribution to their own security. The Prime Minister (Mr Nash’ said the Opposition was talking humbug and trying to use up time. The fund was started in 1938 on the basis of Is in the £ as a direct tax on everybody’s income. Introduction of the medical side of the scheme had been delayed and this resulted in a surplus in the fund. When the medical payments started, the procedure had been to pay £l4 million, sometimes more and sometimes less, into the fund.

Mr Nash said the Government had intended to pay into the fund the £lB million of Social Security tax which would be collected from self-employed persons over the next three years. But it had been pointed out that it was impracticable, under the P.A.Y.E system, to distinguish Social Security tax payments and so the Government had decided that the money required would be available for all benefits and would be a charge on the Consolidated Fund. This was a powerful, stronger, and certain source of revenue. The present legislation improved the benefits and guaranteed th? necessary revenue. The bill itself provided that the amount neces-

sary should be appropriated out of the Consolidated Fund. Mr Holyoake said that, in the Budget, the Minister if Finance estimated the Social Security tax yield as £63.6 million, but Mr Nash now said it was quite impossible to estimate the yield. Mr Holyoake said the identity of the fund should be retained If there was no reserve, where would surplus taxation go? If the separate account was destroyed," there would be no incentive to build up a reserve. The Minister of Industries and Commerce (Mr Holloway) said it would be impossible to estimate the Social Security tax since it had been merged with the income tax. The bill was necessary to meet the needs of those on the lower income bracket. Mr C. G. E Harker (Opposition. Hawke’s Bay) said that if the Social Security Fund was buried in the Consolidated Fund and the country was not to be given any details, was it any wonder that the Opposition was uneasy, and that there was uneasiness in the public mind? Was it the Government’s intention to hide the fund to prevent the Controller and Auditor-General repeating his previous strictures? Dame Hilda Ross (Opposition, Hamilton) said the bill was a good one with many fine provisions All it proposed could be commended. People would feel happier, however, if they felt the finances of the country would permit its provisions to be put into effect.

Replying to questions the Minister of Social Security (Miss Howard) said the £2OO available for essential home repairs did not need to be paid back while the beneficiaries were alive. There could be no hardship. The money was a first charge on the estate. Discretion had to be given to the commission in applying other provisions of the bill, she said, giving as an instance an advance of the child allowance to buy school clothing. There were people who would try to abuse the system.