Tax Remedies For Welfare State

Press, Volume CII, Issue 30056, 14 February 1963, Page 9

Tax Remedies For Welfare State

(Neto Zealand Press Association)

DUNEDIN, Feb. 13. Many maladjustments in New Zealand’s Welfare State system could be corrected by taxation reform and inflation reduction, Professor A. J. Danks, Professor of Economics at Canterbury University, told the British Medical Association conference today.

Professor Danks said much had been said and written in complaint against the Welfare State in New Zealand. “lit is associated with a flaccid, inefficient, unenterprising society, conformists m all the worst senses of the word. ‘‘K is claimed that the Welfare State has sapped initiative, buried us in taxes and left us at the mercy of inflationary economic forces,” he said. Room For Criticism Professor Danks admitted there was room for criticism of the system. “We have too much inflation and some of our social

expenditure has been unwise.” Housing and food subsidies were the most extravagant, he said. “But wbat we have spent on health, in spite of some blemishes, surely avoids the worst criticism.” It was nonsense, Professor Danks said, to jay New Zealand’s ills at the door of the Social Security system. “Much would come right if we were to accept the Welfare State as the noble attempt to alleviate hardship and sickness which it is.” Tax Reform

Taxation reform and inflation reduction would correct many maladjustments without affecting the essential structure of the collective social expenditure. Professor Danks said New Zealand’s political framework of public health expenditure was “now staidly middle-aged.” It had been further settled by codification resulting from the new Hospital Act. “This stability reflects public opinion. There is clearly no active reformist spirit at large in the community, regarding health matters,” he said. Health expenditure reform must come - largely from within the medical profession, Professor Danks said. Cost of Health The health services’ public cost in New Zealand was growing at a greater rate than general economic expansion, he said. “It is impossible to say whether we are consuming more ‘health’ than we can afford.” Levels of expenditure warranted concern, he said. “It may come about that changing population structures and modified treatment methods will enable some reduction in the rate of this increase,” Professor Danks said.

Professor Danks estimated that State money paid directly to doctors accounted for 10 to 12J per cent, of total State health expenditures.

“This is not an indication that doctors are over or under-paid by Government. “But if we accept that doctors have the most important voice in disposing of health resources, it appears that the profession is figuratively signing very big cheques on behalf of the taxpayer.” Welfare services would break down without doctors’ moral responsibility to avoid waste, he said. “Where this is not so, the profession must speak up.

‘.This is the strongest possibility for reform of our health services in this stage of Welfare State maturity,” Professor Danks said.