COST OF LIVING New Price Index Urged In House

Press, Volume CVII, Issue 31385, 2 June 1967, Page 3

COST OF LIVING New Price Index Urged In House

(New Zealand Press Association) WELLINGTON, June 1. Calling on the Government to face the “cold hard facts” of the social security benefit, a Labour member of Parliament tonight suggested the Government adopt an entirely new and fairer index for calculating increases in benefits.

Mr N. J. King (Lab., Waitemata) told Parliament during the second reading debate of the Social Security Amendment Bin that the founding of a new index would go a long way to keeping benefits in line with the cost of living.

The Minister of Social Security, Mr McKay, said when age benefits were raised by 2s 6d recently, the Government had anticipated a rise of about li per cent in the consumer price index. The Government had increased social security benefits four times since 1960 and had endeavoured always to keep benefits above the current consumer price index, said the Minister. A Guide Only Mr McKay told the House that he was aware of the deficiencies expressed in the consumer price index and added that no index could be anything more than a guide. He emphasised that the Government would not hesi-

tate to act if it thought beneficiaries were being placed at a disadvantage in relation to the rest of the community. Mr N. J. King (Lab., Waitemata) said: “The Minister has gone to some length to try and excuse the miserly increase that this Government has given to the beneficiaries of New Zealand. “Surely no member of the Government can claim that the increase of 2s 6d a week is a just and adequate increase. Can any Government member contend that this is keeping beneficiaries in line with the rises in the cost of living?” Standard Falls Miss M. B. Howard (LabSydenham) said the social security system was the greatest benefit ever introduced into New Zealand. She condemned those who spoke of transfering.some of the State's responsibility under the system to insurance companies. “The people of. New Zealand will never accept any scheme which leads to a

breakdown of the social security system and its handing over to insurance companies,” she said. Miss Howard claimed that the standard of living for pensioners was falling rapidly and many were unable to cope with increased costs. “Pensioners are terrified of the future when this sort of legislation and the Government’s new economic measures are dropped on them overnight,” she said. ‘Mere Pittance’

Mr V. S. Young (Nat, Egmont) said a welfare State could only exist with a healthy economy. The social security scheme must be operated in a fair manner and the Government must not erode the will of people to look after themselves. "We cannot pay out more than we have received—the manner in which the Government has done this at the present time is realistic,” he said. Mr V. F. Cracknell (S.C., Hobson) said: ‘1 believe this 2s 6d is a mere pittance. It is totally inadequate to compensate for the present day high cost of living.” Mr Cracknell said: “It is true that beneficiaries can go cap in hand to the Special Assistance Fund, but why should they? Should it not be theirs by right?” The Basis Mrs E. E. McMillan (LabDunedin North) said that the present consumers’ price index was not a fair basis for estimating increases in oldage pensions. “The things covered by the index are based on the requirements of younger and middle-aged New Zealanders and are quite different from the needs of older people. “To include things in the index which are not needed by pensioners is quite unfair,” she said. Mr R. M. Barclay (LabNew Plymouth) said that since the debate had got under way several members had received telephone calls. One old-age pensioner had told a Labour member that the price of a sack of coal had risen from 13s to 15s today. Calls Received Mr Barclay said another call was from a diabetic who had to spend 12s 6d a month on tablets. In this case the 2s 6d-a-week rise in benefits had already gone. The member said the present rates of social security benefits allowed for no luxuries—not even a telephone or radio licence. The Minister of Health (Mr McKay) replied that every increase the Government had given aged beneficiaries was higher than the increase in the consumer price index.