The Dominion. WEDNESDAY, JUNE 26, 1935. OUR RISING PENSIONS BILL

Dominion, Volume 28, Issue 230, 26 June 1935, Page 8

The Dominion. WEDNESDAY, JUNE 26, 1935. OUR RISING PENSIONS BILL

Politicians as a rule fight shy of the subject of pensions, well aware that any criticism they may have to offer concerning the country » liability 7 Uer the various P“ en« will be promptly seized upon by their opponents as capital fo elec tioneerin" purposes. Yet it is necessary, as with other departments expenditure, that there J'” taking not with the deliberate intention of finding a pretext toi uX the pruning-knife, but as an act of prudence to measure the capacity of the country’s resources to discharge at existing ra liability which appears to be rising proportionately more rapidly than the revenue. An opportunity for doing this is provided in the Retail d analysis of our pensions bill made available for publication to-day by the Minister of Pensions. - . It is desirable in examining any item of n^. “P e " dl kee ’ whether for education, pensions, defence, or public health to keep steadily in mind the fact that the money for .the spending departments, as well as a fair proportion of that required for the organisation and administration of the earning departments, has to be raised fro less than a million'and a half people It is true that this small pop lation, through its’ highly-organised export industries, earns an astonishingly large income; but, asAve have seen, this income is sub J ec J to violent fluctuations, and had it not been for .various devices, adopted during the depression for weathering a,most serious economic crisi,, the country’s financial position might have become so desperate that many excellent humanitarian and social services would have had be jettisoned for the time being at least, if not altogether.. Bear * these points in mind it must be obvious that an annually increasing pensions bill, which is already over f 3 000,000, hs a very heavy obligation for a millibn and a half people. With the exception o the Public Service superannuation schemes, not one ot. the Maipension funds is on a contributory basis. Some attempt was made to bolster up miners’ pensions with a credit from the gold duty, but this was discontinued in 1933, at which date credits. totalling £54,742 had been paid in as a partial offset to the total pensions payments of f 693,631. . . , . ' - ' . Bearing in mind that our population is for. the time being almost stationary, and that the rate of taxation is within measurable, distance of, and in some cases has reached, the point at which the law of diminishing returns begins to show its effects, then the question is not whether, but how long, the nation can stand this tremendous dram on its resources. With a practically stationary population the tendency will be for the age groups to move forward, and with the longer expectation of life, the number of old-age pensioners will tend to become relatively disproportionate to the rest of the population. Also, the tendency in hard times is for a greater number of people to come on the pensions lists at a period when the country least able to afford the additional strain. Since 1931, the total number of pensioners of all classes has risen by 19;291 to '80,208. . . • , As the. result of the National Expenditure Commission s recommendations certain economies in pension payments were .effected, but chiselling of .this kind for budgetary purposes leaves the mam question untouched; namely: Is it possible to carry out our existing pensions obligations on the present basis? State pensions of one kind and another have entered largely, and rightly, into the national economy of many modern democracies which have been attracted by the ideals of humanitarian legislation. Unfortunately they have also made.good ground-bait for the electors, with the result that benefits arid privileges have been extended from time to time until, as in this country s experience, even the contributory schemes of the State services have been brought to'the point of insolvency. It is obvious therefore that sooner or "later, and the sooner .the better, it will become imperatively necessary to examine the structure f of the pension schemes and re-create them on a sounder basis. '