SUPERANNUATION FOR FARMERS

Dominion, Volume 30, Issue 154, 27 March 1937, Page 13

SUPERANNUATION FOR FARMERS

National superannuation is considered as being in the forefront of the Government’s legislative programme for this year. As originally conceive the proposal was one whereby superannuation should be universal and compulsory. That means the farmers would be included. . The suggestion has been made that a special tax of 1/- in £1 would be imposed to provide a superannuation fund, all persons between 16 and GO je.ns to be contributors. This proposal is of very considerable importance to farmers, especially to farmers who are “building-up.” Compulsory contributions to the fund will defer the time when a aimer will be able to clear his liabilities. During some five years of crisis, a period of depression unparalleled in history, difficulties were so great that normal financial traditions of farming have been for a time forgotten. The history of our farming may be said to extend over some 70 years. Times of real crisis occupy but a small proportion of the whole period. The normal financial tradition of farming has been one of incurring a liability in buying a farm and then working to free the property ot encumbrance. The resultant equity was in effect the farmer’s satings his own personal superannuation fund. A current proverb of the country is that the farmer’s best bank is his land. Any surplus of income over expenses could best be invested in improvements to farm or stock or else in reduction of liabilities. Any system of compulsory superannuation, with contributions levied upon income, must forthwith reduce the funds available for employment by the farmer himself. Consideration must be given to the question of whether these funds would be better employed by a vast State department or utilised by the farmer himself at bis own discretion. The State is able to offer the security of widespread investment, though at a low rate of interest. There is a certain return; but one risk is run and that is the risk of monetary inflation, which would reduce the value of the pension payments insofar as their purchasing power xs as concerned. The farmer, utilising funds that he would otherwise contribute, would normally secure a return from one and a half times to twice as great as that secured by a State department. In the case of a developing property the utilisation of funds on the farm would probably provide greater returns to a considerable degree. The whole question is one of very real concern to the farming community, and it would be well that it be given consideration. It is for farmers themselves to decide whether they would wish to end their days as State pensioners or make provision for old age by themselves directing the investment of their surplus income. Superannuation cannot be free, and the question of whether it is worth the price to a farmer is one for deep consideration.