The Dominion. FRIDAY, JANUARY 28, 1938. SUPERANNUATION AND ITS COST

Dominion, Volume 31, Issue 105, 28 January 1938, Page 10

The Dominion. FRIDAY, JANUARY 28, 1938. SUPERANNUATION AND ITS COST

Cabinet apparently has been giving up a good deal of its time lately to consideration of superannuation and health insurance schemes regarding the details of which only the vaguest possible rumours are available so far as the general public are concerned. These matters naturally are of great importance to all classes, not only for their possible direct benefits but also because of the cost which they involve. It is regrettable, therefore, that ,it is the intention of the Government as announced to force through legislation during the coming session of Parliament to give effect to the particular ideas which may emanate from the Cabinet conferences. The country should not.be committed to any decision on policy measures of such far-reaching consequences without the fullest opportunity for scrutiny and investigation by those affected. It may and probably will be argued that because members of the Government have given superannuation and health insurance schemes consideration before bringing forward their plans, and because their proposals will be open to discussion on the floor of Parliament, they will have been adequately examined and discussed before passing on to the Statute Book. In actual practice, experience has shown that once a measure is introduced by the present Government it is assumed by the members of the Government following to be perfect—or as near perfect as possible—and incapable of improvement at the hands of its critics, friendly or otherwise. This point of view has already led the Government into legislative errors which have occasioned hardship and loss to sections of the public, and certainly no risks of this nature should be incurred where so much is at stake as is the case in respect of national superannuation and health insurance. The magnitude of the issues involved is very well indicated by the report of the departmental committee on National Compulsory Superannuation and Health Insurance which investigated these matters in 1935. This committee spent a good deal of time inquiring into various schemes and their application to New Zealand conditions. It is not necessary at this stage to discuss the conclusions reached, but the figures of cost involved cannot fail to arrest attention and emphasise the need for caution. The popular ideal, of. course, is to make all such schemes as wide as possible in their application, and as generous aS circumstances permit in their benefits.. With this in mind the committee first considered the cost of a universal scheme (males only) on the basis of a superannuation payment of £2 per week at the age of 65. This on a non-contributory basis would involve the country in an initial capital deficiency of £207,000,000,. 0r an annual minimum State subsidy in perpetuity of £8,296,000, which would, of course, have to be paid by the public jat large. Naturally such a scheme was regarded as impracticable. Even with a flat rate contribution of 3/6 a week by all males between 16 and 65 years of age the initial capital deficiency would be £150,000,000 and the annual contribution by (he State £6,000,000. We mention these figures, estimated by the experts associated with the committee of inquiry, merely by way of illustrating the importance and magnitude of the issues involved. The cost must, of course, depend on the extent of the benefits afforded under the scheme and the limitation of the numbers of those who are to benefit. A universal superannuation scheme, such as many people have been led to look forward to, clearly is out of the question. In the same way a national compulsory health insurance scheme must give rise to a 9 wide divergence of opinion as to what is sound and. wise and. practicable. Here again there has been soma investigation made, and the experience of some other countries may be drawn on, but the best possible plan for this Dominion to follow and the range of benefits and cost cannot be satisfactorily decided in the hurried passage of a Bill through Parliament. The public will have to pay the cost and they should be fully informed and have ample time to weigh the merits of what they will receive against what they have to pay for it.