CAPACITY OF COUNTRY TO PAY

Dominion, Volume 31, Issue 271, 12 August 1938, Page 12

CAPACITY OF COUNTRY TO PAY

Aid For The Sick And

Infirm

METHODS OF FINANCING

SCHEME

"The object of providing increased pensions and other social services for the poor and needy is one with which we heartily agree,” states the report of the three Opposition members of the Parliamentary Committee which examined the Government’s social security proposals. "We are also entirely in accord with the principle of superannuation. , , • . "It is not only a duty devolving on all legislators, but it should also be their constant aim, first to extend all possible aid to the aged, the sick and the infirm who have insufficient meins to provide for themselves, and, second, to encourage and assist thrift in the community toward the end of inducing a sense, and securing the fact, of as great a degree of social security as possible. Any critical comments we may make in this report are therefore to be construed as being actuated not by any opposition to such social aims, but rather as an earnest of our desire that whatever methods are finally adopted should be the best,-the soundest, and the most equitable that the resources of the country can provide, and that, in the interests of both contributor-beneficiar-ies and the State, they should be founded on a reasonable assurance of the ability of the country to sustain the scheme at whatever levels are determined.” -Methods of Finance. After referring to the proposals to increase the employment promotion tax of Bd. in the £ on wages and other income to 1/- in the £ on the income of all persons, and to use the revenue thus obtained as a social security contribution, the report states that what was an emergency measure would become a permanent tax, with the rate increased by 50 per cent. It was further proposed to apply the existing unemployment registration levy toward the cost of the scheme. The balance of the money required to finance the joint scheme must come from the Consolidated Fund, presumably from general taxation. (The increased cost of the Government’s proposals would amount to £9,000,000 in the first full year, and this would steadily increase in each subsequent year.) Under the existing law several classes of income were, exempted from wages tax, namely, wages of persons under 20 years, wages of relief workers, wages of domestic workers, “other income” of a great many women, sustenance men, pensioners. Under the Government’s proposals these exemptions would no longer apply, and all would have to pay the wages tax, or social security contribution, of 1/- in the £.

IMPORTANT WITNESSES NOT CALLED

Mr. Holland Curious

“WHAT HAS GOVERNMENT

TO HIDE?”

“A tax by any .other name hurts just as much, but more so when it is raised by 50 per cent.,” said Mr. S. G. Holland (Opposition, Christchurch North), when speaking on the report on the social security proposals in the House of Representatives last night. Mr. Holland said that the taxpayer would not be misled 'by the alteration of tbe name of the tax from wages tax to social security contribution. Mr. Holland’s speech was based on the report issued yesterday by the Op position members on the committee. One fact, he said, that, had not been fully realised was that the present exemptions from wages tax represented a total of £17,500,000 of income; that was 15. per cent, of the aggregate income of the people of New Zealand. The realisation that they would now hove to pay 1/- iu the pound would come as a great surprise to those who were in receipt of income. Mr. Holland said that the country owed a debt of gratitude to the English actuary, Mr. G. 11. Maddox, for the exceedingly capable services he gave to the country, iu giving his evidence and making his investigation. The Opposition members considered, however, that, several other witnesses who could have given valuable evidence had not betn called, though their evidence had been asked for by the Opposition memIters. A request, was made that the head of the Employme.nt Department, be called, because the Opposition members realised that no reliance could be placed on the employment figures given in the Abstract of Statistics. In fact, it had only been within the last few days that it was admitted that 35,000 persons were dependent, on the unemployment fund. “We had the utmost difficulty in getting evidence on the true position of unemployment in this country,” said Mr. Holland, “and it is not difficult to realise why. Mr. A. S. Ridler was called, but we found that as head of the placement service he was able to give evidence concerning only 150 men. We wanted him recalled later, but this was refused. We also wanted the bead of the Treasury called, because be could have given us details of what the cost of collecting the new tax might be, and also what effect higher taxation might have. We have found in Christchurch with the trams that'higher fares invariably mean lower revenue. The Prime Minister himself moved that the head of the Treasury be not called. What has the Government to hide that it would not allow us to call the evidence we thought necessary?”

Mr. Holland said that a serious objection to Hie panel doctor proposal was that the doetprs would not be available except, at certain hours. There were many sicknesses which would not wait till the doctor opened for business next day.

Mr. Holland quoted figures for tbe production of various New Zealand produets during the last 50 years, and said that it was quite unreasonable to expect Hie same expansion in the next 50 years. Tbe warning bells of quotas had already ]>oen sounded.