SUPERANNUATION

Evening Post, Volume CXX, Issue 87, 9 October 1935, Page 19

SUPERANNUATION

POSITION OF FUNDS

WHAT OF THE FUTURE ?

DISCUSSION IN HOUSE

Attention to the state of the Government' superannuation funds was drawn in thejHouseof Representatives yesterday afternoon, • when the .report of the Government' Railways Board Superannuation Fund, was under consideration. The Leader of the Opposition (Mr, M. J. Savage) pressed the Government,for ;an answer as to its intentions, .towards the. superannuation fund, and pointed out that if the funds were in an unhealthy state, it was because the Government had not paid in its share. Replying, the Minister of Finance (the Rt. Hon. J. G. Coates) said that -in last year's Budget the policy of the Government was clearly indicated. "The' "obligations that rested on the Government would be carried out in their Entirety—that was clear in last year's statement. He be■lieved the issue was whether it was worth while "to retain the superannuation funds m their present form or not. The Government, he added, had guaranteed superannuation. Mr.. Savage said that there was a paragraph in the Budget relating to superannuation generally. It was common knowledge that the position of the funds-was not everything it might be. The Minister's statement was that it was not proposed to deal with the situation this year,, but that he was going tO deal with it next year. "Is he an optimist or not?'< asked Mr. Savage. ■ "He-may not be here next year." - . • The Minister of Finance (the Et. Hon.:J. G."Coates): If I don't come back next year I- will have nothing to worry about. ..' Mr. Savage: But those who, do may have to worry,about it because they won't be able, to-find out where the Minister left off. We should know something about it now. Was it possible, he continued, that when next year, came the Government would legislate itself out of its financial obligations? ■ "I-would like to have an assurance from the Minister that that is not going to happen," he said. "Much as we would regret the Minister's absence, there will be nobody here to give us the commonsense reply." Mr. Coates: Then the safest" thing is for me to be back here. ■v; Mr. Savage: The electors are the best judge. I can't give the order, or' I might do it., He said, he .was sure.that the railway men wouro'iik'e to have an assurance that, nothing was going to be done that would alter the position of superannuitants and those contributing to the funds.„ A Royal Commission had been set up, and-the report was not one that would make one feel optimistic about/the position of the fund. If the funds were weak, it was not due to any failure on the part.of the men, but to the failure of the Government to make good its share. That was where the interest began as far as the railway men were concerned. "Has the Government anything in its mind?" asked Mr. Savage. "The Government might take it into its head to take a short cut legislating itself put of its responsibility under the existing law." j CONFISCATION? r Mr. J. A. Lee (Labour, Grey Lynn) said that if the Government's future policy was to be judged by its past, then the policy of confiscation and repudiation was intended^ at some stage of the game. The House had been led to believe <that the .findings' on superannuation would be embodied in a Government Bill. The report of the Commission as accepted by the Government meant that the superarinuation funds were to be repudiated. The Government had no future, and had returned with a tombstone fittingly enough from a bridge called "Waterloo." The contributors to the funds were entitled to know the Government's intentions before polling day. Mr. H. T. Armstrong (Labour, Christchurch East) asked whether the House could expect the Minister to do something definite this session. ■:, ;Mr. Coates: Ah! That's.the question. Mr. Armstrong: Surely, a fair question. It will be admitted by the Minister that 'it has been promised. The Minister promised that he would deal with it. Mi% iSoates: When did I promise that? Mr. Armstrong: I understand that last year it was deferred till this year; that's tantamount to a promise that something will be done either one way or the other.' It appears to be that the Minister knows that he will not be here to complete the job. Mr. Armstrong said that the fund would be actuarially sound if the Government ■ had paid in the amount it had contracted to pay. Mr. • Coates: Do you favour the retention of the superannuation fund? Mr. Armstrong: Certainly, ■ and we hope that the Labour Party will be able to .do something better than the Government. We will bring all workers in. . , . Mi% A. Harris (Government, Waitemata) referred to. the retirement of railway servants before their full service had been completed, and said that many had suffered very grievous hardship. The House was of the opinion at the time that reasonable superannuation would be provided for them, but the actual- fact was that the amount was reduced to a very considerable extent. If the men had completed 35 years' service they would have received l-60th for.eyery year of service; quite,a number .with. 34 years', service were retired, and. the, actual payment was much less—about a third—than if they had put in one-more year. He contended that the arrangement made originally with the railway servants was inviolable. The men felt that it was a definite contract, and that in. no circumstances could ■ their rights ■be imperilled in any degree. He quoted the case t>£ aman-who, after 30 years' service, had been retired on a pension Of; £&l; had'he received the l-60th he _was entitled to he would have received £134. Similarly, another railwayman with 30 years' service received £81 instead of the £134 he should have got if the superannuation .had been based on l-6Qth for each year of service. He said that it was estimated that the sum of £6100 would make the necessary adjustments, and it had been suggested that the Railway Department could provide, this. "WILL BE CARRIED OUT." The Minister- of Finance (the Et. Hon. J.. G. Coates) said be was amused to hear the Leader of the Opposition ask what the Government' was prepared to do, and then to say that it did not matter very much, as the Government would mot be here next year. "Be that as it may," he continued, "in last year's Budget the policy of the Government was very clearly indicated. The obligations that rest on the Government will be carried out in their; entirety— that was clear in last year's statement.' I believe the issue is whether jt is worth while to retain the superannuation, funds. Last year I indicated that, legislation would be brought down this year,, but for various x^easons % hag ao! |j S sa sossiMe ip

prepare that legislation. It is necessary that we should have a complete valuation of the funds and income in order that we might base our proposals on the latest information. I do not think that it matters very much as far as the civil servants are concerned whether the legislation is introduced this year or next year; they know that the Government has said that it is prepared to meet its obligations. It is a moot point—and this is purely my personal opinion—whether the superannuation fund should be retained in its present form or not. The Government has guaranteed superannuation. Mr.'Savage: Guarantee is a good word;" Mr. Coates: Well, let us say assured. The Minister continued, that the question of the economic administration of the fund was concerned. There were a number-^- sof superannuitants who were in favour of retaining the fund in its present form, but he was not. It might, be necessary to alter the future position so far as superannuation was concerned, but that would not affect anyone who was "at present employed in the Civil Service. It would not be unfair to say, however, that future .entrants should be on some other basis. "It is a matter for very close inquiry," said-Mr; "Coates, "tp see if-the present system should be continued. It is quite open .for; .the Government to. consider that some alternative system should be introduced' and applied" to future entrants." •"- ' " '' " "■" ' ' "FULIY AWARE." Coming to the question raised by Mr. Harris, the Minister said that the figure of £6100 quoted by the member for Waitemat'a was correct." For the whole of the service the amount would be more—probably £9000 or £10,000. While the Government was anxious to help these men and was very sympathetic towards them, there Were difficulties, in the way. One. that had been ignored by the Opposition speakers was the question'of Where' the resources were to come from. As Minister of Finance he had little liberty with the spare cash. The matter had not been met with a distinct "no." The Government was fully aware of the position. "i know that it has been said that

the Railway Department can find the money for the men retired from that service," added Mr. Coates, "but when the Railway Department looks to the Consolidated Fund for its interest, it is tantamount to asking that the money should be taken from the Consolidated Fund. The whole question is now before the Government, and we will be able to inform members later. I regret that I have not got a Superannuation Bill this time, but it has not been possible. Every consideration, however, has been brought to bear on the present position." Mr. H. G. R. Mason (Labour, Auckland Suburbs) said he thought that there should not be a fund. Mr. Coates: I agree. "FEARING THE WORST." Mr. Mason said that the civil servant was in doubt as to where he was; and naturally was fearing the worst. It was felt that the position should be clarified by the Government. If it was unnecessary to have a fund, why was the Government so inconsistent as to say that it could not do anything for other people unless it had funds? "I believe the Minister of Finance has added much obscurity to a position that is already very obscure," said Mr. Mason. ■ • Mr. Coates: It is only a lawyer who can get thoroughly boxed up. Mr. Mason: I am going to tell the Minister that he has not removed the fear.of tlie civil servants. Mr. Coates: The civil servants gave very strong. indication that the fimd should remain. Mr. Mason said he found it difficult to reconcile some of the statements made by the Minister. The Government's policy seemed to be incoherent. What they could pay civil servants in twenty years' time depended on the country's production in 20 years' time. The idea of the fund seems to be that if we starved ourselves now we might, by some magic, produce wealth in twenty years' time. The idea of a fund was an absurdity; we wanted no funds.

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