INJURED WORKERS

Evening Post, Volume CXXII, Issue 99, 23 October 1936, Page 9

INJURED WORKERS

COMPENSATION BILL

MR. HOLLAND'S ANALYSIS

INCREASED COST

The cost to the people of New Zealand of the provisions of the Workers' Compensation Amendment Bill was going to be £50,000 or £60,000, declared Mr. S. G. Holland (National, Christchurch North) in the second reading debate on the Bill in the House of Representatives yesterday -afternoon. That, he added, was in line with the policy of the Government. Its policy was to increase costs although, that was diametrically opposed to its election promises. Mr. Holland said that in thepresent legislation there were many anomalies that called for review, and he.appreciated the difficulty of the Minister of Labour (the Hon. H. T. Armstrong) in not having sufficient time for a comprehensive measure to be introduced and passed this session. One of the most important provisions of the Bill was that employers who employed workers other than for pecuniary gain were made liable for compensation, and casual workers .were brought under the Bill. A large number of employers would be affected by the Bill and he suggested to the Minister that he might consider advertising it to a reasonable extent so as to make sure that all those people brought under its provisions were made aware ef the fact. It might be possible for a person to be involved in an expenditure of £1000 and not be aware of the fact until a prosecution was launched by the Labour Department. After approving of certain provisions of the measure, Mr. Holland said that in the case of share milkers it was possible for the amount of the compen-. sation to be equal to the amount of the wages received, because the compensation was to be based on twothirds of the basic wage for industrial workers and not two-thirds of the wages provided in the Agricultural Workers' Act. Mr. Holland suggested that the provision that compensation should rank with wages in claims against bankrupt estates should be extended to include cases where private assignments were made by firms. THE POSITION IN QUEENSLAND. The Minister, he said, had quoted the position in Queensland, but had not told the whole story. When asked if losses had been made under the workers' compensation system ■in Queensland, the Minister had dismissed the matter by saying, that there had been some small losses. Actually in the four years from. 1932 to 1935 the total premium income in Queensland was £1,300,000, and the total amount paid out in claims was £1,361,000, while working expenses had amounted to £220,000. The total payout , was £1,581,000, and the total loss made on the operation of the Workers' Compensation Department was. no less than £277,000—an average of £69,000 a year. . The Minister replied that for twenty years no losses were made, but there were substantial surpluses, and the losses of the last four years.were paid out of the accumulated profits. The operating costs in New Zealand, said Mr. Holland, were less than in Queensland, where there was a State monopoly. The Hon. A. Hamilton (National, Wallace): That's the stuff to give them. Mr. Holland said the Opposition did not object to the Bill: on its merits, but did object to being misled arid told only half the story by the Minister, in New. Zealand, of each £100 of premium income 71.39 per cent, went to the workers, and 25 per cent, in working expenses, a large proportion being absorbed in salaries and wages, and there remained the magnificent amount of 3.1 per cent, as profit to the insurance companies. But the insurance companies were not complaining about that. "Last night," continued Mr. Holland, "the Minister, with that capacity for which he is famous, picked out a long schedule of rates for.workers' compensation. I have had a look at those rates, and it is obvious that he picked out those that suited his own case. A comparison of premium rates is difficult, and the Minister recognised that fact. The cause of the difficulty is that the cover provided does, not necessarily mean the same in Queensland as here, and there are different classifications and benefits. The Minister mentioned quarry workers, and pointed out that in Queensland the rate is only 80s per £100, whereas in New "Zealand the rate is 120s. He forgot to say, however, that quarrying is only a small industry in New Zealand, and tlfat the wages bill here is only £237,000 for a period of three years." THE CLERICAL WORKERS. Mr. Holland said that the clerical workers in New Zealand received no less than £11,000,000 every three years in wages. He did not pick out an item involving wage payments of only £237,000 as the Minister did. He p^re- ' ferred to take an item like the amount paid to the clerical workers. "The rate for them in Queensland," he said, "is 4s per £100, while the- rate in this country is exactly Is per £100. Let us assume that the employers of clerical labour in New Zealand had to pay the san/; rate as is paid in Queensland —the Minister's selected State. If New Zealand employers had to pay that rate they would pay to the .insurance companies the sum of £22,000 every three years. The New Zealand insurance companies provide the same amount of cover, but receive only £5500. Yet the Minister tries to-hold up Queensland as a model State so far as workers' compensation is concerned, and by his argument he is advocating that New Zealand employers of clerical labour should pay £16,500 more than they are actually paying now. "Again, I wonder why the Minister did not give us the rate in respect of drapers. That would have been an interesting one, because in New Zealand we pay more than £2,000,000 every three years in wages to drapers, and if he had told us that in Queensland the rate was 4s 6d, one would naturally have asked what the rate in New Zealand was. He did not tell us the latter —that was. not marked in the margin of his list. Well, the rate in New Zealand "is only 2s per £100— . less than one-half the rate in Queensland. "Also, I wonder why the. Minister avoided reference to the rate in respect of printers. In Queensland the rate is I3s 6d per £100, while in New Zealand it is only Bs. Ido not think it is difficult to find an answer to the question, 'Why did the Minister not quote these figures?' n The Minister: I wanted to leave something for the hon. member to quote. MAXIMUM COMPENSATION. Dealing with the question of benefits, Mr. Holland went on to say that the minimum compensation in cases of death in Queensland was £300. and it was the same in New Zealand. But what about the maximum compensation? That was another item the Minister left untouched. The maximum in- Queensland was J&eCKV -though

he believed that in one or two cases it might be £750—but the latter was the absolute maximum. The maximum amount in New Zealand was £ 1000. Mr. Holland said that New Zealand was now increasing its minimum compensation for death to $500. The natural sequence to an increase in benefits under the compensation law was a substantial increase in the number of applications. "If the Minister had taken the per capita cost of compensation for Queensland and New Zealand, he would have had a very interesting story to tell," he continued, "because he would have had to say that the per capita cost of workers' compensation insurance in Queensland was 7s 2d, while in New Zealand it is only 4s 6d." Mr. Holland added that if the adoption of a State monopoly of this insurance were decided on by the Government one of. two things must result: either the companies would have to reduce greatly the numbers of their staffs and dismiss men, or there would be a higher cost for other kinds of insurance. The extra cost to New* Zealand through the Bill was going to be £50,000 to £60,000. TOLL FROM WORKERS. Dr. D. G. McMillan (Government, Dunedin West) said that the benefits were greater in Queensland, hence the higher premiums. He quoted the dividends paid by the Standard Insurance Company, the New Zealand Insurance Company, and South British Insurance Company, saying that the profits made by those companies were made possible by the exploitation of those who paid the premiums and those who were injured. A great toll had been extracted from the workers. Mr. W. A. Bodkin (National. Central Otago) said that the companies doing business in New Zealand had been prudent over a long period •' of years and had built up reserves, and a great factor had been the interest-earning capacity of the sums. invested. Many insurance companies ■ were- nearly put out of business owing to the San Francisco earthquake. It was necessary for the companies to have substantial reserves, and that policy had been carried out by most of the New Zealand companies. He quoted figures to show that the worker in New Zealand had in reality-larger benefits in the aggregate than the Queensland workers. The profitable business to insurance companies was fire and marine. He knew ol no company that refused to insure an employee in industry. Every claim was settled on expert evidence and medical testimony. Mr. Bodkin said the Minister would have to go further and devise ways and means to bring about the compulsory insurance of workers in business on their own account, such as taxidrivers owning their own vehicles. The •share-milker' would also have to be considered. He was not much concerned about industry having to pay the increased cost. If it was not born c by industry it would be borne by the Consolidated • Fund. In the final analysis *it would be found that the consumer paid. There was no doubt that the position would be much clarified by the new basis for computing compensation. The Arbitration Court would be relieved of hearing many cases as a result, and much contentious argument would be obviated. EFFECT OF STATE ENTERPRISE. Mr. A. S. Richards (Government, Roskill) said that the existence of the State insurance made for more liberal treatment by other insurance concerns. It had saved premium payers thousands of pounds, and it had caused far less difficulty to injured claimants. Mr.'Bodkin: It is just as difficult to deal with. . - ~. Mr. Richards: No,.it is riot. Mr. Bodkin: That has been; my experience. Mr. Richards said that me State insurance had Served the public in a more beneficial way than any private institution. A few years ago, before there was State enterprise in the insurance business, the public was in danger of ibeihg robbed of the major portion of its premiums. In reply, the Minister said that there had been a certain amount of helpful criticism for which he was thankful. No one, however, had expressed any opposition to the Bill, and he was beginning to wonder whether he was doing the right thing or not. TouchIng on one or two of the points raised by Opposition speakers,-Mr. Armstrong said it was almost impossible to form anything like an accurate estimate of What the Bill would cost the premiumpayers of the Dominion, because there was no general increase. He had said in his opening speech that the underwriters had estimated it at. 14 per cent. That would be the maximum, but he doubted very much whether the increase would be as high as that. Mr. Armstrong said he- agreed that there was room for a thorough overhaul of the compensation law in this country. He had had in mind a comprehensive Bill on this matter, but it was considered too big to bring down in the dying hours of the present session and he thought it was wise to introduce the present legislation only. He hoped, in the not far distant future, that there would be no need for workers' compensation. He hoped that there would be free medical attention for the less fortunate, the cost, being met out of a common fund. The responsibility should be the State's, and he thought that the day was nbt far distant when they would be discussing something of that nature. The Bill was read a second time, and after a brief discussion in committee, it was read a third time and passed.