Evening Post.
"No one will be placed in a worse position than they are at present" was the assurance given by the Prime Minister yesterday when questioned as. to the effect of the Government's proposals upon persons in existing superannuation schemes. iMr. Savage recalled his repealed assurances that the rights of superannuit'ants and contributors, under present schemes would be safeguarded. We have no doubt that this .expresses his intention,' but the scheme, 4s so far made known, must definitely place persons in receipt of superannuation in a worse poi&ition than they are now. Tfyey will be required to pay part of the cost through the wages tax and general taxation; and, as their income from their own superannuation scheme will be more than fl a week, they will be ineligible for the national pension, or will receive.only a small part of Mr. This may be overcome in one of two ways: by exempting superannuation income from the definition of income under the new -plan, (as National Provident Fund annuities and some, pensions are exempted), or by exempting members, of existing superannuation schemes from the taxation. But either way, while meeting the case of public servants and others! covered by superannuation, would give rise to a greater injustice. There are many thousands of people in New Zealand with, moderate incomes who ai;e ineligible for existing schemes, because they work in small units or are their own employers or, for other reasons. : Such persons would be only too pleased to join a superannuation scheme and share its benefits, but as i they cannot do so they must make provision for themselves by insurance qr other forms of saving and investment. \Now their capacity to do so will be lessened by the demand made upon them for contri-j buttons to, make provision for other people. And to -the extent that they| may, still succeed in providing for| themselves they will be shut out of the benefits. It will be unjust if persons in existing schemes are compelled to contribute to the new plan and barred from its benefits;, but it will be a .still greater injustice if the, participants in aided State and! public body schemes are exempted; and private persons are not. On the latter class there will be treble hardship: reduction of interest on their investments, heavy direct contribution to the State superannuation plan, and heavy taxation to provide the State subsidy on contributions. For such unequal treatment we are aware of no precedent, in any major contributory scheme elsewhere. The Australian proposals are for contributions from a limited income class. Other persons are to be excluded fjom benefit and exempt from contrißution. Pensions and contributions will be on a flat rate. In Great Britain contributions are also on a flat rate and pensions are payable without a means * test. In America there is a percentage tax and a graduated pension, but the tax is levied on a limited amount of the income—the first £600. The pension varies according to the scale of contribution. The scheme, is heavily loaded in favour of those with small incomes, and those advanced in years. They receive more than they pay for. Also, the pensions are retirement pensions, not payable to persons who prefer to continue working, but there is no mention of a means tesL Thrift is not penalised. In various European schemes there are percentage con,-, tributions, but, so far as we are' aware, the amount of income cm which, contributions are paid is limited and pensions are graduated. The only discrimination is that the lower pensions receive fulf benefit from State subsidies and the higher receive little or no subsidy. Against this principle no objection can. be raised. It would apply in any scheme where there was a Government subsidy,'since the funds from which a subsidy is paid are derived from taxation levied according to ability to pay.
The"expert investigation committee which made the initial inquiries before the Government scheme t was prepared no -doubt had full information regarding schemes in operatiion elsewhere. Can the Government produce from this information anything to justify its own unequal plan? v If it cannot, the conclusion to be drawn is either that other countries are proceeding on socially unjust lines or that the New Zealand plan has been varied from sound principles to satisfy a political demand. Such variation would be deplorable. The principles governing the British and Australian plans, and, in a different form and measure, the American system, have not been laid down without reason. They are framed to safeguard the socially desirable qualities of thrift, providence, and self-reliance and not to discourage them. In establishing our New Zealand scheme .we must also give some attention to these qualities. We cannot disregard them without grave risk to national stability. If we make a start upon ■ wrong lines it will be difficult, even impossible, to introduce later a desirable correction.
The Government at one time ap
pearcd to have a different intention. In September, 1936, Mr. Semple said:
Within the next twelve months we are going to prepare a Bill for next session that will do away with' all kinds of charitable outfits and create a national superannuation for everybody.
Speaking on the second reading of the. Pensions Amendment Bill, 1936, Mr. Parry stated that a Committee had in hand preparation for a nationals superannuation system.
A national system of superannuation, he declared, is the only /means by which we can embody the rights of citizenship in the pension laws of our, country. So that when the age defined in the Bill or in the. superannuation scheme is reached, whatever that age may be, the citizens reaching it will automatically, whether rich or poor, be entitled to receive the pension orsuperannuation—not because they are 'poverty-stricken, but becausp .they have the right as the result of their citizenship.
The scheme produced does not follow these lines. It provides generous benefits for those who satisfy the new means test, but-for'the rest the right of citizenship is just to pay more heavily fq'r- the ' benefit of others. , There is generosity for some, but not equality for all. '
Permanent link to this item
https://paperspast.natlib.govt.nz/newspapers/EP19380405.2.77
Bibliographic details
Evening Post, Volume CXXV, Issue 80, 5 April 1938, Page 10
Word Count
1,020Evening Post Evening Post, Volume CXXV, Issue 80, 5 April 1938, Page 10
Using This Item
Stuff Ltd is the copyright owner for the Evening Post. You can reproduce in-copyright material from this newspaper for non-commercial use under a Creative Commons BY-NC-SA 3.0 New Zealand licence. This newspaper is not available for commercial use without the consent of Stuff Ltd. For advice on reproduction of out-of-copyright material from this newspaper, please refer to the Copyright guide.