SECURITY AND THE MEANS TEST

Evening Post, Volume CXXXV, Issue 31, 6 February 1943, Page 4

SECURITY AND THE MEANS TEST

In announcing in Christchurch last week that there are 260,000 people receiving benefits under the Social Security Act, the Prime Minister quoted Sir William Beveridge, the author of the British scheme, details of which were recently announced, as saying that it was interesting that the people of the United Kingdom should have the same kind of views and sentimentality towards insurance as New Zealand.. "That, I think, is one of the greatest compliments which has been paid to this country for a very long time," said Mr. Fraser. "Here is the kind of 'sentimentality' which makes the New Zealand plan of social security worthy of emulation in Great Britain. Canada, and Australia." And Mr. Fraser proceeded to elaborate the benefits which the public have received since the operation of the Act. It is true that in several respects the Beveridge plan resembles the New Zealand Act, and the Prime Minister is entitled to make the most of that fact, but, as we pointed out when the cabled summary of the provisions was published, there are some fundamental differences between the British and New Zealand schemes. There is, for instance, a difference in the system of contribution. Here everybody contributes in accordance with income at the rate of one shilling in the pound; in Britain the proposal is that everybody, rich and poor alike, will pay a flat rate contribution which will entitle everybody to the same measure of security—"a flat rate insurance benefit irrespective of the amount of earnings which were interrupted oy unemployment or disability or ended by retirement." In New Zealand there is a means test (except for universal superannuation which will not reach the maximum for some years); in Britain there will be no means test In a statement reported yesterday, ihe Prime Minister himself drew

attention to the existence of the means test in New Zeaiand. "We are noi going to promise that we are going to raise the benefits during wartime," said Mr Fraser. who added the definite statement that the age benefit would not be given without a means test. There were many things to which the State's money could be better given than to give the full age pension to men drawing a superannuation of £2000 a year, said Mr. Fraser. In order to establish his case, the Prime Minister made use of an extreme example. Persons receiving such an amount of superannuation as quoted by Mr. Fraser are few and far between, 'but there are many thousands of people who, by dint of sacrifice and thrift, have made a modest provision for their old age. It is these people who are being unfairly penalised by the operation of the means test. They have, in common with everybody else, made their full contribution to the security pool, but, because of their savings, they are either debarred from taking anything out of the pool or must be satisfied with a limited return. In the Beveridge plan there is no such penalty on thrift. In fact, it is that feature which has caused the greatest satisfaction among the people of the United Kingdom. The plan is typically British in that it gives expression to the resentment of the people at any provision which appears to penalise what people have come to regard as the duty and pleasure of thrift—putting pennies away for a rainy day. It suggests a scheme which leaves room and encouragement for voluntary action by each individual, and it is designed to encourage initiative and responsibility. Any scheme of national insurance which fails to do that falls short of achieving its real aim. In many respects the Beveridge plan follows the New Zealand plan; in other respects, notably on the means test question, it is well in advance of it.