Evening Post. TUESDAY, SEPTEMBER 21, 1943. SECURITY CLAMS AND REALITIES

Evening Post, Volume CXXXVI, Issue 71, 21 September 1943, Page 4

Evening Post. TUESDAY, SEPTEMBER 21, 1943. SECURITY CLAMS AND REALITIES

Extravagant claims have been made by Labour speakers during the election campaign regarding Government achievements under social security legislation. An endeavour has been made to create two impressions—that Labour was first in the field in New Zealand with schemes for social betterment and that unless the present Government is returned to office next Saturday there is a danger that many of the benefits now conferred will disappear. It is desirable that the public should have a clear understanding of the true position. State assistance for the less fortunate members of the community dates back many years before the Labour Party was a political force in this country. Before the turn of the century Sir Harry Atkinson, who has never been accused of having radical inclinations, was convinced of the necessity for making provision for the aged and infirm. He planned but could not bring into operation a generous scheme of contributory pensions. Old age pensions were instituted by a Liberal Administration nearly forty years ago, and since then they have been continued and extended by 'successive Liberal and Reform Governments, who instituted other pensions, family allowances, and similar benefits. The claim that it has been left to a Labour Government to bring social security to the people cannot be substantiated, any more than the claim that it is necessary to return Labour to office in order to retain the existing benefits. On numerous occasions Mr. Holland has pledged the National Party to a continuation and, in many desirable ways, an extension and adjustment of the existing scheme.

Labour spokesmen, too, have claimed with pride that other countries, notably Great Britain, are accepting the New Zealand social security plan as a pattern for plans of their, own. It is a case of making use of the old business slogan: "We lead; others follow." Naturally other countries that are studying the problem of social security will study what has been done in New Zealand, but to suggest, as Labour has suggested, that the Beveridge Plan, for instance, is a replica of the New Zealand plan is clearly without warrant. There are marked differences between the two schemes. In New Zealand the contribution varies according to the income of the citizen; fhe Beveridge Plan proposes "a flat rate contribution, rich and poor paying the same contribution for the same security." "Security" is defined as "a flat rate insurance benefit irrespective of the amount of earnings which Were interrupted by unemployment o/\ disability or ended by retirement." In New Zealand the receipt of monetary benefits, except for the token universal insurance, is determined by a means test so that in effect the citizen who contributes the maximum amount by what is virtually a double income tax is liable to receive the minimum benefit. The existence of a means test in New Zealand has resulted in all kinds of anomalies. There is. for instance, the penalty which the scheme imposes on thrift. People who make their own provision for their old age, either by insurance or other investments or by paying into superannuation funds, do not escape any contributions, and in a number of cases are called upon to pay other forms of taxation at penal rates. Yet when they reach the retiring age they are debarred by the means test from 'receiving full social security benefits. The only age benefit to which they are entitled without question is the limited universal superannuation payment, which does not become due until the age of 65 as against 60 for/the ordinary age benefit.

Until these and other anomalies are removed the social security scheme, while beneficial to many, must be a penalising drag on others. Labour has suggested that the scheme is in jeopardy if the National Party is returned to office, but it is the National Party that has submitted to the electors ways and means of gradually overcoming the anomalies /that now exist, while guaranteeing to continue the present benefits. There are other respects, too, in which the claims of Labour speakers for the scheme are exaggerated. Take the case of hospital benefits. It is true that those Vho enter public hospitals pay no fees. The cost, up to the fate of 9s a day (until recently 6s) is paid from the Social Security Fund. But this falls far short of meeting the full cost to the hospital boards, and the balance must come from the Consolidated Fund j (from taxes) or from rates. In. both cases the taxpayer—-and there are few who are not taxpayers today—has to foot the bill. And it should not be overlooked that prior to the introduction of; the social security legislation the daily charge for public hospital treatment- for those who were in a position to pay was most moderate and covered all surgical and similar services. Many people today are probably paying through the Social Security Fund much more than they save by the cancellation of this charge. These facts should be remembered when extravagant claims are made regarding the benefits which the scheme confers and when attempts are made to convey the impression that the public are getting something for nothing. Some are "certainly getting more than they pay for; but others are paying for more than they get.