SOCIAL SECURITY

Evening Post, Volume CXXXVIII, Issue 84, 6 October 1944, Page 7

SOCIAL SECURITY

TAX-FREE SERVICEMEN

The reasons why all servicemen in New Zealand, as well as overseas, do riot pay social security tax were given to the House of Representatives yesterday afternoon by the Minister of Finance (Mr. Nash). The Estimates of the Social Security Department were under consideration, and the Minister remarked that it would be wise to make' the explanation at an earl"y stage. .

The original idea, said Mr. Nash, was to exempt those who went overseas, but the outlook changed when New Zealand itself became a war zone.

An Opposition member: Now if is not a war zone, will you cancel it?

The Minister replied that permanent members of the Forces paid the tax, but if they elected to go on the overseas scales of pay they were exempted. The matter came to a head* first when some Sherman tanks were sent to New Zealand, and the authorities selected seven or eight men from the New Zealand Division, who had been in action with these tanks, to return to the Dominion to train men in their use.. Should their incomes be reduced, asked the Minister, because of their special qualifications? Mr. D. C. Kidd (National, Waitaki): What about the others?

The Minister: This country was a danger zone. How could you differentiate between men here and those in Noumea or Fiji?

Mr. Nash added he would agree that it was not fair in the general run of things that one man who served as a clerk in an Army office should be relieved of taxation while another man alongside, doing the same kind of work, was taxed because he was a civilian.

Opposition members: What are you going to do about it?

"I am anxious that someone should show me the way," replied the Minister, whose answer was greeted wrth laughter. Mr. Nash pointed out that they had also to consider the man who had gone overseas and returned. When the time was right and expedient to- readjust taxation it would be done.

Mr. W. 'A. Bodkin (National, Otago Central) said he could not accept the Minister's explanation. The House had been informed that members of the Services would not be called upon to pay social security tax. It now discovered that this was a decision of War Cabinet and that a transfer had been authorised from the War Expenses Account to the Social Security Fund to cover the amount involved. Parliament should haye been asked to approve that transaction, because Parliament was supposed to control the country's finance. If members of the Service fell ill they were treated by Army doctors and attended by Army nurses in the Service hospitals. The whole business was nothing more than an attempt by War Cabinet to bolster up the Social Security Fund out of War Expenses. Mr. D. W. Coleman (Government, Gisborne): What, about the soldiers' wives and families who get benefits?

Mr. Bodkin: If there was a case for payment, surely the House should have been asked to sanction it, but the functions of Parliament have been usurped by a War Cabinet minute.

The Minister of Health (Mr. Nordmeyer) said that the mothers, wives, and families of servicemen were still in need of the benefits of the scheme, therefore there was nothing improper in the State paying the amount the soldier would have paid if he had been in civilian life.