COST OF SOCIAL SECURITY.

Evening Star, Issue 25617, 18 October 1945, Page 4

COST OF SOCIAL SECURITY.

After ten speakers had taken part in the debate on tho Social Security Amendment Bill the Minister of Finance gave the House of Representatives last night the first official information about the cost of the new liberal scale'of benefits and the universal child allowance which will begin on April 1 next. , The delay in proffering these vital facts provides considerable basis for the Opposition charge lodged last week against the Government of trifling with the House. Mr Nash's statement is not yet completely satisfactory. Ho would not give any indication of the Government's proposals for finding the money. It can only bo assumed that the increases in this year's estimated expenditure . compared with last year's actual results represent largely the cost for half a year of the new scale of benefits. The Minister now estimates the cost of social security for the present year to be roughly £23,000,000, compared with £19,332.000 last year,' an increase of about £3,375,000. This suggests that in a full year the proposed scale will cost about £26,500,000. In the next financial year the universal child allowance will operate, costing, on Mr Nash's statement, an additional £7,000,000, bringing the total charge for social security to roughly £33,500,000. The estimated revenue lor the present year is £21,500,000, so that in-the year beginning April 1 next tho taxpayers can expect to find an additional £12,000,000. Not a few wage and salary earners who, after all, will provide the bulk of the revenue required to finance the new proposals, will be anxious to know how the Government proposes to take the extra money from one pocket to put it back into another. Mr Nash gave some hint of the Government's policy in financing social security when he said that it was a long-held view of tho Government, and also that of the actuary, Mr Maddox, that half of the cost should come from tho Consolidated Fund. Last year, direct social security taxation produced nearly £14.500,000. It is scarcely to bo expected that that amount will be exceeded to any considerable extent—Mr Nash has not budgeted for any increase—and so a gap of £4,000,000 is in sight during the coming financial year, even if the direct taxation is subsidised by an equal contribution from the Consolidated Fund. In other words, the social security charge must be raised if the required amount is to be found, even on the basis suggested by Mr Nash. Government speakers have been careful to remind the that production must be maintained if the new benefits are to be maintained. Tho weakness of the policy of launching out on a vast expenditure for social services is to be found in the uncertainty of the immediate future. Although the national income will be swelled to some extent by the absorption back into civilian employment of men now in the services, it will be at the expense of some of the abnormal overtime which has been worked during the war. While declaring that its policy is full employment, the Government "does not seem to have taken into consideration the charge that will fall on State funds if it is not possible to find employment for all. Any lessening in the volume of employment would cause the double embarrassment of a shrinkage in revenue for social security and a greater drain on the funds. On all hands new forms of State benevolence are being visualised, and the Government has not yet given any indication of the possible cost of the home aid service announced last week. While other countries have been prompt to givo tax relief -at the end of the war, itcan only be concluded that Mr Nash does not intend to relinquish readily his present swollen revenues.