SOCIAL SECURITY

Evening Star, Issue 25617, 18 October 1945, Page 3

SOCIAL SECURITY

Added Benefits Will Cost £9,000,000 Universal Benefit Bulks Heaviest Later Bill Will Apportion Sources (Special.) WELLINGTON, October 18. The additional benefits provided in the Social Security amendments now under consideration in the House of Eepresentatives would cost, in a full year, about £9,000,000, stated the Minister of Finance, when he spoke on.the second reading of the measure last night. He mentioned that £7,000,000 of that amount was required to make the family benefit universal on the new scale after the end of March of next year. The Minister, explained that it was proposed to adjust taxation revenue, or the incidence of taxation, in a later Bill this session to determine from where the £9,000,000 would come. It would be asked where would the benefits come from. He was completely in agreement with the member for Tauranga, Mr Doidge, on the question of production. It was no use talking about a social security scheme unless there was a production scheme as its foundation. Money was only production expressed in figures, unless, of course, there was inflation. " We believe also," added Mr Nash, "that, while the benefits •will £ake some providing for, there are latent resources in this country that can add to its wealth to an unthought-of degree within a reasonable period of time. It is only through the use of those latent resources that we can give these things that are so necesary to give effect to the Employment and Security Bills.

the Bucket Analysis

The Minister pointed out that the Budget presented early in August contained details of the monetary benefits under social security, which were set out as totalling £16,571,000. The additional cost which the House was discussing was due to two things. One was the extension of the family benefit procedure to entitle a person to benefit on income up to £6 10s instead of the former £5 10s. There was also mentioned in the Budget the payment of the a<*'e benefit to an under-age wife or a-beneficiary of £1 per week, but that sum was now being increased to £2. There was also the war pensions adjustment in the legislation. The extra cost

of the first two benefits mentioned was £454,900, which meant that the Budget Estimate of the monetary benefits was being increased to £17,025,000. " I think the family benefit will be somewhere about £400,000, and the age benefit , extension something under £85,000," added the Minister. These figures, he repeated, were to March 31 next. Mr Doidge: But it is more than for the current year.' How are you going to finance the full scheme? The Minister replied that extra expense was £1,534,900, but as the opening balance of the fund was £2,389,702 there was still a balance of £864,802.

Family Benefit Portion

Speaking -of the family benefit, the Minister said that there were 480,500 children under the age of 16 years, so that meant an expenditure not far off £12,492,000. The evidence available m regard to non-exemption of children

suggested that the State would get £2,250,000, so that the net increase in cost of the universal family benefit would be £7,092,000. It had always been said that that would be between £9,250,000 and £9,500,000.

Tax Exemption For Wife

, In regard to the alteration in taxation procedure, which he hoped to provide for later, it was proposed to give exemption of £IOO for wife and cut off that ! exemption when the total rehate was £26. That was necessary, because there were people paying 18s in the £ taxation—lss 6d on income tax,

and national and social security taxes of 2s 6d. Otherwise the extension of ' the exemption for the wife would give those on the higher income level a rebate of £77 10s instead of the present £3B 15s - ,- ™x- , -a In reply to a question, Mr IS ash said that the extension of the wife's exemption would cost about a million pounds.

Facts Deliberately Withheld

An emphatic .protest against the Opposition being asked to debate the Social Security Amendment Bill without a full, frank, and unequivocal statement being made first concerning the costs of additional benefits and how they were to be financed was made by Mr J. W. Doidge (Nationalist, Tauranga). Mr Doidge did not speak for the full half-hour allotted to him, stating that his Teason for not doing so w.as that he was making his speech one of protest. He was immediately followed by the Minister of Finance, Mr Nash. Mr Doidge said it already had been made plain that the Opposition approved the principles of the Bill. The position could not be otherwise, because the provision of a universal family allowance had for long been foremost in the platform and policy of the National Party. (Government laughter.) His purpose was to enter an emphatic protest against the manner in which the Bill had been presented. The question naturally arose as to what the scheme would cost and what new forms of taxation were to be designed to meet the cost; and those facts had been withheld and deliberately hidden from the Opposition. The result was that the Opposition could only guess at the cost, and the Opposition believed

that the cost of the universal family benefit would be at the very last £12.000.000 a year If to that were added the existing costs, plus the cost of the increased benefits proposed by the Bill, the people of New Zealand would be committed to an annual cost of well over £40,000,000, or something approaching £1,000,000 a week for social security benefits. The Opposition was prepared to stretch the plan of universal family benefits to the limit of State liquidation, but it was because the Opposition wanted to be assured of the solvency of the Government plan that it should not be asked to sign a blank cheque. The Social Security scheme could only be financed out of production and profits'. Little thought was given by the Government to production, and, in the words of the Minister of Social Security, the pools of profit were to become smaller and smaller until ultimately they would be dried up. It would be hard for the Minister of Finance if he had to make a confession that the scheme was to be maintained by perpetuation of the national security tax, said Mr Doidge, because the Minister had said that that tax would operate only for the duration of the war. But if that were the, explanation, why funk it?

Explanation Not Clear

"How /can we debate a proposition aud give to the public the benefit of such judgment as we have if all 'we get is an outline of a group of benefits which the Minister of Internal Affairs, Mr Parry, said made him feel ecstatic ?" asked Mr R. M. Algie (Nat., Kemuera), when he followed the Minister of Finance. He did not think anyone could say that the explanation given by Mr Nash was a clear one, although it was conceivable that if the Minister had cared to do so he could have given in 15 minutes a very simple explanation of what was involved. His personal inclination would be to vote tor the Bill because of its ethical idealism. He was entitled, however, to know the cost. If he could be reasonably assured that it was within measurable grasp of the people he must vote for the legislation. If, on the Other

hand, he was left in the position that he was not clear what the cost was to be, or whether it could be met. he would have to say he could 'not sign a blank cheque. " Of course we can afford it," said Mr P. G. Connolly (Govt., Dunedin West). He asked Opposition members how were they going to vote on the Bill seeing they had said it was uneconomic and unsound. If they really believed that, they would hare to vote against the measure. Opposition member: Who said that? Mr Connolly said every member of the Opposition had conveyed that impression to the House. Although there were still some means tests in the legislation, those on the Government Ride lived for the day when these would all be abolished, and people would enjoy the prosperity brought about by the productivity of the countrv.

A Belated Benefit

New Zealand was not the pioneer in the introduction of a universal family allowance scheme, stated Mr J. Acland (National, Temuka). Mr Acland, who has been a consistent advocate of the family allowance principle since he entered Parliament, claimed that the married man had carried more than his fair share of the burden of increased taxation and increased costs during the war. What he could not understand was why the Government had waited until the' end of the war to introduce the scheme. Members of the Opposition had pointed out that the existence of the means test in the provision of family benefits was a discouragement to people to do more work and increase their earnings. The removal of the means test would give the family man a fair deal. It would assist in the production of more goods. and everybody in the country would

indirectly benefit. It was hoped, also, that it might assist to encourage larger families. " I do feel," he added. " that if we give the family man a fair deal wp stand a good chance of having a larger population." It was necessary, added Mr Acland. that adequate provision should be made for the children, and therefore one particular section should not be singled out and penalised. The wages system, being based on the services a man rendered, did not take into account the number of his children. While it was necessary for the State to see that the father of a family was not unduly penalised for having a large family, it must be remembpred that the State could not, and must not. take over the complete responsibility of that family. They were the children of their parents, and not the children of the State.