STATE MONOPOLY

Hawera Star, Volume L, 19 June 1930, Page 5

STATE MONOPOLY

W OR-KERS’ OOMPENSAT(I ON INSURANCE. NOT NEEDED IN DOMINION. (Special To Tlie Star.) WELLINGTON, .Line 19. Tlie Royal Commission which Inis investigated the operation of the workers’ compensation for accidents legislation in New Zealand has come to the conclusion that there would be no real advantage if the whole of this class of insurance was conducted by tlie State. It lias been suggested that if one organimation did all the business the resultant economies would enable greater benefits to be paid, but the commission is more than doubtful, as there would be corresponding disadvantages to the public. . The National Industrial Conference of 1928 suggested to the Government that the Ontario system of State insurance should be examined, and the present commission, whose report has been handed to the press by its chairman, Hon. S. G. Smith, Minister of Labour, devoted much time and attention to the subject-.

PREMIUMS AND PAYMENTS. The history of workers’ compensation insurance in New Zealand i-s one of extending benefits, which the report traces. Finally, in 1926, some- additional benefits were provided by legislation. with the understanding tnat these could be met out of tlie margin between premium income and expenses, including claims. The insurance companies’ margin for “overhead” at that time was 37 per cent, of premium income. “Up to tlie present,” states tlie commission, “we understand that the estimate of additional cast lias not yet been reached, and the latest expeiience figures show that claims under present legislation are costing on tlie average about 71 per cent, of premiums, leaving 99 pGr cent, to the insumnee oflico foP working expenses, etc.” It- is represented that for the margin mentioned, the offices not only cover tlie risks, but also provide a convenient organisation throughout- the Dominion for effecting insurances and settling claims, ancf that the employers and workers have become- accustomed to this organisation as a result of relying on its operation for 29 years.

OTHER COUNTRIES’ MARGINS

The commission explains that m Britain a somewhat higher rate than 30 per cent, was allowed the companies for expenses. Queensland lias a State monopoly of workers’ compensation insurance, and its expense rate is 15.6 per cent. The 'Ontario system is not strictly comparable with that of New Zealand, for the commission is able to detail a. large number of smaller industries and factories employing less than six workers who do not come under the system. Ontario does not impose the liability lor compensation on fanners, employers of domestics, or small employers. Finally, the commission expresses this opinion: “Tlie evidence lias satisfied uts that there is effective control of rates in New Zealand through the State Accident ' Office, and that the margin in premiums allowed for working expenses, profit and reserves is probably lower than any competitive system elsewhere.”