Wage Tax Will Be Increased To 1/- To Finance Pension Plan

Northern Advocate, 29 March 1938, Page 8

Wage Tax Will Be Increased To 1/- To Finance Pension Plan

t Special To “Northern Advocate ”l WELLINGTON, This Day. rjplE GOVERNMENT’S SUPERANNUATION AND NATIONAL HEALTH SERVICE PLAN, WHICH WAS UNDER FINAL DISCUSSION BY THE CAUCUS OF THE LABOUR MEMBERS OF PARLIAMENT TODAY, REPRESENTS A POLITICAL DEVELOPMENT COMPARABLE IN EXTENT TO THE INTRODUCTION OF THE OLD AGE PENSIONS SCHEME BY THE RT. HON. R. .1. SEDDON. II is expected that the details of the scheme will be officially announced by the Prime Minister, the Rt. Hon. M. J, Savage at an early date. For several months the whole position has been thoroughly threshed out by two special sub-committees of Cabinet, which dealt separately with the health and superannuation aspects. They finally came together and brought down a co-ordinated scheme, which the caucus has been specially called to consider. If approved, it will form the basis of the scheme to be placed before the Special Select Committee of the House of Representatives which, on April 5, will assemble.to hear evidence from interested organisations and administrative bodies.

Immense Financial Obligation. These organisations’ opinions will be sought on the social welfare legislation, which Mr Savage declares is the most important humanitarian sdheme ever likely to be initiated, in New Zealand or any other country- Largely responsible for the long delay in bringing the scheme to its present stage has been the immense financial obligation involved, consideration of the amount of the contributoin and whether pensions should start at 60 or 65 years.. In its present form, the plan involves an annual expenditure cf between £16,000,000 and £17,000,000. How is this huge sum to be raised as it must be obtained from annual taxation, and not from the resources of the Reserve Bank?

In formulating their plans, the special committees contemplate the abolition of all subsidised relief works, such as Scheme 5, and in framing their proposals provide only for the payment of sustenance involving, in the aggregate, between £1,500,000 and £1.750,000 annually. Returned Soldiers Not Overlooked, It is also suggested that the special exemption under the ordinary income tax of £SO for each child up to 16 years of age be abolished and that a family allowance of 2/- weekly for each child paid instead of at an estimated cost of about £250,000. The returned soldier is not being overlooked, the proposal being that he should receive his superannuation at the earlier age of 55, and that economic pensions be increased from 25/ to 30/ weekly. In whatever form these proposals emerge from the scrutiny of the caucus and the Parliamentary Committee, they will become law during the coming session of Parliament, and the Government is credited with a desire then to make a prompt appeal to the country for endorsement of its advanced social welfare policy.

The proposal is, therefore, to increase the present Employment Promotion Tax of 8d in the £ to 1/ in the £, which is estimated to produce in the vicinity of £8,000,000 annually. Present Cost. The present social services are costing the taxpayer, according to latest figures quoted at Grey Lynn, Auckland, by the Under-Secretary in charge of State Housing, Mr J. A. Lee, £6,769,000. These two large amounts would still le'ave an apparnenli deficiency of ftiom £1,250,000 to £2,250,000 which wculd need to be provided from the Consolidated Fund.

The largest expenditure involved in the new plan is to provide a free health service for the whole community, and, as it is well-known that there are about 3000 doctors practising, and as it is understood that these, omitting specialists, will receive not less than £IOOO annually, the gross expenditure on this department will involve over £3,000,000. This will be inclusive of the present cost of hospital treatment. Nobody Left Out, It has been gathered from lobby discussion that the full scheme leaves nobody out, thus carrying out the Prime Minister’s expressed ideal that, while poorer people come first, every section of the community will be entitled .o benefit.

“While Sir Joseph Ward’s £70,000,000 scheme of 1938 was imaginative and captured the country, it was found to be impracticable,” remarked a Labour leader, “but I think our scheme will be equally imaginative and, at a-quarter of the cost, will be practical as well as satisfying.” The principal benefits under the scheme are understood to' be as follows; Old-age pensioners to lose this title and become superannuitants with pensions of 30/ weekly. Taking the present, official figures into account, this involves approximately an additional £1,500,000. Two Superannuation Stages. There will be two superannuation stages in future, one commencing at the age of 60 with a payment of £1 2/6 weekly, to be increased to 30/ on reaching the age of 65. For those who elect to come on the scheme at the earlier age. it is estimated that nearly £750,000 will have to be budgeted for. Widows' pensions are to be increased to 25/- weekly where they have children under the age of 16. Widows with no children, or where the children are over 16. will receive the pension at the age of 45. These increased payments to widows involve approximately £500,000. Orphans arc to receive special treatment, with a view to encouraging their retention in private homes and those taking care of them are to receive 15/- weekly for each child. * Higher Invalidity Pensions. Invalidity pensions are to be increased from 20/- to 25/- weekly involving increased expenditure of approximately £150,000. Sickness and sustenance payments are to be made to men and women, these proposals involving approximately £1,000,000. There are to be safeguards in regard to women sustenants. Tn respect to working girls, the maximum benefit under certain 1 circum-

stances 'will be £1 weekly. What arc regarded! as industrial casualties, namely persons unemployed or incapacitated, will receive special treatment involving an annual, expenditure of £500.000.