Social Security Proposals

Northern Advocate, 22 July 1938, Page 6

Social Security Proposals

[Special to “Northern Advocate.”] WELLINGTON, This Day. Points raised by representatives of pex’sons who contxdbuted to the Govei’nment, local body or private superannuation funds, and of those already retired on superannuation, were dealt with by the special Parliamentary committee in recommending the adoption of the superannuation proposals. No Distinction. Members of the committee had been at pains to point out that there was no distinction between the superannuation benefits and the other benefits proposed under the scheme. Each one was a social security benefit —the community as a whole ensured its individual members against part of the financial loss resulting from permanent invalidity, unemployment, widowhood, oi'phanhood, sickness, disability, and in the case of superannuation, the attainment of old age without sufficient means of livelihood. It had been found that many of the superannuation funds brought to the committee’s notice made provision for no more than endowment or a cash payment at the end of the term of service, so that on retirement the employees’ income was subject to all the usual risks attending private in-

vestment. Contribution to many of these funds, with their respective rights of return of contributions, prevented many employees from taking advantage of the opportunities to improve their position in outside firms. Practically every one, moreover, made no provision for widows and children in the event of the early death of the contributor. Insurance Against Disaster. It had been pointed out by members of the committee that the social security contribution of 1/- in the £ represented an increase of only 4d in the £ over the present rate of employment tax. The 1/- was estimated by the actuary to produce the sum of £7,500,000 in the year 1939-40. It was clear from the actuary’s figures that there was no justification for regarding any particular portion either of the 1/- in the £ contribution or, for that matter, of the subsidy from the Consolidated Fund as earmarked for any particular benefit. The scheme i was in the nature of an insurance } cover against disaster, exactly on all j fours with, fire and accident insurj ance, which every prudent citizen undertook as a matter of course, hoping, nevertheless, that he would not be so unfortunate as to have to make a claim for a cash return. * Means Test Unavoidable The committee recognised that if it were possible to grant a benefit of a like amount to every person in the community that would undoubtedly have some desirable effects. Where, however, the money available was limited, and the needs of some were so great as to acquire the application of all that mopey, leaving nothing for those who were otherwise adequately .provided for, it seemed 1 that no civilised community need make any apology for applying the money in the way suggested under the Government’s proposals. The witnesses had suggested that those they represented should be exempt from contribution for some or all of the benefits, or that they should receive a benefit at the same rate as anybody else, irrespective of their need. The first course would throw the whole of the cost on to the remainder; the second would increase the total cost so greatly as to double the cost of superannuation benefits alone. Recommendations. The committee, after giving due weight to the representations made, finds itself in accord with, the proposals of the Government in regard to superannuation, and recommends that these proposals should be adopted. Recognising, however, the desirability of providing universal superannuation without regard to' other income or property, it recommends that immediately the procedure for the social security proposals has been instituted, j the Government should consider the extension of the scheme to provide a gradual increase in allowable income until universal superannuation is realised. The committee found that the proposal to finance the scheme by a social security contribution of 1/- in the £ on all salaries, wages and other incomes, an annual registration levy of £ 1 for every adult, and a subsidy from the Consolidated Fund was sound. The cost of the benefits was estimated at £17.850,000, and the Government’s subsidy at the outset was expected to be £9.850,000.