Social Security

Northern Advocate, 23 July 1938, Page 4

Social Security

IN ITS report on the social security scheme, the Nordmeyer Committee claims that it is ‘ ‘in the nature of an insurance cover against disaster, exactly on all-fours with fire and accident .insurance.” This is an ingenious way of sugar-coating the somewhat bitter pill which the wage-earner in the community will have to swallotv next April, but it does not make the pill any more palatable. For the fact is that the analogy between this scheme and an insurance scheme is not an accurate one at all. The only basis on which it can be compared with the principle of insurance is to set it alongside the system of life insurance witli which so many prudent men protect themselves and their families. If given the choice, no man in his senses would not put his shilling in the £ into a life or endowment policy instead of into the Government’s social security pool, for one is a certain investment, from which he or his dependants are certain to receive benefit, whereas the other, no matter what disguise it may be clothed in, is a tax severe arid oppressive, levied for an admittedly excellent cause—the protection of the unfortunate in the community—but a tax for all that. For every advance in his business or profession made by the citizen of New Zealand, for every rung of the ladder which he laboriously and arduously scales to gratify his own legitimate ambition or his desire to create assets for his family, he puts further away from him the possibility of ever sharing in the main benefit from that scheme into which, year in, year out, he? will pay Is. from every pound he earns. it is now revealed, too, that while the levy on wages is to he stepped up from Bd. to Is. in the £, the quarterly payment of ss. is to remain, making a so-called ‘‘registration levy” of £1 per annum. Why this tax should masquerade under such a title is a little baffling. The tax was introduced eight years ago, and was called an unemployment levy, but possibly the Government feels that it may sound more palatable if now called a “registration levy,” even though its purpose is to obtain money, and not to register those who provide it. With the Is. in the £ tax, and the registration levy of £1 a year, direct taxation will contribute £8,000,000 towards the cost of the scheme, and in the first year £9,850,000, to make up the total estimated cost up to April 1, 1940, will be provided by the Consolidated Fund. This part of the finances of the scheme is dismissed lightly, as if the Consolidated Fund were some benevolent agency from which huge sums may be frequently and painlessly drawn. Actually the Consolidated Fund is built up from taxes paid by the people of New Zealand, so that the whole scheme will be financed by taxation, direct and otherwise. It is inevitable that the Consolidated Fund will be seriously depleted by the heavy calls made on it. While the Social Security Scheme does not come within the scope of this year’s Budget, it would not be surprising if, on account of the wide ramifications and extensive commitments implied in it, an increase in general taxation were found unavoidable next year.