“A WRONG PRINCIPLE”

Nelson Evening Mail, Volume LXIV, 20 June 1931, Page 10

“A WRONG PRINCIPLE”

STATE LIFE COTS

PAYMENT TO PUBLIC ACCOUNTS

When the Government put forward its proposal to pav the amount of the salary cut in the Government, Life Insurance Department, into the Public Account, a protest was entered by the ! Public Service Association, whieh'poinli crl out that the Department had always j been a mutual office, that all profits had been divided among the policyholders, and that its funds had always been separate from the Public Account’s. The Prime Minister (the Right lion. G. W. Forbes) replied that the 'Economy Committee was of opinion that the benefit arising from the reduction in salaries in respect, of all Public Servants should accrue to the Consolidated h mid. “It should he remembered,” lie said, “that the Government Life Insurance Department’s progress has been maintained with the aid of a guarantee, from the Consolidated Fund. I hat is to say, had the Department at aitv time been unable to meet the claims made upon'it, the Consolidated Fund would have been called upon to make up (ho deficiency. It is not unreasonable, therefore, when the Consolidated Fluid is called upon to face the unprecedented financial position that at present obtains, to require some extra return for the assistance it has given the Department, which assistance lias not been enjoyed by competing companies.” 1 his reply is condemned in the currant issue of the, “Public Service Journal” as “weak to the point of absurdity, as during its 60 years’ working the Department has never had to call on 1 the Government, to assist it.” “By sound methods,” states the “Journal,” j “the Department has been a success | from the start and is now in a stronger I position than ever. The Government - has been well repaid for any use the i guarantee by the State may have been 1 to the Department, as the latter has j assisted the former many times by the purchase of Government securities’, etc. The guarantee was a gift, 60 years ago | with no question of payment for it. It remained for the present Government to use the guarantee as an excuse to grab the ‘cut.’ The amount seized will not affect the profits of the Department, but the seizure gives the agents of rival offices room to make misleading statements which may retard the progress of (ho Department somewhat, tl is absolutely wrong for any government to put a permanent disability on one of its own institutions merely owing to a temporarily strained • financial position. The country, has faced as difficult, if not, more difficult, positions on occasions, hut no Government lias unlil now stooped to what practically amounts to interference bv special 'enactment with trust moneys.*’