Nelson Evening Mail THURSDAY, DECEMBER 22. 1938 MINISTER’S HEAVY BURDEN

Nelson Evening Mail, Volume LXXII, 22 December 1938, Page 6

Nelson Evening Mail THURSDAY, DECEMBER 22. 1938 MINISTER’S HEAVY BURDEN

IT has been announced by the Minister of Social Security that companies which make contributions to staff security funds will not be called on to pay the social security charge of one shilling in 1 the pound on the amount of those contributions. At one stage it was stated that no contribution to ! the Social Security fund would be required from anyone not deriving benefit from the operation of the scheme. 1 hen, like a bombshell, came the announcement that companies, which would not benefit, were to be called on to pay the one shilling in the pound on their profits. They will still have ;to do so, but will be exempt to ; the extent now indicated. This tax is unjust, but it would have been more so if the tax on the I generosity of employers had been insisted on employers, it should ! be borne in mind, who are voluntarily assisting their employees to provide for the future. This was one of many points of criticism of the scheme when it was first introduced and the announcement now made by the Minister, welcome though it is, is another demonstration of the fact that the Government was by no means justified in declaring that it had done all its planning before it was placed in office. The absence of complete planning is even more strongly demonstrated in its insulation scheme. The licensing of exports and imports—particularly the granting of permits to import and the selection of imports—has occasioned great concern and the exact position or policy regarding the regulation of imports is still wrapped in obscurity, as every importer knows.

Reverting to the Social Security tax of one shilling in the pound there can be no denial of the accuracy of the comment of the ‘New Zealand Herald, “ that companies, although they are contributing to the future retiring allowances of hundreds of workers, and will be exempt to that extent, will still be required to pay tax on remaining profits to strengthen the Government’s scheme. The exemption provided for companies is apparently not to be extended to individuals, who will still be liable for tax on their contributions to private funds. A man who through his working life pays into his own staff provident fund will in all probability relieve, or at least lighten, the future responsibility of the Government for the payment of an age benefit on his behalf. For that he is to be taxed as if he were relying wholly on the Government to provide for his old age. The principle at stake is recognised in the granting of special income tax exemptions for life-insurance premiums, superI annuation and provident fund j contributions. An encouragement of private saving would mean a reduction in the huge pensions bills of the coming years—the ! ability to finance which has not yet been demonstrated. We agree with otir contemporary that the Government would be well advised to consider some special concessions for those who have already planned for the future. The Minister-in-Charge, however, | may not be able to do full justice I to the position. He is overj burdened with ministerial responsibility. Although he was relieved of a few small portfolios a few days ago he is still Minister of f inance, of Customs, of Social Security and of Marketing and the last-named includes the handling of the guaranteed prices scheme. Able and willing though the Minister may be, he has been set a superhuman task to which has been added the administration of a not yet clearly defined policy designed to insulate New Zealand.