THE ANNUITY SCHEME.

New Zealand Herald, Volume XLIII, Issue 13148, 10 April 1906, Page 4

THE ANNUITY SCHEME.

It is not possible to comment precisely upon the Premier's annuity scheme for we have as yet only the shadowy suggestion of something to come. But we may say- at once that there will be a very general disposition to consider favourably any proposal which has for its purpose the wellbeing of an industrious and | thrifty people during their declining ! years, or among the vicissitudes of life. The only general criticism j which we would make is that, to I effectively cover the industrious and the thrifty, some minimum annuity I insurance must necessarily be unij versal and compulsory. For as long i as the State pays old age pension ! only to the necessitous it is not ; within human nature for the average | man to exercise special self-denial in ; order to obtain no more than he will I obtain without self-denial. This ' frame of mind is doubtless regret- ; table, but in legislation we must i take human nature as it is and not jas it ought to be. "Whether univer- | sal compulsory annuity insurance should be based upon special contributions or general taxation is an important but secondary question. Notuntil such insurance is instituted for the minimum amount on which one may live can we approach effectively the establishment of a system by which the voluntary and subsidised savings, of the industrious and selfdenying may become an endowment to provide them with a comfortable and respected old. age. The old age pension system as we have it has a defect which 'is as freely admitted by its most earnest champions as by any of its few uncompromising critics ; it does not encourage even if it does not distinctly discourage thrift; it penalises the workman who has made provision, beyond a very small amount, for his own old age. If we are to have a sound annuity scheme we must make it evident that the thrifty will not lose by their thrifiiness, and since we shall have to pension the unthrifty in any case, how are we going to be just unless we have some form of compulsory insurance for the amount it is considered necessary to give them? That these are the lines of the ultimate solution of a very 'difficult problem all thoughtful men will agree, and since it is manifestly difficult to reach that solution excepting through cautious and progressive stages, the entire community will be] prepared to view with friendly eyes any reasonable plan put forward "by the Government. There are any! number of carefully thought-out-plans in existence, for the statesmen of all countries have been confronted by the old age problem, and we may hope from among them to secure one which may be modified to meet satisfactorily our special local conditions.