MR. LANG'S TANGLE.

New Zealand Herald, Volume LXIII, Issue 19372, 6 July 1926, Page 15

MR. LANG'S TANGLE.

NEW COMPENSATION ACT.

STATE INSURANCE SCHEME.

PRIVATE COMPANIES' ATTITUDE

[from our own correspondent.] SYDNEY, July 1.

When Mr. Lang's Labour Government, in this State rushed through by means of j the ''gag" in the session of Parliament earlier this year a new Workmen's Compensation Act, few realisod the extent to which the proposals went. The newspapers, too, failed to emphasise the drastic nature of the proposals, with the result that the public affected were totally unprepared for the revelations which have been made during the last month or so, prior to the Act becoming operative today In a vague way employers sensed that their liabilities would be greater, that the premiums they would have to pay would be much greater than under the old Act. But the past month has shown that the burden which the Act places on many industries will be tremendous. There is no need to detail here the full extent of the scale of compensation. It suffices to say that the rates have been raised a great deal, and there are such restrictive clauses as one making the employer responsible for sickness contracted by a workman while in his employ. The insurance underwriters have held many important conferences during the past four or five weeks, and when the schedules of premiums were published, employers, to use a colloquialism, were "knocked flat." Government in a Fix. Nor, it was announced, were the companies eager to do business' even at these rates. This put the Government in to a pretty fix, and Mr. Lang, with characteristically hasty decision, announced one afternoon that the Cabinet had decided to extend the Treasury Insurance Department, which covered only a handful of Government employees, into a State Insurance Office. "To cut rates," thought everyone, but this was not so.. An announcement the' following afternoon plainly stated that business would be done at the schedule drawn up by the private companies, except in one instance —the premium for domestic employees was reduced from £2 to £1 a year. This decision was followed this week by an announcement that nearly 50 local, British and foreign insurance companies would withdraw from the operations of the Workmen's Compensation Act. Thus, Mr. Lang's State insurance Office has grown in an instant from a small competing institution to a State monopoly, or practically so. E3ect in the Country. Industry in the country has been particularly hard hit. Share-farming, whereby a man works a farm and shares profits with the owner, is said to have received its death-knell, as the owner of the farm becomes responsible for the insuring of the fanner. In the timber industry the rates of insurance rose by 300 per cent., and hardwood and softwood mills are closing down wholesale, millers claiming that' the added burden will not allow them to compete with imported timbers. Thousands of men engaged in this industry alone have been thrown out of employment. Other sufferers are casual domestic labourers, like washerwomen or gardeners engaged for a day or so a week. The responsibility of the employer in these cases has become so great in comparison with the return of labour given that the mistress or master of a household who gave a day's work to people only too glad lo take it has decided to dispense with heir services.

A cable message published last week stated that the insurance companies were not unanimous and that a number of them had decided to accept compensation risks under the new Act.