INSURANCE PLAN

New Zealand Herald, Volume 78, Issue 24049, 21 August 1941, Page 11

INSURANCE PLAN

COUNTIES COMPANY \t ■ CO-OPERATIVE SCHEME , EXPLANATION BY MINISTER . (S.R.) WELLINGTON, Wednesday Emphasising that the bill was the outcome of .resolutions at earlier conferences of the Counties Association the Minister of Internal Affairs, the Hon. W. E. Parry, when moving the reading of the Counties Insurance Empowering Bill in the House of Representatives to-night, said the only clause likely to be contentious was that giving the councils power to subscribe ' capital to the insurance company with--out taking a poll of ratepayers. V The bill was a simple one, enabling " the county councils to form a Counties Co-operative Insurance Company, Limited, conforming to the terms of the Companies Act, 1933, said Mr. Parry. The company would arrange the insurance of such county councils as elected to join the scheme, which was purely yoluntary. Proposed Nominal Capital It would have a memorandum and articles of association and the Minister of Finance would have all the powers • necessary to see that the articles contained the power to get the company through its initial stages, the Minister continued. It was proposed that the paid-up'capital should be sufficient for the company to carry insurance from the beginning of the scheme. The capital would be £IOO,OOO An Opposition Member: Is that in the bill? "No," replied Mr. Parry. "The company will not begin business until a '"minimum of £55,000 has been subascribed by county councils and £27,500 ' has been paid up. "The company will have to comply with the requirements of the Insurance " Companies Act, 1940, and will operate :; 0 n a co-operative basis," the Minister ..continued. "Membership is limited to county councils and the company will insure for its members only. The counties will at the outset contribute capital on a pro rata basis, - according- to the capital value of the land in tlieir respective districts. Counties coming in - after the nominal capital lias been subbribed will purchase their shares from ihose already in the. scheme on a pro rata basis. Fixed Bate of Interest "The share capita] will carry a fixed rate of interest of 4 per cent. 'No other dividend will be payable to the counties." The Minister added that the bill was in keeping with- the general outlook of the farming community in that it could do a collective job. Mr. W. S. Goosman (Opposition—- ■ jWaikato): Are the profits taxable? "No provision is made for that," replied Mr. Parry. Mr. Goosman: What about social and , national security taxes? The Minister of Finance, the Hon. W. Nash: If there is profit we will tax it. Raising Loans Without Polls Mr. Parry said the first directors would be, named in the articles of association and would be important members of the counties. They would remain in office until the first ordinary general meeting of the company. _ Dealing with the final clause authorising councils to raise loans to meet their share capital without a poll of the ratepayers he said the sum of about £IOOO would have to be raised by each county ahd the taking of a poll of ratepayers would cost practically that amount. s Support fay Opposition The Leader of the Opposition, Mr. 6. G. Holland, said the Opposition . would, be glad to acquiesce in the passing of the bill. The measure gave the counties the right to subscribe capital "for the formation of a company for ; classes of insurance which had yet to be decided and he thought that much that the Minister in charge of the bill kad said in explanation might have been incorporated in the legislation itself. It would be a comfort to insurance companies to know that the bill would subject the new company to the same taxation that they nad to pay, Mr. Holland continued. Representatives of some of the counties had assured him that the measure had their full approval and he hoped it would achieve the objects which they wanted. In answer to a question Mr. Nash said that if the company had to pay out more than was subscribed as capital the company itself would be liable, but he thought that the banks or the Government would come to its assistance if necessary. In the meantime the whole thing was built up on reasonably good conservative lines. , Co-operative Basis The bill was a capitalist bill on a co-operative basis ; said the Hon. A. Hamilton (Opposition—Wallace). It proposed the formation of a company not primarily to make profits but to pay interest on capital and then to distribute any surplus to the people who provided the business. That was co-operation or conservative socialism. If the Government adopted that policy where it was suitable and a policy of ■ individualism where it was suitable, . there would not be much to quarrel , about. The bill had created a good atmosphere in the House. The bill was put through the remaining stages and passed. PUBLIC, TRUSTEE AND RATES MINISTER STATES POSITION (S.R.) WELLINGTON, Wednesday - 'lt is not the intention of the Government to introduce legislation in the direction suggested," said the actingPrime Minister, the Hon. W. Nash, when replying in the House to-day to an inquiry by Mr. J. A. Boy (Opposition—Clutha) whether steps would be ■taken to introduce legislation placing the Public Trustee on the same basis as ordinary ratepayers with regard to the payment of rates on properties administered by him. Mr. Nash said that full rates, both general and special, were paid by the Public Trustee on all land and buildings belonging to estates under administration by him, but there was a clear distinction between these properties and office premises vested in the Public Trustee for the purpose of carrying on . the business of the office.