WAR DAMAGE RISK

Otago Daily Times, Issue 24732, 8 October 1941, Page 6

WAR DAMAGE RISK

PROBABLE PREMIUM RATE TWO SHILLINGS PER CENT. BILL PASSED BY HOUSE (0.C.) WELLINGTON. Oct. 7. A statement that the premiums to be charged for insurance for war damage would probably be in the vicinity of 2s per cent, was made by the Minister of Finance, Mr Nash, when moving the second reading of the War Damage Bill in the House of Representatives today. Mr Nash said, in answer to questions, that although he did not wish to commit the War Damage Commission, which would have to decide the rate to be charged, he thought it might be 2s per cent. It might only be Is per cent. It might be as high as ss, but it was not likely to be more than 2s. Such a premium, Mr Nash said, was estimated to provide £546.000 a year for the War Damage Fund which would be created. The Minister paid a tribute to the insurance Companies of New Zealand, which, he said, had offered to collect the premiums under the Bill without charge. Compulsory Cover Mr Nash said that all property covered by fire insurance would be compulsorily covered for war damage, but any person whose property was not so covered might still come into the scheme. Once the provisions of the Bill became operative all classes of stock-in-trade, personal effects, and motor vehicles would be covered, but there would be no personal insurance. The premiums would be added to the existing fire insurance premiums, and would be collected by the insurance companies as agents of the War Damage Commission, which was, in effect, the Government. Munitions manufacturers could cover themselves against risk of damage to outside property caused by an explosion within a factory.

War Damage Fund Retiring to the setting up of the War Damage Fund, Mr Nash said that into it would be paid all the moneys collected as premiums by the insurance companies, and out of the fund would be paid all moneys to persons who suffered loss to property as a result of the war. Once money was paid into .the fund it would become the property of the Crown. Any surplus in the fund would be set aside to be used in the event of an earthquake or any other disaster.

Mr W. P. Endean (Opposition, Remuera); Why not pay it back to the people? The Minister replied that if the war lasted over a period of years property would change hands, and it would be very difficult to assess the amount that should be paid to each person who might have owned any particular property. He did not think any person owning property would worry once, they had paid the premiums. Free Collection by Companies

Mr Nash said he had discussed the question of the collection of the premiums with the insurance companies. and they had agreed to collect them without any charge whatever. The, Leader of the Opposition, Mr S. G. Holland: That’s private enterprise. Mr Nash: That is public enterprise, backed up by private enterprise, and that is the best kind of enterprise. The War Damage Commission would be liable f6!f>making good all damage to property, Mr Nash continued, and it could do it by cash paypient, by reinstating property to its former condition, or by repairing property. The commission i could, ' however, let damaged property lie for one year before repairing it if the exigencies of war demanded it. An Adjustment Commission would also be to determine the damage asTbetween parties, and this would consist of a iudge of the Supreme Court and two other persons. The Government was also given power to make regulations *° ‘tfveeffect to the principles of the Act. The idea was to try to avoid set rules and give the power of administering the Act to the commission, which, among other things, would be given the power to change the rates of premiums.

In the event of the bombardment of •ny particular town in the Dominion, should it be necessary the Government would loan money to the commission out of the War Expenses Account to pay for any, damage, but the premiums would continue until the fund was in credit again. Duties of Commission

Mr Nash also said that the War Damage Commission would determine who should pay the premiums where interest ih a property was held by both the mortgagee and mortgagor. He thought that there was some justification for a suggestion that half the premiums should be borne by each person. The commission would also have to decide to whom the war damage should be paid where a mortgage was held on a property. The , opinion that the Bill was a good one was expressed by the leader of the Opposition, Mr .S. G. Holland. He suggested that provision should be made for insuring property not covered by fire insurance and that regulations should be used sparingly. Mr Holland made a request that the Government should define “other disasters," for which relief could be granted from any surplus remaining in the fund after the war. Mr Holland gave as illustrations of a disaster facial eczema in sheep, grass grub, frosts in orchards and floods. Towards the recovery of such loss, he said, no contribution was made by the property owners. Tilt at Government

Mr Holland said it seemed to him that the policy of the Minister of Finance was that although insuring against War damage was a proper job for private enterprise it should get nothing for anything it did. If it was good enough for the Government to take power to sue through the courts for the recovery of - debt under the Bill, that right should be given to all sections of the community.

The Bill' was a timely one, Mr Holland said. All had been looking forward to a,Bill of this kind, and it could be examined free from all prejudices All recognised the need for the Bill, which would Compensate persons unfortunate enough to have their property damaged by war activities or in a national Emergency: Without making adverse criticism, he wondered why war damage should not be a war expense aa was the cost of transporting and paying soldiers and providing munitions. The Bill provided that the whole cost of restoring damage done bv war ' activities should be recovered from the property owners. He was not saying that they should not pay their share, but he -wondered why the change of procedure Had been made to make this war expense not recoverable from the pockets of the general taxpayers. , Two clauses gave the Minister immense power to make regulations. It was a blank cheque. If the whole cost was to be spread against the property owners, then the whole rate of the premium should be spread. The Prime Minister. Mr P. Fraser: I think the House would be unanimous on that principle. c. "It does Seem that this is one of the occasions when compulsion seems to be a desirable thing,’' Mr Holland said, referring to the compulsory insurance clause. “There are people who would prefer to pay small premiums and thereby endanger adjacent properties.” Powers for Minister Criticising the clause providing for regulations to define the powers of the

Adjustment Commission. Mr Holland said that Parliament might have occupied its time defining those powers The Bill could have been one of three clauses—first, the short title; the second, saying that the Minister could do as he liked: and the third, “Amen.” A remarkable provision was that punishments for offences were' to be provided by regulations, Mr Holland said. That was a wrong procedure, as the House was competent to decide punishment by Statute. The Minister might be kind-hearted and Parliament should assist him to make up his mind. He further suggested that the scope of the property to be insured should be extended to include all property, apart from buildings, that might be liable to war damage. 1 Mr A. S. Richards (Govt.. Roskill) said he considered that the right thing had been done by asking property owners to protect their own property against war damage. Mr J. A. Leo (Democratic Labour, Grey Lynn) said that if the replacement of war damage was to be a question of wealth it should be of all .wealth, including land, and not just p form of property. There should be included such, things as local body and Government bonds, goodwill and every form of intangible instrument 1 over the future production of the community. Better Than British Cover

Replying to the debate, Mr Nash said that all risks were insurable. While land had been mentioned, it was such an intangible thing from the point of view of insurance that he did not know how i f could be covered. If, however, a city council had its gas mains smashed by enemy action there was no reason why it should not be covered. Whatever forms of cover could be given would be given. “In Britain they have not covered themselves as well as we have done.” Mr Nash concluded. “Within these 21 clauses we have the power to cover anything and everything, and that is the only power worth having in connection with war.” The Bill was read a second time.

A sum of £IBSO for the War Damage Fund is provided in the Supplementary Estimates presented to-night. Salaries are given at £IOOO. The Bill was put through the committee stages with little discussion. Mr Nash replied briefly to one or two points which were raised by Opposition members, but not pressed. The Bill was read a third lime and passed.