SOCIAL SECURITY

Otago Daily Times, Issue 26550, 27 August 1947, Page 6

SOCIAL SECURITY

INCREASED BENEFITS NOT EXCEEDED BY COSTS Parliamentary Reporter WELLINGTON, Aug. 26. A denial that higher costs as a result of the withdrawal of certain subsidies would cancel out the Increases in social security benefits was given by the Minister of Supply, Mr Nordmeyer, who followed the Leader of the Opposition, Mr Holland, in the financial debate in the House of Representatives to-night. He claimed that the increases in costs would not amount to the increases in the beneflts. Mr Nordmeyer said that the Leader of the Opposition had stated after the presentation of the Budget that it was a dull, dreary, disappointing document. His reply to that was that the House and the country had just listened to a dismal, depressing, doleful dirge in the speech by the Leader of the Opposition. The Leader of the Opposition had demonstrated that he was opposed to the Budget. He had never been in favour of any Budget that Labour had introduced, but the mere dissent of its contents at the time of its introduction, was no indication of permanent disapproval so far as the Leader of the Opposition was concerned. As time went on, he would take things out of the present Budget and proclaim them from the housetops as his own. Isolation Not Sought Mr Nordmeyer said the Leader of the Opposition had stated that this Budget represented a departure from Labour’s insulation policy. Insulation had never meant isolation so far as the members of the Government were concerned. No one had ever suggested that New Zealand could be completely unaffected by what happened overseas. What Labour stood for and promised was that if there was an economic blizzard, doors and windows were not going to be thrown wide open. That was Labour’s insulation policy. The Leader of the Opposition had been completely inconsistent for he had said that imports should be reduced to help Britain and then complained of restrictions on the imports of motor cars and chinaware. He had also referred to the method of presenting the national accounts and pleaded for the Consolidated Account, the Social Security Account and the War Expenses Account to be placed in one account so that the country would know where it stood. He took certain figures from each account and claimed that by adding the credits in them at March 31 the real surplus would be indicated. The Leader of the Opposition had overlooked the fact, however, that there had been substantial transfers between these accounts. People Pleased It had also been suggested by the Leader of the Opposition that the Budget had pleased no one, including the aged, but the Minister said that during the week-end he had met a number of these people and had found that they were pleased with , the Budget. The Leader of the Opposition had claimed that they would be no better off because the rises in prices would more than offset the increase in the age benefit. Mr M. H. Oram (Oppn., Manawatu): Why were the increases given then? The Minister said that there would be certain increases in costs. It was not correct, however, that social security beneficiaries would not be better off, because the increases that would become evident as the result of the abolition of certain subsidies would not amount to the increase in social security benefits. It had also been claimed by the Leader of the Opposition that the Minister of Finance was deliberately underestimating his income, said Mr Nordmeyer, and he had contended that there was inflation and that taxation should be lower. If inflation was here, one of the known methods of correcting it was to increase taxation or to leave it at a high level. War-time Taxes It had also been suggested by some newspapers that now the war was over war-time, taxation should be abolished, the Minister said. Since the cessation of hostilities there had been very considerable reductions in taxation. Last year the war-time surcharge on income tax was reduced from 33 per cent, to 15 per cent., the national security tax was reduced first by sixpence and then by the other sixpence this year. Each reduction of sixpence meant a concession of £8,000,000. In addition, the sales tax had been abolished on all building materials, furniture, clothing, boots and shoes, and a number of other items. The social security levy was also abolished, and the wife’s exemption for in-, come tax increased from £SO to £IOO. This year limited exemption had been granted from the payment of the surtax on unearned income. The annual value of these reductions amounted to £30,000,000. The Government could not go on reducing taxation while increasing the expenditure which was called for in so many directions, including the_ sphere of social services, said the Minister. The war debt in respect of the late war was £221,000,000. Money had still to be found for purposes associated with the war. War taxation could not be removed so long as these charges had to be met and that would be necessary for a long, long time. Freight Charges The most important change in stabilisation procedure was that affecting shipping and rail freights. In future the whole cost of transport would have to be borne by the user. The public would be more interested in consumer subsidies and the whole effect of the changes being made in these would be to increase the wartime price index by 3.6 points, which did not necessarily mean an increase of 3 per cent. He estimated the inwwasc in the cost of living for the average consumer as the result of the reductions and the abolition of consumer subsidies at one shilling a week, but he agreed that other subsidy reductions, such as those on freights, would affect living costs to some degree. It was ridiculous, however, to suggest "that the workers were not better off to-day than previously.