Patea & Waverley Press WEDNES., OCTOBER 5, 1938. FARMERS AND SOCIAL SECURITY

Patea Mail, 5 October 1938, Page 2

Patea & Waverley Press WEDNES., OCTOBER 5, 1938. FARMERS AND SOCIAL SECURITY

THE Farmers’ Union in an offi-

cial statement lias voiced its opinion of the Government’s Social Security Scheme in no uncertain manner. It begins by stating that the present proposals are in no sense superanimation, but are a very much extended scheme of pensions. The statement goes on to say that the ability of the country to pay the cost of the Social Security Scheme is the most important consideration in deciding its practicability. Included in this consideration is its effect upon the economic life of the community, and particularly on its standard of living. Mr. G. TL Maddex estimated the cost of the scheme in the form in which it was placed before him as £17,850,000. The Bill provides for increases on the proposals submitted to Mr. Maddex, but these are dealt with in such a way that, while it is evident that the aggregate cost will be increased considerably, it is impossible to judge with any degree of accuracy what these increases will he, In many of the benefits, after particularising certain conditions, the Commissioner are given wide powers of variation. It would seem, however, that the total cannot be placed at less than £2O millions per annum in the first few years, and probably will exceed'that., The only indication of the financial measures necessary to meet these commitments given in the Bill is the provision of the Social Security tax of Ifin the £ on salaries, wages, and other income. In Mr, MaddexV estimate the “national income” for the purpose of this taxation is taken as £150,000,000, from which various exemptions will have to be deducted, Avhich will certainly exceed £10,000,000. The total revenue from the*l/- in the £ Social Security tax and the registration fee would, on this basis, ho £7,500,000, leaving £l2, 500,000 to be found from other sources, The 1938 Biulgct disclosed an expenditure on Social Services of £7,450,000 which, if revenue continued as buoyant as at present, would be available for that purpose. This would leave a deficit of, in round figures, £5, 000,000 to be made up from now sources. But the Social Security proposals make provision for expenditure in regard to Unemployment Relief for sustenance only. The revenue available to the Unemployment Fund last year was £5,145,000, all o F which Is absorbed into the Social Security Fund, so that to finance the

activities for which this money was used will require the finding of at least £3,500,000 from other taxation, making a total of new money required of £8,500,000. This added to a Budget expenditure of £35,787,000 and a Public Works expenditure (excluding amounts from the Highways and Unemployment Funds)' of £l6, 621,000, will make a total Government expenditure of £60,000, 000, or 40 per cent, of a “national income” of £150,000,000. This

means that a man earning £5 a week will out of it have to contribute £2 per week to the State. If it is obtained by increased Customs duties, then the cost of living will be increased and in that way the ordinary person will have to make his contribution. It may be suggested that it can be taken from the large incomes of wealthy people, but in fact, if the income tax were increased to 20/- in the £ on the whole of the income assessable for income tax in New Zealand, largo and small, it would still be between £3,000,000 and £4,000,000 short of meeting the whole of the requirements. The aggregate of taxable balances for the year 1936 37, as given in the February “Abstract of Statistics,” was £16,483, 000. If all the incomes over £3OO a year, as returned for the Income Tax year 1936—37 aat.it taken, leaving nobody Avith more than £3OO a year, aat Avould obtain £2l, 890,000. This is not enough to finance the Government’s proposals, and the other £3,000,000 now being spent from the Unemployment Promotion Fund for unemployment purposes. It is evident, says the statement, that the major amount of the money required must be raised from the ordinary Avage earning, small salaried persons, and small business people, and the farming community. It is no Avonder therefore, that the farmers vieAv with displeasure the Social Security scheme of'the Government.