Poverty Bay Herald Poverty Bay Herald. GISBORNE, MONDAY, AUGUST 31, 1936. PENSIONS INCREASES PENSIONS INCREASES

Poverty Bay Herald, Volume LXIII, Issue 19107, 31 August 1936, Page 6

Poverty Bay Herald Poverty Bay Herald. GISBORNE, MONDAY, AUGUST 31, 1936. PENSIONS INCREASES PENSIONS INCREASES

Although the three pensions lulls which arc. now before Parliament do not make any startling revelations oilier than those which were contained in the Budget... they possess a mass of detail 'which will bring the question more prominently before the public. It is the intricacies of the measures, in fact, which primarily draw attention to the complicated pensions .system and procedure that litis been built up and emphasises the need for a more simplified and more comprehensive method of meeting the needs of the distressed sections of the community. It is not an easy matter to condemn, or even criticise, any scheme which aims at an amelioration of the conditions of the aged and needy, for, broadly .speaking, it is the desire of everybody that the lessfortunate people should be reasonably cared for at the expense of those who are better off. On this point there is no room for divergence of opinion, but there might be some conflict of views regarding the interpretation of reasonable provisions—and the question of what is reasonable must be studied from the viewpoint, not only of the recipients, but also of those who are called upon to pay. It is unpopular in these days, of course, In defend the unfortunate taxpayer or to raise the point of where the money is to come from to carry out the Government’s various proposals, but, unpopular or aot, they are issues which have to be faced. To raise tlie question of whether the Dominion can afford to pay the proposed new pension-rates-does not mean that the pensioners are begrudged payments which, even with the increases, may still be inadequate,- but directs attention to the possibility of the whoie system breaking down under its own weight. It is' obvious that any country can only distribute a certain proportion. of its total income ns largesse, for if the amount becomes excessive the drain on a final earnings may be so great that earnings themselves will bn seriously depleted and the actual source of all pensions may be dried up, in which event, excessive temporary generosity may ultimately prove disastrous to the very persons it, .is sought, to assist. The number of pensioners in New Zealand will ho increased hy the

present legislation to over 100,600. In addition, there are between 40,000 and 50,000 unemployed, the majority of whom are giving no labour service in return for the payment they receive. This means that approximately ono person in every ten in the Dominion Ls dependent upon the bounty of the State, and if their dependants are added the proportion will be increased to more than, one in every five. That such a situation exists may bo a tribute to tlie social services, but it is a striking commentary on the economic order, for it means that industry as a whole, and every worker in it, is called upon to support not merely those directly engaged in it, but also a large army which is not adding in any. way to the production of the community. In other words, there are too many drones in the hive. It is true that most of them are unwilling drones' and that they would much prefer, to support themselves, but this does not alter the fact that their number rntij reach the level when those who are working will not be able to produce enough to keep them. There is a limit to the extent to which the workers can carry the burden created by those who live in idleness, whether voluntary or otherwise. The vote for pensions this year has been increased by £1,700,000 to nearly £5,500,000, and it to this the cost of unemployment relief is added tDo total is not far short of £10,000,000. None of the pensions increase is operative for a full financial year; much of it, in fact, will apply only to four months. This means that in ihe ordinary course of events another large increase in the vote will be required in next year’s Budget. Where is that increase to come from? The Prime Minister has frequently insisted that taxation already is too high, but additional expenditure can only be met by additional taxation. Provided overseas prices are maintained and there is no curtailment of production it may be possible to meet the position, but where will the Dominion stand if it has to face another slump period? The difficulty is that all State expenditure. tends to become permanent, but the income of the Dominion is subject to fluctuations over which no Government can exercise any control. Whether pensions or any other expenditure can be sustained depends, in the final analysis, on the amount of this uncertain income. To some extent, the greater the drain on the income the less the prospects of expanding it, and it is because the increased pensions bill constitutes an added burden on the workers and increases the proportion of non-pro-ducers to producers that some anxiety may be felt as to its possible effects. With the actual rates of pensions there may be little room for objection —although there are many wageearners who would welcome the maximum of £0 a week income which some pensioners will be able to obtain —but flip total annual bill which will have to be met bv the Dominion, a Dill which will tend to increase its economic conditions become less favourable and the burden becomes more onerous, will give rise to no little anxiety. The problem resolves ilsolf, not so much into a question of the scale of pensions it is desirable to pay as the ability of the working section of the community to meet the cost of keeping the other section in idleness. It is unfortunate, perhaps, that the Government did not postpone the present legislation until it was in a position to bring down a •comprehensive contributory scheme of ocial insurance which would overcome many of the existing difficulties and place the whole pensions system on a more satisfactory and loss uncertain and financially unsound basis.