FARMERS’ DOUBTS

Poverty Bay Herald, Volume LXV, Issue 19622, 3 May 1938, Page 13

FARMERS’ DOUBTS

UNION CRITICAL SOCIAL INSURANCE AIM PRINCIPLES SUPPORTED VARIANCE' OF METHODS WARNING NOTE SOUNDED (Per Press Association.) . WELLINGTON, this clay. Giving evidence to-day before the Parliamentary committee dealing with the national ' ’superannuation and health scheme, Mr. W. W. Mtilholland, the president rof the New Zealand Farmers’ Union, stated that' the attitude of the New Zealand Farmers’ Union with regard to national health Insurance and superannuation was expressed in the following resolution which was carried at the last annual conference of the union in 1937: — ?That the Government be asked to introduce a national scheme to cover sickness and old age which shall be (1) national; (2) adult;' (3) contributory; and (4) absolutely protected." “The Farmers’ Union strongly supports a universal contributory superannuation scheme,’’ continued Mr. Mulholland. “By a superannuation scheme mean a scheme into which the beneficiaries pay a sufficient sum in contributions year by year, so that their payments, together with the interest earned thereon, provide a sufficient fund from which the benefits can be paid. They accrue to the beneficiary by right and are his property—he having provided the fund: by which they are established.

Profoundly Disappointed

“The Farmers' Union is profoundly disappointed at the Government’s proposals for national superannuation. The proposals are not for superannuation at all, but are proposals to provide finance to pay pensions on a considerably increased scale and on a much wider basis to various members of the community, including the relief of unemployment by the payment of sustenance. A number of these proposals will have the effect of keeping in idleness people who are physically well able to provide for themselves.

“If this were done at the expense of their own earlier savings there could be no objection, but the proposals are that it be done at the direct expense of the earning section of the community.

“The proposal that a large share of the finance shall ,be provided by the consolidated fund (estimated by Mr. G. H: "Maddex at nearly £10,000,000 out 'of approximately £18,000,000 for the first year of the combined health and pension scheme) means that the main burden of the scheme is going, to fall, upon those sections of the community already suffering from the increased cost of living—namely, .those bread-winners with a number of dependants.” Present Tax Cited After reviewing the information available as to the methods of . finance proposed, Mr.- Mulholland stated that Mr. Maddex had estimated that the social security contribution of 1/- in the £ on wages and other income was going to provide £7,500,000. “The present tax is Bd. in the £, so that there is only one-third of that which is new money—£2,soo,oo0—or allowing for another £900,000 for exemptions! now to be , abolished, say, £3,400,000, to finance a new expenditure of £9,000,000,”' continued Mr. Mulholland. "Taxation for the last financial year brought in approximately £3,500,000. Already included in this amount: are very considerable increases in the tax demands which, taken together with various other cost-increasing factors, reduce the internal value of our New Zealand pound to such an extent that the demands on the sterling funds in London have already exceeded the amount available for their replacement from our exports, as indicated by the reduction in the overseas funds of all the banks, which in the montn of January were approximately £38,000,000 two years ago, £28,000,000 a year ago, and this year £23,000,000. Menace to Stability “The addition of another £9,000,000 to the Government’s imposts, with its attendant repercussions in increases in costs, and further internal devaluation of the New Zealand pound, will probably cause such a demand on the overseas exchange, as to create a very grave danger to the stability of New Zealand’s financial position overseas.” “Mr. Maddex’s estimate that the 17in the £ ‘social security’ contribution plus the registration charge of £1 pet year, would produce £8,000,000, b based on the assumption of the taxable 'national income’ of £150,000,000. which he indicates has never before been attained. I would point ou that to estimate for the future on the basis of the income of the highes year in history, which has been made possible by the highest export income ever reported, must result in a grave over-estimation of the income in normal years. I would further point on that in the 1933-34 season the yiek of the wages tax of 1/- in the £ wa; approximately £4,500,000;- that is tc say, a little over one-half of the present estimate. If our income again falls appreciably, we may have tc budget for up to £15,000,000 from the consolidated fund, or else the scheme would fail financially,” Mr. Mulholland said he wished tc emphasise the unwisdom of depending on a largely increasing national income to keep the finances of this or any other similar scheme sound.