The Rangitikei Advocate. TWO EDITIONS DAILY. MONDAY, JUNE 28, 1920 STATE FIRE INSURANCE.

Rangitikei Advocate and Manawatu Argus, Volume XLV, Issue 12091, 28 June 1920, Page 4

The Rangitikei Advocate. TWO EDITIONS DAILY. MONDAY, JUNE 28, 1920 STATE FIRE INSURANCE.

IN 1903 tiie politicians in power were embarrassed by the demands of their supporters for profitable billets and in the interests of the party it became necessary to make some work for them so as to excuse payment from the public purse. All the then existing billets were filled, so that it was impossible to appease the hunger of the horseleeches except by creating some new oc« cupations. The cunning of the politicians was, however, as usual, quite equal to the occasion. There were then twenty-three insurance companies doing business in New Zealand, the whole of which could have neen done by one, and insurers had to bear the cost of each of the twenty-three staffs and yield profits for the twenty-three sets of shareholders. These facta did not daunt the politicians, who conceived the brilliant idea that if they formed a State Company at the expense pf the insuring public they could thus get over the difficulty of providing a living wage for some of their most clamorous “right colour” people. By the usual methods they organised an agitation for cheaper insurance, and. many people believed they were sincere iu their desire to lower the coat, forgetting that the creation of yet another competing company was a most extraordinary method to be applied to reduce cost. That the cost was not reduced is shown by the recently published returns of life insurance business iu this country, while, instead of decreasing the number of institutions to be supported by insurers, the number of companies has now' increased from the original 23 to 34, and 9 of these have been established since the politicians established their service-re-warding company. Altogether these companies now extract from insurers nearly a million a year more than they pay out for losses, even iu such an exceptional year as that of the Waimarino fires. So much for the utility of the State Fire Insurance Department, so far as the insuring public are concerned. But it has proved a ‘‘sweet boon” to the Treasurer as well as a means of providing well-paid employment for the useless. Its balance-sheet for the 3 ear ended December 31st last has just been published, anr. shows |that

it has been profiteering on a huge scale. The Minister in charge of this excrescence on the public services thus gloatingly refers to its depredations:—“The net income amounted to £110,564 and showed the substantial increase of £11,105 over the previous year. This is the greatest increase secured in any single year’s operations since the office commenced business. The gross income showed an even greater increase, £13,872, bringing the gross income for the year up to £151,935, The net profit for the year was £3 7,043 la 4d. ”

IT is* to be specially noted that this profit has been made by the State out of the insuring public without the nse of any capital, for though the Act creating the State competing company authorised the raising of £IOO,OOO, that money was never required, for during the first year of its operation, 1905, it did insurance business amounting to £3,ooo,ooo—most of it forced from borrowers from another Department. It has represented another tax on property. It was established on the plea that it would benefit insurers, but it has merely bled them, The results of its work force the question why the State should be permitted to make a profit out of the insuring public. It should need no argument to show that the Department should either very materially reduce the cost of insuring, or cease compelling insurers to bear the cost of maintaining it. Even if it' had been employing the £IOO,OOO it was authorised to raise, but did not, its profits last year represented 37 per cent on that amount, yet the Government that created it hounds down those who make a few extra pence on pots of vaseline or tins of patent food ! The State Fire Insurance Depaitment supplies yet another example of the costly and Injurious effects of Government interference In business^efaterprise.