A.M.P. SOCIETY

Southland Times, Issue 20659, 15 April 1929, Page 2

A.M.P. SOCIETY

ANNUAL MEETING.

Sydney, April 12.

At the annual meeting of the society held this afternoon, the chairman referred to the splendid progress during the year 1928. Further records have been created and the cash surplus for the one year Reached over £3,000,000. The chairman (Sir Alfred W. Meeks) in the course of his speech said:— In presenting this report to members for adoption, it gives me pleasure for the seventh year in succession to chronicle a fresh new business record both in the ordinary and industrial departments, as well as continued uniformity of excellence throughout the whole of the society’s activities. The new business record has been accomplished despite untoward conditions which prevailed throughout the greater part of Australia during the year in the shape of drought, business depression, and industrial troubles, all of which militated to a greater or less extent against the success of our outdoor representatives. In several of the States nevertheless particularly satisfactory increases were shown, but perhaps the most notable contribution to the improvement in the returns reached the society from the Dominion of New Zealand. The reasons for this are not far Io seek. They lie in the general prosperity and contentment of the New Zealand people assisted by the broadminded encouragement which the Dominion Government extends to life assurance through the medium of the taxation Acts. investments. The balance-sheet exhibits the distribution of the Society’s assets. As compared with the balance-sheet of twenty years ago, a very marked change is shown in that distribution. The district trend shown towards the diversion of the Society's accumulations from mortgages to public securities has been to a certain extent due to the paramount necessity during the years 1914 to 1918 of assisting financially in the efficient prosecution of the war, but it is largely due also to the operation of the lines of policy apparently favoured by the people of Australia and New Zealand, as expressed through their Parliaments, of relying more and more upon their Governments for providing all kinds of public utilities and financing primary and other industries, which in other countries arc left to private enterprise. Criticism is directed occasionally towards our large investments in Government, public body, and municipal loans, but mortgage investments on unimpeachable security to an extent sufficient to absorb our funds are not always forthcoming, and your directors can only face the actual facts, the outcome of which is indicated in the movement to which attention is directed. Valuation and Divisible Surplus. In the valuation of the policy liabilities the same stringent standard has been employed, viz., the assumption in the calculations that only 3 per cent, interest will be yielded by our funds, as has been in use for some years past, and after provision has been made in addition for all possible contingencies that can be foreseen, a divisible surplus of £3,005,538, excluding interim bonuses, is disclosed in the Ordinary Department and £230,291 in the Industrial Department. Including a sum of £29,080 paid as interim bonuses during the year in the Ordinary Department., these sums represent 58.1 per cent, of the participating premiums paid in the former and 15.9 per cent, of the premiums paid in the latter, the highest percentage of premium revenue in each department yet allocated by the Society. A new milestone, moreover, has been passed in the division of over £3,000,000 amongst Ordinary Department members. The reversionary bonuses now to lie declared in the Ordinary Department will be practically the same for all ages and durations as those allotted last year. In the Industrial Department, an appreciable increase will be exhibited. I desire to emphasize the fact, however, as specially pointed out in the report, that owing to the incidence of the increased taxation recently imposed by the Commonwealth and by the State of New South Wales, our charge in this direction will immediately be more than doubled, and that the Ordinary Department bonuses in the future must be reduced while that taxation lasts by about 5 per cent., for taxation can be provided from no other source. Taxation of institutions not carrying on business for purposes of gain, and of co-operative and mutual thrift organizations, is quite foreign to the fundamental spirit of both the State and the Federal taxation Acts, savings banks, friendly societies, etc., being all exempt from taxation. Indeed, mutual life assurance societies are the only institutions of this character which are taxed. Up to the present they have been taxed in this way only by the States. The Federal Parliament, to its credit be it said, has hitherto refrained, even during the war, from imposing income tax on mutual life assuranceoffices, and it is, I think, to be regretted that what is thought to be the imperative need for more revenue should have led to such a serious departure from the sound principles previously observed of exempting from taxation the sacred provision made by life assurance policy-holders for their dependents. Further, the funds of the Society (and a similar consideration applies to cognate institutions), large as they are, represent simply the accumulation of the small savings,, wisely cared for and husbanded, of an immense number of policy-holders, the average annual premium per policy in the Ordinary Department being only a little over £l2 and in the Industrial Department, slightly under £3. The vast majority of our policy-holders obviously do not come within the scope of the taxation Acts in their personal capacity, but through the medium of the Society are nevertheless taxed for no other reason than that they had the prudence to assure their lives.