The Waikato Times FRIDAY, FEBRUARY 25, 1938 NATIONAL SUPERANNUATION

Waikato Times, Volume 122, Issue 20433, 25 February 1938, Page 6

The Waikato Times FRIDAY, FEBRUARY 25, 1938 NATIONAL SUPERANNUATION

With the approach of the securnl half of the session interest is centred on the legislative programme that is to be submitted. It will constitute the mo;t important section of the Government’s: social programme and break entirely new ground. Although the main features of the national superannuation and national health insurance schemes were discussed by the Labour caucus recently no definite information has been made public, so that the forecasts are purely speculative. There is said to have been some difficulty experienced in reaching an actuarial formula with regard to superannuation. That is of interest because it been taken for granted that the scheme would not be on an actuarial basis. If it were there would have to lie created reserves that would run into many tens of millions. Indeed, it has been said that to make the scheme actuarially sound the reserve would have to be about half that of the National Debt. The existing superannuation schemes in connection with the Government are not on that basis, largely through the failure of successive Governments to make sufficient provision for the State payments into the funds. The only possible basis will be to make current payments out of current receipts and hope for an opportunity to create a reserve fund as the plan proceeds.

The Government is definitely pledged in many respects. It laid down in the election manifesto exactly what it would do in these matters, so that there can be no drastic restrictions. It is to be a national plan, without any mention of a means test. But the Government can exercise its own discretion with regard to the financial basis of the scheme. It need not, unless it so chooses, attempt to establish at once a plan that would give the maximum return. It could commence with a moderate scale of payments. In the light of the information obtained by experience adjustments could be made, and, if: circumstances warranted it, the scale could be revised. That might be a safer method of approach than any proposal to commence with payments on the maximum scale now deemed possible, with the risk of a downward revision in the event of national conditions making that essential. Further, that course might enable the controllers to build up a reserve fund, not with the idea of making the plan actuarially sound, but in order that they might have a liquid reserve that might be brought back into the accounts should the position warrant such a step. During the depression the Dominion had a most impressive lesson in the value of such reserves in connection with national fin-

Whcn at last this important measure reaches the House it is to be hoped that the Government will allow both the members and the public generally sufficient time to become fully seized of its provisions. The Prime Minister has stated that it will be the most important piece of social legislation introduced for very many years, and as it will affect everyone the Ministers will be desirous of carrying the people with them so as to ensure success. Both Australia and South Africa have plans undej* consideration, and there is also the health insurance scheme at Home with which to make comparisons. The line of approach that would probably make the widest appeal would be one which established a plan capable of being extended as population grew and the industrial activities developed. That would be a safer course Ilian the adoption of more ambitious ideas which might constitute a burden in the initial stages.