L—Ha.

9. What is the maximum amount which a scheme like this will involve the colony in?—l have explained on previous occasions when I have been here that I have an objection to saying that I can give correct estimates for a long distance ahead; but I can form some idea, and I will give you that idea. Whatever is the initial subsidy required, that will have to go on increasing for a large number of years. I have been looking lately at the composite effect of all the payments for pensions, gratuities, and compensation, totalling £42,000 at present; and the £30,000 added on to that for the first year would make £72,000 to come out of the Government purse. It will never, I consider, be more than that. In the course of twenty years' time the £42,000 will have vanished altogether, roughly speaking. At that time the total yearly outgo will be very much less than the first year's £72,000 —very much less; but the £30,000 will have increased. It may have increased to £55,000 or £60,000. That will take the place of everything included in the present £72,000. After the first year £7,000 or £8,000 paid in gratuities will vanish altogether from the total, and so the £72,000 will not all be wanted by that much. Taking the £42,000 that is being paid at the present time per year, I consider: that possibly not more than £10,000 per annum over that sum will be wanted for the whole thing eventually. That is about £50,000. I ana speaking of fifty years' ahead or more. The amount will have increased to more than £50,000 previous to that, but will be likely to come down to, say, £50,000 as a permanency. That will take the place of everything—there will be no other outgo. 10. For how long will the amount to be paid under the Bill keep on increasing?—For a good many years. 11. Can you give us any idea how long? What I want to get at is what the colony is being committed to ?—I will still take the whole lot together—the £42,000 that is being paid now and the £30,000 proposed to be paid out, making £72,000 altogether. I estimate that in about thirty-five years' time the total amount will be about the same as that. It will be all on account of the Pension Fund then—there will be no other outlay... It will certainly have come down in eighty years' time to its final level—say £50,000. 12. Mr. J. Allen.] I understand that what you propose is a permanent appropriation of £20,000 a year, and in addition to that a contingent liability after a triennial investigation. Will you explain that?—lt is really summarised in my report of yesterday. I will read the portion dealing with it: " The sums so contributed should be used only for the purpose of meeting the portions of the current and future liabilities for which they were intended. That part of the contributions intended to meet a portion of the future liability should be accumulated at interest, andnotused for any other purpose." I call these accumulated contributions " the contributed fund." The future liability is principally for the pension at sixty; the current liability is the liability that may emerge at any time, on account of a man falling ill, for instance, or going out of the Service and having his contributions returned to him. The contributions should be ear-marked, as it were, to meet any current liabilities that may arise on account of them, but the great bulk of them should accumulate at interest to meet the future liabilities on account of those persons when they emerge as pensioners. The remainder of the current and future liabilities not provided for by the contributions should be discharged year by year as they emerge by the Government of the day, and no portion whatever of " the contributed fund " should be used for that purpose. I may explain in relation to that that at the present time there are nearly 300 men in the Service over sixty years of age who are eligible to come on to the fund immediately, and they could draw £28,500 straight away as pensions in their first year. On account of them alone there will be deaths each year, and so that amount will gradually diminish till it ceases altogether. But in one year's time, when it is diminished by a small sum, the men who are now fifty-nine years of age will come on to the fund and will increase that amount by more than the sum it will be diminished by through deaths; and in two years' time those now fifty-eight will still add to it. Only in the case of those over sixty will none of the amount be paid for by contributions. Those who are fifty-nine will pay one year's contribution. That will only provide for a very small proportion of their pensions. The Government will have to meet the balance of their pensions. The men who are fifty-eight will pay a slightly larger proportion. That will be reserved to meet their proper portion of the liabilities, and the Government will have to meet the balance, and for some years that will be principally paid by the Government, because there will have been no time for their contributions to accumulate to anything of importance. 13. You say that the liability with lespect to these older men will come on, they having paid one contribution to the fund, or none perhaps. Supposing they all came on, what is the provision in the Bill for meeting that? —This £30,000 asked for, at first. 14. But the Bill only provides £20,000? —Yes, and it follows therefore that if they all come on £20,000 is not enough, and that is the very reason why I have put down £30,000. As I have pointed out, it is immaterial, in this way: If at the end of three years' time you have been paying out more, you have been paying it out from the contributions temporarily, and when the adjustment is made at the end of three years it will be paid back. 15. I was going to ask what would happen when the adjustment took place?—An actuarial investigation of the contribution portions of the pensions will be made and the accumulated fund on their account will be ascertained, and it will have to be there; and I shall be able to make for the next three years a good approximate estimate. It will then remain for Parliament to vote the additional amount. 16. Can you give us any idea approximately what the additional amount will be for the next three years —the amount in addition to what we are providing in the Bill? —Yes. Take a concrete case. Supposing that exactly £27,000 is required in the first year, then I feel sure that about £28,500 will be required the second year, £30,000 the third year, and about £1,500 more in the fourth year —perhaps £31,500. That would be how it would go. At the same time I have pointed out that the total outlay from the public purse will not be affected much, because the gratuities, compensations, and the 1866 pensions will decrease by at least as much as that in these three years.

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