The Dominion THURSDAY, APRIL 24, 1919. PENSIONS AND THRIFT
A return just issued 1 -by the Minister of Pensions (Mn, Myers) ehoAVs that during the past financial'year this country was called upon to meet a total charge of more than two millions sterling for pensions of all kinds. More than half of this amount wa« accounted for by pensions to soldiers and their dependants—an item which will still be increased considerable before the maximum is reached—but_ the heavy aggregate payments to civil pensioners 'strikingly attest the important place that State pensions have_ now taken, permanently, in the national economy of the Dominion. The outlay on old-age pensions particularly deserves attention. The charge last year under this head was over £743,000. It is true that a third of this amount represents an allowance (increasing the full pension from 10s. to 15s. per week), which was granted under the Finance Act of 1917 as a temporary concession in view of the enhanced cost of living. Nominally, the concession is subject to withdrawal when normal conditions have been restored, but experience goes to show that pensions concessions once made are seldom withdrawn. Unless a greater fall in prices occurs than is to be expected, it is unlikely that the reduction of the old-age pension to its, pre-war level will be suggested or considered. The number of old-age pensioners, absolutely and relatively to population, and the annual outlay involved have grown steadily since the system was inaugurated under the Act of 1898. In 1900-01, when time had been, given to bring the pensions .scheme into full operation, there were 12,405 pensioners, the annual outlay on pensions was £197,292, and the annual cost per head of total population was ss. Id. The corresponding figures for the past year are:—Number of pensioners (approximately), 20,000; annual outlay, £743,033; annual cost per head of total population, nearly 15s. Increases in the mimber and cost of old-age pensions have, of course, much more than kept pace with the coincident growth in population. Since 1901 the population of the Dominion'has increased by a little over 40 per cent. In the same period the number of old-age pensioners has increased by well over 50 per cent., and the annual charge involved has been almost quadrupled. Even without the allowance authorised under the Finance Act of 1917, oldage pension'payments during the past year would show an increase of nearly 150 per cent, over the corresponding payments in 1900-01.
Development on these lines no doubt will continue. The tendency is as time goes on not only to increase the amount of the pension, but to make additional concessions in regard to property disqualifications, and so to increase the number of elderly people eligible for the pension. The position reached is already striking. The total number of persons of pension age in the Dominion when the census of 1916 was taken was approximately 65,600. There are at present about 20,000 old-age pensioners, so that the oldage pension is being drawn by not far short of a third of those who arc qualified by age to receive it. It may be noted, also, that the average old-age pension is well up towards the maximum. In 191 V, when the maximum was £26 per annum, the average pension was £24 ?s. At present, with a maximum of £.39, the average pension is approximately £37. These facts and figures suggest that the question of State .action to encourage thrift and offer ''people an incentive to make provision themselves for old age is coming well within the_ scope of practical politics.- In view of the heavy and increasing calls that are being made upon the- whole community to .
provide old-age pensions, ifc seems only just that systematic provision for old age should bs extended more widely, and made as nearly as possible, universal. Nor is there any serious doubt regarding the lines on which action aiming at this result should proceed. The old-age pensions system in its present shape must, of course, stand for the benefit of those who fail, often through no fault of their own, to make provision for their declining- years. It is the one great defect of,this system, however, that it offers no incentive to personal saving, and, indeed, to some extent penalises thrift. At least a partial remedy for this defect seems to be available in, the establishment of a State system of contributory pensions supplementary to the old-age pensions scheme. In elaborating such a system it would be onlv* right that the State should subsidise contributions to a maximum .amount equalling pr even somewhat exceeding, the old-age pension. There is much to be said in favour of such a departure apart from the heavy and apparently inevitable increase in the annual cost of old-age pensions. The cost of subsidising such a scheme, of course, would be heavy, but the problem is rather one of readjusting _ national resources than of making a new call upon them. Full account linist be taken, also, of the important economic gains that would undoubtedly accrue from the systematic encouragement of thrift throughout the community. One result thatMnight be looked for would be the elimination of a great of wasteful expenditure, and it would be reasonable, also, to anticipate an appreciable stabilisation of industry. The possibility of establishing a State subsidised system of contributory pensions on a comprehensive basis all the more deserves attention since tentative steps in that direction have already been taken in this country. For instance, under'the operation of the National Proyidfint Fund the contributions of individuals are subsidised by the State in the proportion of twentyfive per cent., and'an annuity obtained under these, conditions does not .disqualify an individual in other respects eligible from obtaining the old-age pension. The benefits of the schemS are restricted _ to persons of limited income, but within these limits the contributions of its members arc in effect subsidised by the State to an amount considerably exceeding that of the old-age pension. The obvious line of progress seems to be to widen the scope of the National Provident Fund to the greatest possible extent, and set its advantages prominently before the public. It should be easily possible to offer such incentives as speedily make thrifty provision for old age the almost.universal rule. ' .
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Dominion, Volume 12, Issue 179, 24 April 1919, Page 4
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1,042The Dominion THURSDAY, APRIL 24, 1919. PENSIONS AND THRIFT Dominion, Volume 12, Issue 179, 24 April 1919, Page 4
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