FROM FINANCIAL STATEMENT

Nelson Evening Mail, Volume LXIII, 3 August 1929, Page 5

FROM FINANCIAL STATEMENT

STATE SUP)BIRAIYNUATF.ON f 1 (By Telegraph) (From “The Mail's'' Parliamentary Reporter). WELLINGTON, Ist, August. As I have previously indicated, the question of investigating the financial position of (lie State Suneraiimia’Uoil Funds—i.e., the Public Service, Railways, and Touchers’ Funds —lias occupied a great deal of my attention.' My investigation showed that Hie financial position of these funds is even wonse limn I had thought. The cash shortage on account, of current pensions alone, which should have been covered by Slate subsidies in the past, is over £2,000,000. This huge shortage has arisen from the neglect in the past to pay the subsidies which the. Actuary has certified from time to time, in terms of the Superannuation.- Act, afs necessary to make up the amount required to pay the pensions of the) public servants who have already retired. The pensions, of course, have been paid, but partly out of the contributions of tho officers at present in the Service, which contributions should bo accumulating against their own pensions. Through the loss of interest mus entailed, the failure to pay the subsidies required in the past has been cumulative in effect, with the result that a large and permanent increase in the subsidies, with a corresponding additional charge on taxation, is now required to rehabilitate and maintain the funds on their present basis. The position has been further accentuated by a mistaken policy of early retirements and other concessions granted, apparently with-* out due consideration as to their effect on the Superannuation Funds. It is certain that a change must be made in the policy of automatic early retirement now operating; As a matter of fact, sho position of these funds is such that it is a question whether a radical change in the whole basis will not be necessary. The whole matter is so complicated and so farreaching in effect that, with the short time at my disposal and the general pressure of work, it will be quite impossible for mo to deal with it in time for amending legislation to be brought down this session. Moreover, the matter is of such outstanding importance not only to lho Public Service but to the taxpayer, that I propose to set up an inquiry as soon as possible to investigate {lie position thoroughly and report. to the Government on the state of the funds, and generally as to what* should be done to-place) superannuation for public servants on a satisfactory footing. In addition to these matters affecting Government employees), I have also under consideration requests regarding salties. The superannuation question, however, is in my opinion first in importance, and until the Government can see a clearing-up of the requirements in this connection I find myself unable, in view of the financial position generally, to take any action in the direction of adjusting salaries, other than is brought about by promotion and regrading under the law.