The New Zealand Times. TUESDAY, JANUARY 28, 1913. SOCIAL INSURANCE—BRITISH AND GERMAN

New Zealand Times, Volume XXXVII, Issue 8339, 28 January 1913, Page 6

The New Zealand Times. TUESDAY, JANUARY 28, 1913. SOCIAL INSURANCE—BRITISH AND GERMAN

It was quite natural tliat in framing his great scheme of social insurance now adorning the British Statute-, book Mr Lloyd George should have closely studied the German methods, since Germany had for many years set a fine example to the whole world in the way of national providence. Indeed, the British Chancellor has several times acknowledged that ho profited considerably from German experience. Nevertheless, the distinguishing marks of the National Insurance Act, when compared with the corresponding German laws, are declared by a close student to bo “a refreshing originality of conception, new points of view, and in some respects a deeper comprehension and a wider grasp of the problem at issue.” This opinion is given by Mr William Harbutt Dawson, in an article in the “Fortnightly Review” on “Social Insurance in England and Germany—a Comparison.” Mr Dawson, we may say, has high credentials as an authority on this subject. Ho is senior staff officer to tho Board of Trade, and has long been actively i engaged in educational and social work, studying closely various phases of life in Germany. Ho finished his education at the Berlin University, and he married a Gorman lady. His pen has produced a considerable quantity of literature interpreting German life and character to English people, particularly in expounding the systems of that country for the treatment ot social and industrial questions. Wo do not propose to burden this article with all the detail of Mr Dawson’s comparison, which is exhaustively complete, but rather to attempt to give a general idea of his conclusions.

Briefly, it is shown that the British system is at once the more simple and the more generous. Its benefits arc greater, more far-reaching, and cost recipients less. In comparing the several complementary laws of Germany with Britain’s provisions, it is necessary to ally the Old Age Pensions and the National Insurance Acta. Germany’s sickness insurance law was enacted as long ago as 1883, since when there have been many improvements and additions. This chiefly accounts for the fact that sickness insurance and invalidity insurance in that country are quite distinct and are separately administered, whereas the National Insurance Act makes the double provision in one system of insurance, administe;ed by one set of authorities, and covered by one contribution. The British method, Mr Dawson says, has recei/ed ungrudging recognition in Germany, Old ago pensions are a free gilt bv the State in Britain, but in Germany are on a contributory basis. In Britain the free pension is 5s a week (commencing at 70 years of age), subject to a reduction on a sliding scale where the pensioner is in receipt of other income in excess of £3l 10s. In Germany the old ago pension (also starting at 70 years) averaged 3s 2d a week, while the maximum claimable falls below 4s 2d. , The number of persons embraced by the different Insurance Acta in Germany, allowing for an important extension of the system made in 1911, amounts to 65 per cent, of the employed population; the corresponding percentage in the United Kingdom is 77, Analysis of the regulations governing allowances for sickness and disablement leads Mr Dawson to the conclusion that while the German law makes it somewhat easier to come into possession of insurance benefits, the National Insurance Act makes it much more difficult to bo dispossessed of them —which, as ho observes, is the really important matterd. Another very good point: “The effect of the various ameliorations enacted by the National Insurance Act for the purposes of limiting tho risk of lapses will bo enormous At the present time the proportion of the members of friendly societies who lapse in the course of a year owing to various causes ranges from 3 to over 6 per cent, and is probably on the average of 5 per cent. This means that on an ostibatod present total membership of, say, 6,000,000 separate individuals, a quarter of a million pass out of the friendly societies every year, and it is known that of these only a very small proportion return.” In respect of finance, the outstanding differences are the greater burden borne by employers' and workers in Germany, and the far more liberal degree of public aid given in Britain, where the State “acts the part of the fairy_ godmother in a truly munificent spirit.’ The total expenditure on sickness and disablement insurance in Britain is exexpected to amount in about five years, when the system gets into full operation, to £25,000,000, and at that time pensions will total some £13,000,000. Of this great sum of £38,000,000 the State will provide at least one-half; Germany, on the other hand, will bo contributing not quite one-oighth of the cost _ of her scheme from the public funds. .'lhe combined insurance contribution of tho

German workman is about 3 per cent, af wages; of male workers in Britain it is li per cent, on a weekly wage of a guinea and from 5 down to t per cent, in the case of highly-paid artisans. Speaking generally, both employers and workpeople in Germany pay tor sickness anil invalidity insurance about twice as much as those in Britain.

Mr Dawson makes it clear t.iat any invidious conclusion as to the absolute superiority of tho one system over tho other should not lie rashly arrived at, since allowance has to be made at cverv- turn for variations in tho national traditions, social usages, and distinclire viewpoints. What suits one country may not apply in another witn equal success. “For tho National Insurance Act it may fairly bo claimed, however, that it meets in a spirit _of marked accommodation and liberality the situation created and the expectations justified by the existence of a magnificent body of voluntary agencies which have for generations enrolled the (lower of the working classes in a united and victorious endeavour to combat disease and want, to encourage habits of prudence and thrift, and to strengthen the foundations of that healthy family life, which is tho first condition of national vigour and efficiency. Far from harassing or weakening the provident societies now on the ground, tho Act will give to each one a new start on conditions more favourable to numerical expansion, financial security, and the liberal treatment of its members than have ever existed before.”