Wairarapa Times-Age MONDAY, JULY 25, 1938. A HASTY ENDORSEMENT.

Wairarapa Times-Age, 25 July 1938, Page 4

Wairarapa Times-Age MONDAY, JULY 25, 1938. A HASTY ENDORSEMENT.

to the Government, whose policy proposals it endorses unreservedly, the report of the National Health and Superannuation Committee of the House of Representatives must be classed as an extremely disappointing document. Its weakness is nowhere more apparent than in the concluding section in which it touches, rather superficially, on national production, and goes on to declare that:- — ;We are confident oh the evidence of past years that it is within the capacity of the Dominion to extend production sufficiently to carry out the scheme, and we believe that it may well be found that it has made a large contribution towards a more rapid development of the country. » Setting aside the important question of the equity of the adjustments proposed, there is no evidence in the report that the committee has made any serious attempt to estimate the ability of the Dominion to meet the financial demands the scheme will entail. It is observed that in liis report placed before the committee,' the actuary (Mt G. H. Maddex) estimated that the total cost of the benefits under the Government’s proposals, including .administration expenses, would be £17,850,000. No mention is made of the fact that the. actuary also estimated that the expenditure would rise steadily from that figure to about £20,400,000 after five years and to £21,900,000 after ten years. The committee’s asserted confidence that this great and increasing expenditure can be met is very poorly supported.' On grounds that are left, for the most part, to the imagination, the committee anticipates a continued increase in production and in the national income.' Unfortunately, however, we have had in this country the' experience of very considerable increases in production bringing additions neither to the aggregate of private incomes in the Dominion, nor to the volume of consumers’ goods available to its people. Over a period of years the national income has fluctuated heavily and it is quite likely to do so again. In 1933 it was 90 millions. As recently as 1934-35 it was 103.1 millions, in the following year 120 millions and in 1936-37 it rose to 150 millions. Generally this national income (i.e., aggregate of private incomes) runs in a fairly constant ratio to our returns in export trade, and it must be expected that it will continue to do so until considerable further strides have been made in the - expansion of secondary industries in the Dominion. When total returns from exports fall, the national income falls in sympathy and by ef much greater amount. On these occasions, too, the resources of the Dominion are further narrowed by the fact that oversea debt charges, and some other externa] payments, have to be met on an unreduced scale —that is to say, they absorb a considerably larger part of the Dominion’s available resources than in better times. An assumption' that the national income of the Dominion will continue to expand steadily is simply theorising which rests on no ascertained basis of any kind. The committee does not strengthen its case by citing an increase in the national income of the United Kingdom from 2,038 millions sterling in 1907 to 4,926 millions in 1935. The United Kingdom and New Zealand are far from beingparallel examples and in any event a very great part of the apparent increase in the British national income is accounted for by monetary inflation. Other leading sections of the report arc as unimpressive and unconvincing as that in which the committee has touched upon the financial basis of the health and superannuation scheme. Having approved superannuation on the basis of a means test, for example, it nevertheless recommends thq Government to “consider the extension of the scheme to provide a gradual increase in allowable income until universal superannuation is realised.” In a preceding passage, however, it is pointed out that universal benefits would double the cost of superannuation. The committee has presented no convincing evidence that the country will be able to bear, in such conditions of trade and industry as may easily arise, even the cost of the limited, means test scheme which is about to be put into legislative form.