SECURITY FINANCE

Wairarapa Times-Age, 18 August 1938, Page 8

SECURITY FINANCE

OPPOSITION LEADER’S REVIEW WIDE SPREAD OF TAXATION NET. ALTERNATIVES PROPOSED. (By Telegraph—Press Association.) WELLINGTON, This Day. “There is nothing free in this Bill at all,” said the Leader of the Opposition, the Hon Adam Hamilton, in concluding his speech on the second reading of the Social Security Bill in the House of Representatives yesterday. The tax-gatherer’s net was being spread to catch everyone, Mr Hamilton added, and the ultimate cost would work out at something like 2s 6d in the £l. “Boys and girls, aged from 16 to 20. will be brought into the tax-gatherer’s net,” said Mr Hamilton. “Not only will they have to contribute Is in the £1 if they are earning wages, but they will also have to register and pay the 5s annual levy whether they are earning or not. This will bring into the Treasury an additional £ 150,000 a year, taken from young people who are just starting to make their way in life.” Domestic workers had been exempt from employment taxation, Mr Hamilton continued, but now on a weekly wage of 30s and an allowance of £1 a week for keep, the domestic worker would be expected to pay 2s 6d a week out of 30s, as well as ths annual levy. That provision would bring in £50,000 in tax, taken from people whose services were greatly needed.

EXEMPTIONS ABOLISHED. The Minister of Finance, the Hon W. Nash:. “Will you tell them what they will get at the same time?" Mr Hamilton: “They won’t get anything in superannuation until they reach the age of 65.”, Previously it had been the practice to exempt the first £5O of a woman’s income from employment taxation, Mr Hamilton said, but now the contribution would be taken from all income. This would mean a direct tax of £200,)00 a year on women, many of whom were in straitened circumstances. Similarly, relief workers would be required to contribute another £200,000. “The Minister has been making great claims about free doctors, free medicines, free hospitals and free maternity services," continued Mr Hamilton, “but actually there is nothing free in this Bill. Every one will be required to pay Is in the £1 in direct wages tax, Is in the £1 in other taxation, which will be diverted from the Consolidated Fund, and other 6d in. the £1 to meet'the cost of unemployment relief. Everyone aged 16 years and over will have to pay 2s 6d in the £l.” The mounting cost of social services was referred to by Mr Hamilton, who said that the total amount involved had increased from £7,144,000 in 1935, to £11,872,000 last year, with an estimate of £12,774,000 for the current financial year. In 1940 the cost would be £21,000,000, which meant, that expenditure would have trebled in five years. SUPERANNUATION DELAYS. The superannuation scheme outlined in the Bill, said Mr Hamilton, would give the people 3s lOd a week when they reached the age of 655, provided that did not happen before 1940-41, with an increase of lid a week in each succeeding year. The first people to receive the new superannuation in two years’ time would get 3s lOd a week when they were 65, 13s 5d a week when they were 75, 23s Id a week when they were 85, and 30s a week when at the age of 91. “The person who reaches the age of 65 in. 1941 will receive the full pension of 30s a week when he is 90 years of age,” Mr Hamilton added, “and the person who is 75 • years of age today will receive the full pension after he has had his 102nd birthday. “The fundamental of superannuation is that it should be divorced from other schemes and that its finances should be kept entirely separate. Under the Government’s scheme superannuation finance is mixed up with pensions finance, health finance and the Consolidated Fund and we will never know whether or not the fund is really sound.. Under the scheme advocated by the Opposition, finance will be kept separate and funds will be held in trust for the people.” OPPOSITION’S CONCLUSIONS. Mr Hamilton recounted the conclusions reached by the three Opposition members who sat on the National Health and Superannuation Committee and stated in conclusion that there was no dispute between the Government and Opposition regarding increased social services. However, the application of the Government’s scheme called for close investigation. “We favour the operation of a superannuation scheme long before 1967,” Mr Hamilton said. “With regard to pensions,- we hold that it is better to play safe and keep to the rate we can pay for certain, rather than risk the Government’s gamble and the possible crash of the whole system. As for a health service, it is better to provide a full service for those who need it .han a partial service for many who do not want it.”