The Waikato Times FRIDAY, MAY 6, 1938 THE NEXT STAGE

Waikato Times, Volume 122, Issue 20491, 6 May 1938, Page 6

The Waikato Times FRIDAY, MAY 6, 1938 THE NEXT STAGE

The special Parliamentary Committee, appointed to report on the proposals to establish a national superannuation and health insurance scheme, has completed the hearing- of evidence. The final sitting was of unusual interest because the Prime Minister said that the Government did not intend to face up to orthodox methods. It was going to kick over the traces, and, financially, was not going to be harnessed to the chariot wheels of other countries. In view of the financial .proposals outlined by the Government, and taken to be within the scope of the usual methods of finance, Mr Savage's statement was unexpected, and the people will certainly await with interest the definite steps to be taken. They will, according to the Minister of Finance, mark the first departure from a policy of orthodox finance. Some months ago Mr Nash wrote to the London Economist, in reply to criticism of the financial policy of the New Zealand Government. He said that the methods adopted were along the lines as those of previous Governments, and also of the British Government, and so perfectly orthodox. If there should be any further criticism from that quarter, evidently the same line of defence will not be tenable, because, if the Prime Minister’s statement means anything, it is that the orthodox lines are to be abandoned.

The report of the committee will be presented to Parliament in due course, but that may be purely a formal matter. The actual measures may have been introduced by them, and what the Government proposes will be more interesting than the recommendations of the committee. But the report should have a certain value. It will show the conclusions reached by those to whom the Government referred the work of investigation, especially with regard to finance. Mr Savage referred to some “money system of the future,” but if the working of these important measures is to be dependent on it then the system must be one for the immediate future, for the Bills are to be passed and become operative by April 1, 1939. The obvious difficulty of some of the witnesses, especially the spokesman for the New Zealand Farmers’ Union, was to see how such widespread activities could be financed within the framework of the present system. It is difficult, and apparently it has caused the authorities to decide that the whole system must be altered. A new one is predicted. The change, whatever form it may take, will have to be a major one, because, on the basis submitted by the British actuary employed by the Government, the schemes will involve an expenditure of over £17,000,000 in the first year, and a great deal more in the second. Finance on that scale cannot be left in any indefinite state', and as the Government will not be “harnessed to the old orthodox methods” the introduction of the social legislation next session will give the country some idea of what the new system is, and what it is intended to do.

The important changes indicated by the Prime Minister will have been caused by this decision to extend the social services at once. The extension will be purely financial because the Minister of Finance has admitted that the services themselves are all in operation. They have been introduced, and developed, as opportunity offered, and the financial position of the country warranted, and there never has been any marked opposition to that policy. Further development was expected, but the Government apparently does not like the process. It has determined to extend pajunents at once, and as the schemes cannot be fitted into the existing financial system then the system must be altered. And, even then, the definite election promise will not have been honoured. It provided for a national system. The present plans provide for one limited by a means test, thus excluding a considerable section of the community. It does not include the home nursing and domestic assistance services mentioned in the election manifesto, and the country has yet to learn how the problem of unemployment is to be financed. The things that would have meant extension of social services have been dropped, and the heavy cost concerns the expenditure on what remains. It is to involve a break from that system which Mr Nash defended a few months ago, for the Government is to kick over the traces. It may oecur to many people, even in this age of motor transport, that .rhen the traces were kicked over there was no guarantee of either safety or progress for those in the vehicle.