T. —15.

unprecedented economic depression, for such an atmosphere has undoubtedly a very detrimental effect upon the position, and it is apt to be considered from a purely immediate financial aspect. I would draw your attention to the fact that the report of the National Expenditure Commission, upon whose recommendations the present Bill is based, was purely an economy Commission set up by the Government for the specific purpose of effecting economies in State expenditure, and the fact that savings were embodied in their report which did not even reach double figures is an indication of their thoroughness, their anxiety, and the extent to which they have gone to achieve that end. Previous Committees have been set up by the Government for the purpose of investigating the various Superannuation Funds, and to which the various organizations were to be given the opportunity of giving evidence. These Committees have never functioned, and I submit that the National Expenditure Commission investigated the position of the Superannuation Funds without hearing evidence from the organizations concerned, and with one object in view—viz., that of economy. I propose to show to the Committee that in spite of the fact that the Commission estimated an actuarial deficiency of approximately £9,000,000 in the Government Railways Superannuation Fund, and in spite of the fact that it has placed the responsibility almost entirely at the door of various Governments, it is now proposed in an almost unbelievable fashion to place the whole of the burden on the shoulders of annuitants and contributors, and to possibly reduce the contribution which is now being paid by way of subsidy from Working Railways Account; that is, provided lam justified —and I think I am —in assuming that the subsidy will be £1 for £1. In other words, the past liability of the State is now to be definitely and specifically transferred from the State to those who have fulfilled faithfully every part of their contract. Commencement of the Fund and the Contract. I suggest that on launching out on a superannuation scheme the Government did recognize the value to the State itself, and I might mention the inducements which were held out by the Government to the then members of the Service when the Government Railways Superannuation Fund was inaugurated on the Ist January, 1903. The provisions of the Act were explained to the men by the officers of the Department who toured the country. It was pointed out that superannuation definitely provided a certain retiringallowance at a specified age or length of service, and made all provisions necessary to ensure a reasonable allowance being paid during their declining years. They were cajoled to join the Fund, and the men accepted that assurance, many of them sacrificing the provisions they had already made for their old age. As is well known, the basis of a superannuation scheme is usually a contribution by the employer and the employee, although some schemes are actually non-contributory. In this instance, however, the Government made provision for a State guarantee of the Fund in lieu of a cash payment, and the State therefore came in as guarantor of any possible deficiency. In effect the solvency of the State was the solvency of the Railways Superannuation Fund. I propose to place on record section 19 of the original Act relating to the State guarantee, which reads as follows : — " In the event of the Fund at any time being unable to meet the charges upon it, and as often as such occurs, the following special provisions shall apply : — " (1) The Board shall forthwith report the fact to the Colonial Treasurer, setting forth the amount of the deficiency and the cause thereof. " (2) The Colonial Treasurer, upon being satisfied that the deficiency exists, and that provision is necessary therefor, shall, without further appropriation than this Act, pay into the Fund out of the Consolidated Fund a sum sufficient to meet the deficiency. " (3) The Board's report, together with a statement by the Colonial "Treasurer of his action thereon, shall be laid before Parliament within ten days after the receipt of the reports if Parliament is then sitting, or if not, then within ten days.after the commencement of the next ensuing session thereof." There will be no question, therefore, regarding the State guarantee of any deficiency of the Fund, as contained in the original Act under which original contributors joined the Fund. However, that is not all, for in order to afford more protection and inducement to the contributors, section 26 of the original Act provided as follows " The rights and benefits provided for by this Act shall be subject to all such modifications as may be provided by any Act hereafter passed in amendment or repeal of this Act : " Provided, however, that all benefits under this Act shall be conferred upon any person who has actually contributed, and shall remain in force and shall not be prejudicially affected by the amendment or the repeal of this Act." Such were the inducements held out to original members to join the Superannuation Fund, and I desire to emphasize the point that in lieu of a cash payment the State guaranteed the stability of the Fund and provided protection for contributors against violation of the contract and interference by future legislation. These provisions stand in the Government Railways Superannuation Fund to-day, and it should be remembered that although the Act was amended in 1907 by increasing the percentage of contributions from 3 to 5 per cent., and in 1909 by placing a limit of £300 upon retiring-allowances, no alteration was made to the conditions under which members joined the Fund prior to that time. No Government during the past thirty years has interfered with this contract between the State and its servants. To indicate the implicit faith placed in the scheme and in the Government's guarantee of the Fund at its inception, all but sixty-six out of a membership of 6,504 voluntarily gave their allegiance to the Fund. Thereafter employment in the Service was conditional upon joining the Superannuation Fund, and membership was therefore compulsory.

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