Compulsory Insurance in Order to make Provision for Old Age and Accidental Permanent Disablement.

Mr President and Gentlemen,—

The administration of charitable aid, the relief of the needy and infirm, and the advisability of pensioning those who from old age are unfortunately unable to maintain themselves, has now become a very serious and important question in this Colony.

In the short address I am about to deliver, and in the time prescribed by the rules of this council, it is impossible for me to touch on all the ramifications of the charitable aid and relief questions. I shall therefore at present restrict myself specially to the subject of Compulsory Insurance in order to provide pensions for old age, and include those also who suffer from accidental permanent disablement.

Allow me here to remark that I am greatly indebted to the New Zealand Times for having given publicity to several letters that I have written on the question of provision for old age. In the course of my arguments I shall have occasion to refer to observations contained in them. I would like to add that the prominence our morning paper gives to leading social questions and its unflinching advocacy of our Liberal platform entitles it most worthily to the earnest support of every member of this association.

The first argument that will open out on this matter is, Upon whom devolves the responsibility of assisting the unfortunate aged and destitute? Shall it be the State, private benevolence, Friendly Societies, Trades Unions, or Assurance Associations? I will not immediately discuss the relative share that each should bear of this load, and what is expected from them respectively; but will draw your attention to the positive fact that in our midst we have numbers who are afflicted and who are destitute in their old age, and now we have to grapple with this stern reality and do our best in mitigation of suffering.

I will admit that it should be, or should have been, the bounden duty of every individual to make or to have made, if at all possible or practicable, some investment or laid by some store to aid him in his declining years should he need it; but what should be is being neglected and omitted, and what should have been done by many is past and irretrievable, and the result is, the old and infirm stand before us in their helplessness and with their poverty-stricken surroundings. I therefore contend that whilst the best system and plan for relief is being argued and thought over by various philanthropists, statesmen, and political economists, this at least has to be done forthwith by the State—it must step in and provide for these indigent aged to the following extent and in the manner I will shortly define.

Before proceeding further, I am desirous of explaining that in my proposals and scheme the same advantages and benefits that may be extended to males should be given to females. In contemplation of the Female Suffrage Bill shortly becoming law, I know of no reason why, in the investigation of this subject, men and women should not be treated with the same consideration and equal solicitude.

Reverting to what the Stove must do, I assert that every old man or woman who Las reached the age of 70 and is infirm and needy, may demand support from the public funds.

When an infant is left without parents or guardians, or when a child is left with an estate and no administrator, the Government intervenes, and says these are so-called wards in Chancery, and we have to exercise supervision over them. So it should be when mortals have reached the allotted span of life and become incapacitated poor, and unfriended, and still live on. Then the State may, in the cause of mercy and humanity, come to the rescue, and consider that these have become our wards and we will allow them, say, 10s per week for their sustenance for the rest of their days.

You will note that I divide my scheme by differentiating certain stages of life in the age of the individual. After the age of 70 I believe there will not be many objectors to my proposals for relief; and, further, too many questions need not be asked, or rigid enquiries made of applicants who have reached this age. Beyond the necessity of guarding by legal enactments against persons from other colonies and countries flocking in to participate in our benefactions, I think we can easily prepare an Act, doing justice and Combining mercy therewith, for the purpose of making provision for those exceeding 70 years of age.

The most important question comes to the front at this stage, Whence the fund to defray this charge? From what source shall this additional burden on the community be drawn? You are all sympathetically and compassionately disposed, of that I am convinced; yet that alone is insufficient; we have a financial problem before us—Where is the supply to come from? The answer is, from wealth that has been amassed, from real and personal property that has grown enormous, and from the accumulations of the opulent. It is difficult to tax every wealthy individual fairly and equitably whilst living, but when death interposes and is the victor, then our purpose can be effected and we can the better carry out our object of drawing from the accumulated wealth fund.

We have an Act in force here entitled the Deceased Persons' Estates Duties Act, and the consolidated revenue of this Colony occasionally reaps a harvest from the taxation already imposed by this Act. Let me give you a solitary example of what has just recently occurred. The value of the estate left in New Zealand by the Hon A. G. Tollemache was £464,201 15s 11d, on which £35,640 Probate Duty is payable to the Government. You can see for yourselves by search in the Supreme Court what duties are coming in from all the other various deceased estates. It is all, however, required by the present needs of our Government; even the probably accruing amounts from that quarter are assessed and anticipated in the annual Financial Statement of the Colonial Treasury. In order to effect our aim and purpose we shall have to put on a little extra scale of taxation in that direction. For your information I will read you the clause showing what we now obtain from this source. Here is the Schedule—On the estates real and personal of deceased persons upon the final balance of the estate—not exceeding £100 no duty. Upon any amount exceeding £100 but not exceeding £1000 £2 per cent. Upon any amount not exceeding £5000: on the first £1000 £2 per cent and on the remainder £3 per cent. Upon every additional £5000 or any part thereof up to £20,000 as follows: On the first additional £5000 or any part thereof £4 per cent. On the second additional £5000 or any part thereof £5 per cent and on the third additional £5000 or any part thereof £6 per cent. Upon every additional £10,000 or any part thereof up to £50,000 as follows: On the first additional £10,000 or any part thereof £7 per cent. On the second additional £10,000 or any part thereof £8 per cent and on the third additional £10,000 or any part thereof £9 per cent. Upon any excess over £50,000 £10 per cent. Let me stray for a few minutes from my subject and mention what I sometimes see in the Illustrated London Weekly newspaper, a periodical that makes it a specialty to report the probates and wills of the wealthy and aristocratic circles in the United Kingdom of Great Britain and Ireland. You may therein read, as I have, that, out of say 20 estates, the ordinary weekly number, and these estates will now and then range from £50,000 to £500,000, rarely has there been a legacy to charitable or benevolent institutions, educational establishments or for the cultivation of the arts and sciences. When this is done it is exceptional. I find that in the largest majority of the deceased estates reported, the bulk of the property real and personal is left to the relatives of the deceased. Beneficent and generous deeds for the good of the public are few and far between. The inference you will draw from this is, that these wealthy men and women could not whilst living have done their duty toward the poor and unfortunate classes of society. I am not invited here to moralise, and I fear, when I allude to man's duty to his fellow-man, I am trenching on delicate ground. I will therefore retrace my steps. We must again have before us the deceased Persons Estates Duties Act.

I would advocate a few brief amendments thereto. To the schedule already in force I would add 5 per cent on all estates exceeding £25,000, 10 per cent over £50,000, and 15 per cent over £100,000. Here is the source whence this charitable contribution for the help of the very aged poor should come (those exceeding the age of 70), and I am sanguine enough to believe that the amount derivable from this specially increased probate taxation will be found ample and sufficient for our requirement.

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It should be a comfort and a solace to the wealthy and very opulent, when the hand of death approaches, to know and feel that a portion at least of their riches will he mercifully and charitably distributed by the Government of the country in which they have been so fortunate and prospered.

The easiest part of my task is completed in endeavouring to deal with the few, I hope I may say, very few, who would be applicants for aid after reaching the age of 70. I have brought these forward first as being the most helpless people, to whom we cannot refuse assistance and whose cases are therefore the most urgent. The formation of a National Assurance Fund to make provision for those who have reached the age of 60 is the second part of my project and will be found the more difficult problem to solve. There have been so many schemes already propounded that one is at a loss which to accept or approve of. However, it has to be grappled, especially as at this period of life 60 years is the time when age and infirmities most frequently begin to make themselves felt, and, although the party may not be entirely incapacitated from work, yet assistance is then often needed and these appeals become so painful and distressing. Now what should every man and woman in the community have clone in their individual capacity to entitle them to relief. This is the point that has caused the difference and contention with so many who have taken the subject in hand. I fear it has been made too much of an actuarial question, the calculations have been regulated on payments for life annuities in insurance companies, and has not been sufficiently made a state policy question; that is primarily to regard it as an experimental method to endeavour to benefit and improve the condition of a number of our aged people by an attempt to inculcate in the minds of the young, methods of prudence and foresight. At present we have scarcely any examples of long standing National Assurance before us, we must, therefore, work along tentatively and be satisfied to gain experience as the good and noble work progresses.

In the investigation of this National Assurance some contend for an allowance to the aged, of 5s, 6s, 7s per week, even to the extent of making it 17s 6d per week and insist on a payment, at an early age, of £30 to £40, in order to become entitled to such pensions. The writers and philanthropists who hold these varied opoinions and whose views differ so materially cannot all be right and the probability is a compromised amount between the lowest and highest scale will be submitted to by all and become acceptable. I would suggest that the smallest pension or allowance in this colony should be fixed at 10s per week. This is the lowest amount for which bare sustenance can be obtained. The pension must also be inalienable and not amenable to any process of law for the recovery of debts.

The payment to be made into the National Assurance Fund or Public Trust Office, by every man and woman in the Colony of New Zealand, over the age of 21, in order to entitle them to this weekly allowance, must be at least £10, payable in one sum by those who have the means, or, if through inability to do this, by instalments of 10s per annum or 1s per month until the whole sum of £10 is paid up.

I know full well that £10 paid in at the age of 21 will not satisfy the Government Insurance annuity scale, nor would it pass the actuarial calculations of any other life insurance company. This is not to be regarded altogether as a mercantile investment transaction, I with it to be considered as an important social question concerning the good of the people. To no inconsiderable number it will mean a great sacrifice to be called on to pay this additional £10 tax to provide for so distant and remote an object. I feel, however, that the desire is inherent to try and become self-reliant and to help one another to become so, and every effort will be made by the poorest to pay in their instalments in order to secure a right and thereby avoid being a dependent on charitable aid in their advanced years.

The plan that has been adopted in some Continental countries of making deductions from the wages of labouring men or tradesmen in order to secure an old-age pension, will, I am convinced, not recommend itself, nor meet with the concurrence of the colonial workman: he wants no interference with his wages or pay but he will conform readily to a Government measure of equal taxation on all, and will, I trust, approve of this being done in the mode I have just described. Later on I shall allude again to deductions from wages as practised in Germany.

We have gone thus far, and have now reached the most trying point—the real bone of contention, that which justifies me in calling my plan Compulsory Insurance. With reluctance and hesitation I now come to the difficult ordeal; but it must be faced, and the question arises, What is to be the penalty for non-performance of this obligation on the part of the individual? T would reply: The deprivation of all electoral rights, and the impossibility of being placed on any electoral roll in New Zealand until the provision for old age is made, by the payment of the amount named, or an instalment on account thereof. This measure would assist very materially in adjusting the registration of parliamentary and municipal voters both male and female.

I feel that this penal clause will not at once me t with your approval. After the struggle we have had to obtain universal suffrage, you will say, to disfranchise anybody is wrong and impolitic, and injurious to the liberal platform. I answer: In the course of your worldly experience you have all no doubt discovered that you have to pay for benefits and advantages. If you went to insure your life you must pay for it; if you wish to insure against accident you must pay for it. You have to purchase a deferred or immediate annuity if you require one and if you want benefits from Friendly Societies or Trades Unions you must pay for them as long as you live. I now offer to insure you, by allowing 10s per week in case of accidental permanent disablement, should it occur at any period of your life, however young or old you may be; and, further, offer 10s per week when incapacitated after the age of 60, and for the rest of your days. I ask then: Is all this not worth a payment of £10?

On the other hand, if you can show me a more feasible way than that of disfranchisement as a penalty for non-performance I am ready to submit, and will follow you. At the present moment I can think of no other forcible process. It may be owing to the fact that I am so wrapped up with my own measures that I do not see things in all their bearing. You will soon enlighten me with your opinions, and whatever they may be, it will not remove from my mind the strong conviction that the realisation of this scheme will bring peace and comfort to so many.

Need I mention that an important step this compulsory insurance, if passed into law, would be, and what vast incidents it would open up. There would become shortly available, let us say in the Public Trust Department, between two and three million pounds sterling of national assurance money; and before the year 1900 will dawn on us are we not likely to have a population in New Zealand of over a million people, and then we might safely infer that a quarter of this number would have paid their provision fees.

I will just cursorily glance at the various schemes that have already been proposed. If you are interested in them you can read for yourselves. The first on my list is that of Canon Blackley, demanding £10 before the age of 21, and then allowing 5s per week after 65.

Then we have General Booth, of Salvation Army fame, stating that everyone over 65 should, if in need, receive 5s per week: to realise the requisite amount additional taxation would be needed in the Old Country estimated at £17,000,000 annually.

Mr J. Fletcher Moulton recommends the public to purchase annuities for their declining years, and to extend the practice to children, especially daughters.

Mr Fatkin, in the Leeds Mercury, approves only of voluntary insurance as a provision for old age.

Sir Harry Atkinson, whose memory may be revered, also made efforts in endeavouring to establish a national assurance policy, and which is duly recorded in our own Parliamentary Hansard.

Sir Robert Stout brings forward a scheme and is desirous of allowing the aged the highest weekly pension yet named, it being 17s 6d per week.

Sir Julius Vogel is giving utterance to his opinions on this question in one of the English magazines, but I have not yet had the pleasure of seeing his line of argument.

The German scheme introduced by Prince Bis [unclear: narck] allows 4s per week to those over 70, and a compulsory deduction is made from the workman's wages, the employer adds a similar amounts, and this is further supplemented by the State. There is an annual subsidy allowed by the German Government towards defraying the costs and charges on the National Assurance Fund. You shall hear what the Fortnightly Review has to say on thus German workman's pension scheme:—

At first sight there seems to be much to recommend it. The theory that the master page 4 contributes one-third gives to it the semblance of a benefit to the workman, while the obligation on the master to pay makes collection simple. But the contribution by the master is more apparent than real, for it is impossible to prevent this contribution being taken into account in the adjustment of wages which are continually varying. The master will regard it as part of the cost of the labour of the workman, and thus it will lessen the amount that he is willing actually to hand over to him in return for his labour. In the long run, therefore, it will tend to diminish the wages paid to the workman, and will be borne e facto by him to that extent. But here the fatal difficulty as to forfeiture comes in. If a man fails to contribute for live years he loses the benefit of the pension scheme. It will be unfair to make him continue to pay, and thus he will have the present advantage over his fellows that he is free from the scheme so that the master is no longer under the obligation to pay on his behalf, and he will get higher wages than his fellows because no contributions to the pension fund will be deducted directly or in directly from his wages. To be consistent, the Government ought to compel the contribution from the master irrespective of whether the individual workman in respect of whom it purports to be made, would be benefited or not, but this would too plainly [unclear: recal] the real nature of the impost, i.e., a general tax on labour for the purpose of defraying the expense of relief given to the aged poor.

The difficulties of these schemes and the probability that they would only divert and not increase the savings of the working classes, has led to the third class of schemes, viz. those that boldly propose that the whole of the cost of the pensions should be borne [unclear: b] Government and [unclear: defrafted] out of general taxation. In other words, the supporters of these plans propose that every person above 65 years of ago should receive 5s a week from the State. There is much to recomment this proposal. It leads to no difficulties in the way of collection or forfeiture. It does not divert the savings of the poor into channels not chosen by them. In administration it would cost far less than any other scheme. Little can be said against it, except, that it would require that an annual charge of some twenty millions should be raised by general taxation for the pur pose!

My attention is just directed to the following newspaper extract:—

The Prince of Wales, Lord Brassey, the Hon J. Chamberlain, Mr C. T. Ritchie (late President of the Board of Trade) and Mr H. Broad hurst, M.P. for Nottingham, are among the members of the Royal Commission set up to enquire into the question of making provision for the aged poor. The Times condemns the exclusion of members of the clergy of the Church of England from the commission.

In Denmark the law came into force in the year 1891 that the aged poor should be supported by the State and receive a weekly stipend. In Russia an order has just been issued by the Minister of Finance, that in every workshop employing more than 5 workmen deductions shall be made from wages, somewhat on the same plan as rules in Germany.

His Holiness the Pope, in his last Encyclical Letter, advocates the cause of the aged poor with intense feeling of tenderness, solicitude, and benignity. The head of the Roman Catholic Church is their grandest and noblest champion. The rights and dignity of Labour is also made the subject of one of the most eloquent and impressive appeals in this Papal exhortation.

In France and Italy the subject is under investigation and I am not in a position to furnish you with the results.

The Hon Mr Chamberlain, of Birmingham, propounds the following:—That every workman shall pay in £5 before 25, the state to add a bonus thereto of £15, and then he must continue to pay £1 a year until 65. He is then entitled to receive a pension of 5s per week. Women to pay £2, bonus by the state £8, and at 65 receive 3s per week. Why this difference between male and female? I do not altogether see the justice or grace thereof, rather to add to the comforts and conveniences of the weaker sex would be our colonial feeling and to allow them a few extras.

I could enumerate other plans but the foregoing sufficiently proves that the subject is engrossing the attention of many prominent leaders of society. I am glad to see, too, how eager the public are to learn all about these pensions, it is significant and manifests a desire to be of service one to the other. The great defect to my mind in all the proposals is the want of a system making it compulsory, and which I regard as essential in carrying out the noble idea that poverty and destitution in old age must be unknown in the land we live in.

A word or two with the Friendly Societies, the Odd fellows, Foresters, Druids, Rechabites, and kindred societies. I learn that these widely spread institutions do not as a rule make provision for old age for their members, and who may have paid contributions with regularity for 30 or 40 years, many of them never having received a single pound benefit during the whole term of their membership; yet, if they reach old age and are destitute they have no claim on the funds of their respective societies. It is deplorable to think that so-called Friendly Societies should exclude their members from receiving benefits, if they are only a few months in arrears, regardless of how many years they may have been contributors. I regret very much to hear this; probably the same conditions are to be found in trades unions. It is therefore the more convincing that private efforts are insufficient and that it is only the State that can bring everyone into its fold of National Assurance.

It is only by everybody being compelled to pay his £10 that an approximate amount will be realised necessary to carry out the plan. Before I conclude I anticipate being asked, why you have forgotten that there is already machinery in force here to purchase an immediate or deferred annuity, for instance the Government Life Insurance have it prepared for you. It is so, but I will give you one or two examples of its work and I leave you to draw your own inferences.

Supposing you are 40 years of age, and being a male, you wish to purchase an immediate annuity of £6 7s 8d—about 2s 6d a week, you have to hand in the sum of £100; and in case of death it is gone, for there is no surrender; or, should you be a female, for your £100 you will only get an annuity of £6 0s 4d. Another example: say at £50 you are desirous of purchasing an immediate annuity, your will receive £7 11s, about 3s a week. At 60, males receive annually £9 12s 8d; females, £8 16s 4d. Poor interest this in New Zealand for your £100, especially when subject to no surrender. Therefore, in discussing our matter we need not take the Government Life Assurance as applicable.

This I am assured of that although the people pay for a right, the high-minded feeling that permeates all our New Zealand colonists will induce them to battle on bravely and independently without availing themselves of their right to pension as long as possible. I hope I only re-echo the sentiments of one and all here assembled when I state that it would be a mercy and a blessing never to need or to have occasion to ask for the benefit derivable from this national fund. Sir, I will now listen with the gravest concern to the opinions of our members here, and await with anxiety to hear the views of the Auckland, Christchurch, Dunedin, and other Liberal Associations; for you know our organisation is extensive, and in the multitude of counsellors there will be found, I trust, one or two who will give me a little encouragement to persevere in the effort of making compulsory insurance the law of the land. I have concluded my task, and am grateful for your marks of approval: have only this to add, that I believe we may rely on the Government bringing in a measure during the next parliamentary session. I understand the Minister of Justice is preparing a Bill on the subject. Your opinions and resolutions will not be slighted by the Ministry. The aims and aspirations of Liberal Associations accord with those of our Government: they are the welfare of the people, the advancement, and prosperity of New Zealand.