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Wednesday, 16 November 1938

Mr CASEY (Corio) (Treasurer) . - I move -

That the bill be now read a second time.

Honorable members will be aware that certain difficulties have arisen in the preparations for the commencement of national insurance medical benefit. These difficulties have caused the Government to reconsider the programme for the introduction of national insurance which involves the proclamation of the three acts passed during the earlier period of the session. It will be remembered that, during the passage of the principal bill, I announced that medical benefit was . expected to commence in April next. I need not now describe the circumstances which have caused delay, but it is now evident that medical benefit cannot commence before May next. It is expected that the royal commission which is investigating certain problems connected with insurance medical service will make its report at the end of this year, but it will be necessary to consider that report, and for the National Insurance Commission to make the detailed arrangements required for the commencement of medical benefit. In view of these circumstances the Government has to consider whether it should proceed* with its original plan which, under the National Health and Pensions Insurance Act, would require payments to be made by insured persons during the period when medical benefit was not available, or whether it should postpone all contributions until May next, and aim at beginning both contributions and medical benefit simultaneously. The lattercourse has been decided upon. It would not have been necessary to bring down any further proposals had it not been for the Government's desire to maintain other parts of the intended programme. Delay of four months in commencing a long range plan of this nature' would itself be of relatively small consequence, but to set back the whole programme would result in embarrassing the organization of approved societies which have been established during the last few weeks, and delay, beyond the time intended, the commencement of cash health benefits, that is, sick pay. This bill is necessary to avoid the postponement of the activities of approved societies, and to enable them to continue as was originally planned. It is also necessary to place those societies in such a financial position as to enable them to commence their cash payments to insured persons who become incapacitated from work, at the time originally intended. This bill sets out to achieve this. This is not an amending bill, but a transitional measure which will have no permanent effect upon the national insurance scheme. The bill is strictly limited to the purposes I have indicated.

In this bill it is proposed to commence » national insurance in the following stages. It is proposed to give statutory authority for all approved societies on assent being given to this bill, and it is proposed that the National Health and Pensions Insurance Act shall come into operation as from the 1st January, 1939, except for the effects of the transitional provisions which I shall explain. It is part of the Government's plan to proclaim the acts relating to contributions to commence on the 1st May next, and there will be no liability for contributions from employers or employees until that date.

In the meantime, the approved societies will be put in the same position as they would be in if the whole of the programme had been adhered to. The Government recognizes that these societies must continue their work, that they must be provided with the necessary funds, and that their enrolling of members must proceed without interruption. By the provisions of this bill they will be put in a position bettor than they occupied previously, but there will not be quite the. same urgency to enrol members before the end of this year.

The bill before the House is largely a financial measure. It proposes to provide additional money from Consolidated Revenue during the present financial year, and the Government has accepted a large additional liability in this regard. The reason for this new expenditure is to enable cash health benefits - sick pay - to commence in July without disturbing the actuarial structure of that scheme. Under the principal act 26 weeks of contributions must be paid as a qualification for the payment of sickness benefit to an insured person. Because of the delay in contributions the proportion of the contributions required for that purpose would not normally be available before May. The Government therefore proposes, in order to avoid delay in qualification for cash health benefits, to make the necessary sums available, in the first place to the National Insurance Commission and through the Commission to the approved societies, which will be responsible for the benefit payments to insured persons. The amount actually required cannot be determined until the numbers of eligible persons are known, and until it is determined actuarially. The bill proposes to pay from Consolidated Revenue on the 30th June next the sum of £800,000 to the National Insurance Commission for this purpose. There will be a saving of £334,000 in the Commonwealth contribution to the National Insurance Pension Fund, the grant for which will not commence until contributions commence. There will therefore be a net increase of the Government's liability for national insurance during the present year of approximately £466,000. It is' estimated that this amount should very nearly cover the liability incurred under this bill, and the balance, which cannot be determined during this financial year, will become a charge on the budget for the year immediately following. It will be seen that the Government, having made what amounts to a. very substantial concession in respect of insured persons, proposes to pay the cost of that concession immediately. It will not pass on the liability to the future, and, as I have already said, the financial and actuarial structure of the scheme will remain intact.

I commend this policy to the House as one essential to maintain the principles of national insurance as established in the act passed last session, and as essential to the integrity of the scheme. It is a fundamental principle that the obligations entered into in respect of insured persons shall be provided for as the liabilities accrue, and shall not be passed on indefinitely to some future time. The guarantee of benefits provided under national insurance is accompanied by the necessary funds to maintain and unsure them.

The procedure laid down in the bill for crediting this money follows the procedure of the principal act, with only such variations as are consequential upon the transitional procedure. It is proposed that every insured person, by and in respect of whom six weeks' contributions have been, paid during the nine weeks from the 1st May to the 30th June, shall have certain additional amounts credited to him in the funds of his approved society. The credits will be made retrospective. Every person so insured after contributions commence will be credited with the share of contributions which would have been credited to the approved societies had contributions > been made, on the assumption that the insured persons were in full employment during the seventeen weeks between the 1st January and the 1st May. They will be made in respect of such insured persons from the 1st January if the insured person was a member of an approved society at that date. They will be credited to other persons from the time of their membership of approved societies after the 1st January, for each complete week from that date until the 1st May.

The bill provides certain other adjustments as between the Treasury and the National Insurance Commission, which are consequential upon these provisions, and which» can and will be explained in committee. None of these adjustments reduce the liability of the Commonwealth, but they are necessary to cover the first few months of the operation of the scheme, because of the other provisions of this bill.

It is provided in this bill that no person shall be deemed to be an insured person until the date of contributions, except for the purposes of this bill. As I have explained, these purposes are, first, membership of approved societies, and, secondly, qualifications for cash health benefits.

The bill is introduced in order to create conditions considerably more favorable to potential insured persons than those existing, and to deal only with the state of affairs in the early months of operation of the scheme. I commend the bill to honorable members.

Debate (on motion by Mr. Forde) adjourned.

Sitting suspended from 6.6 to 8 p.m.

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