CHAPTER XVI
THE NEW ZEALAND SYSTEM

The New Zealand system has been selected for presentation in the present book for two main reasons: (1) it provides for comprehensive, co-ordinated, universal coverage under a system evolved from earlier categorical programs, and (2) it presents an approach to the problem of relief and social security radically different from that thus far used in the United States. The New Zealand law approximates a system designed to give universal, comprehensive protection against want at something approaching minimum cost. In describing this system, we shall start with an over-all description, then take up the specific monetary benefits, and finally present summary statistics with respect to numbers by benefits and costs. We shall not go in detail into the health services which are part of the general system.

We are not considering the question whether New Zealand can as a matter of fact afford this new system. What a nation can afford with respect to relief and social insurance is a relative matter, depending in no small measure on what it does in other fields. The point will be made time and time again that if the nation makes financial commitments beyond its capacity to produce and market needed goods and services without a radical change in wages and prices, inflation may be the politically expedient way out of the dilemma. A radical increase in prices decreases if it does not destroy the real values of the benefits provided under the relief and social security system. If the real values are to be maintained, these benefits have to be increased, and if a new balancing is to be attained, they have to be increased at the expense of some other major categories of public expenditure.

New Zealand is a small dominion with only about 1.6 million inhabitants. It has had a dependent as contrasted with a self- sufficient economy. Its prosperity in the past largely depended on the prices it could secure from its exports, mainly products

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