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Comparing these proposals with the New South Wales subsidies, the following are the most important differences : — 1. This scheme restricts the subsidy towards sickness benefit to 2s. 6d. instead of the New South Wales payment of the whole benefit to aged persons and one-half to other extended sickness. 2. These proposals recommend a subsidy computed on the mortality experience by subsidizing the funeral benefit, and this applies to all members, whereas in New South Wales the subsidy is paid on the contributions of aged persons for funeral benefit. 3. It is not proposed to subsidize medical attendance, whereas in New South Wales this is paid for aged members. Ihe fixing of the sickness-benefit subsidy at 2s. 6d., instead of one-half for all extended sickness and the full amount for the aged, is on the principle that subsidies of any description to outside bodies must convey with them a financial responsibility on the body spending the money. It is to be expected that if the State pay the whole of any benefit the society's control over that benefit will be weakened. As to medical attendance, the Department does not recommend the subsidizing of a benefit that is the outcome of bargaining between societies and other parties. R. E. Hayes.

11EP0RT BY MR. A. T. TRAVERSI. ACTUARY OF FRIENDLY SOCIETIES. OX THE FOREGOING SUBVENTION PROPOSALS. Preliminary Rbmarks. At the outset it seems desirable to make clear the following points : — (1.) The subsidies as set out are evidently not additions to the benefits given by societies. (2.) There is a distinction between (a) the form in which the subsidies are to be given by the State and (6) the direction in which they will operate when received by the societies. For instance, the subsidy on death of a member is not to be looked upon as earmarked for payment of death benefits alone. It is simply a sum in aid of the objects of the society, of which sickness benefits usually form by far the greatest part; and it would therefore be more correct to regard it as an indirect sickness subsidy. In point of fact, it is roughly equivalent to a further sickness subsidy of 2s. 3d. in addition to the 2s. 6d. specifically set out; but the form in which it is given has the advantage of limiting the State's responsibility in respect of excessive sickness claims. It is highly necessary to leave the societies a substantial responsibility in this direction. (3.) Owing to the subsidies being practically fixed in amount they will be of greater relative help to those societies whose scales of benefits are lower. (4.) The liability of the State as proposed is very largely of a deferred nature, because the bulk of the subsidies falls in the old age of members. Effect on the Societies. In considering the effect of subsidies on societies, we must to a certain extent look separately at the existing members and at future entrants. In either case it is a primary necessity that the subsidies be applied, as far as possible, to produce financial soundness before any further benefit can accrue to the members individually. Where, however, a society is financially sound at present as regards existing members, and has an adequate scale cf contributions in operation for new entrants, the subsidies will enable the society to reduce its scale of contributions, or to increase its benefits, or both,-thus giving the individual member the whole value of the subsidy in the most direct manner. On the other hand, where the financial position of a society as regards its existing members is weak, and its scale of contributions to new members is inadequate, the subsidy, by relieving the society of portion of its sickness liabilities, will strengthen its position as regards existing members, and will render more adequate its contribution-scale for future members. In this way the members of such a society, both present and future, will gain the benefits of the subsidy indirectly, by the strengthening of the financial position of their society and by being partly or wholly relieved of the necessity of paying increased contributions or making other sacrifices to secure the soundness of their society. If the subsidies are more than sufficient to produce solvency for existing members or adequacy of scale for new members, then increased benefits or reduction of contributions to the extent of the surplus can be given. Ihe foregoing remarks show in a general way how the subsidies will operate. I now proceed to deal with the matter more particularly, mentioning by the way that the figures given are based upon the condition that the subsidies are a permanent grant. (a.) New Members. In the case of new members the standard of measurement is the scale of contributions, and the subsidies would enable me in carrying out my statutory duties to certify as adequate a lower scale than at present for future entrants, the standard of adequacy being reduced by the following approximate amounts : — Approximate Reduction in Standard of Adequacy for New Age at Entry. Members (per Anntim). 8. d. 22 ... ... ... ... ... ... 6 3 27 • ... ... ... ... 7 7 32 9 4 37 ... ... 11 9