National Insurance was a planned system of

social security in Australia Social security, in Australia, refers to a system of social welfare payments provided by Australian Government to eligible Australian citizens, permanent residents, and limited international visitors. These payments are almost always administer ...

which would have provided medical, disability, unemployment and pension coverage to its contributors and their dependents. The scheme was passed into law by the Lyons Government as the ''National Health and Pensions Insurance Act 1938'', but was abandoned the following year in order to divert funds to defence.

Background

There were few serious proposals for a comprehensive

social insurance Social insurance is a form of Social protection, social welfare that provides insurance against economic risks. The insurance may be provided publicly or through the subsidizing of private insurance. In contrast to other forms of Welfare, soci ...

scheme in Australia before World War I, as it was seen as unfeasible. In 1911,

Joseph Cook Sir Joseph Cook, (7 December 1860 – 30 July 1947) was an Australian politician who served as the sixth Prime Minister of Australia, in office from 1913 to 1914. He was the leader of the Liberal Party from 1913 to 1917, after earlier serving ...

told federal parliament that "the more I think of it the more convinced I am that we must come ultimately to a form of national insurance which will give every man–the millionaire as well as the poor man–who has subscribed to his own insurance fund the right to receive that insurance, without taint of pauperism or charity, in his old age". Advocates of greater federal government involvement in healthcare were divided between those who supported centralised public health services providing

universal healthcare Universal health care (also called universal health coverage, universal coverage, or universal care) is a health care system in which all residents of a particular country or region are assured access to health care. It is generally organized ar ...

and those who supported contributory insurance-based schemes.

Bruce–Page Government

At the 1922 federal election, the Country Party's platform included plans for a national insurance scheme covering "sickness, unemployment, poverty and age". After the election the party's leader

Earle Page Sir Earle Christmas Grafton Page (8 August 188020 December 1961) was an Australian surgeon and politician who served as the 11th Prime Minister of Australia, holding office for 19 days after the death of Joseph Lyons in 1939. He was the leade ...

, a trained surgeon and strong supporter of the scheme, entered into a coalition with the Nationalist Party under S. M. Bruce, who became prime minister. In 1923, the new government announced plans for a comprehensive social services system that would "remove altogether the taint of pauperism". It subsequently established the Royal Commission on National Insurance under the chairmanship of Nationalist senator John Millen which ran from 7 September 1923 to 5 October 1927.

1938 legislation

The Lyons Government, a coalition between the

United Australia Party The United Australia Party (UAP) was an Australian political party that was founded in 1931 and dissolved in 1945. The party won four federal elections in that time, usually governing in coalition with the Country Party. It provided two prim ...

and Australian Country Party, was re-elected at the 1937 federal election on a platform which included a national insurance scheme covering both old-age pensions and healthcare. The strongest advocates of national insurance within the UAP were treasurer Richard Casey and former minister Frederick Stewart, while Prime Minister

Joseph Lyons Joseph Aloysius Lyons (15 September 1879 – 7 April 1939) was an Australian politician who served as the List of prime ministers of Australia by time in office, 10th Prime Minister of Australia, in office from 1932 until his death in 1939. He ...

was lukewarm towards the idea and many Country MPs were hostile.

Drafting and provisions

The government's legislation was largely modelled on its British equivalents and was drafted by British civil servants. However, unlike in the UK, administrative control over the scheme was to be vested in a National Insurance Commission. Its final form was largely due to financial considerations, with the legislation required the scheme to become self-financing as soon as possible. It ultimately included contributory schemes for sickness and disability, old-age pensions, payments for widows and orphans, and

child endowment Child benefit or children's allowance is a social security payment which is distributed to the parents or guardians of children, teenagers and in some cases, young adults. A number of countries operate different versions of the program. In most cou ...

. Many specialist medical services were excluded from the scheme, including anaesthesia, pathology, x-rays, venereal diseases, abortions, miscarriages and stillbirths. The health and pension insurance components (known as the Kinnear scheme after their author) were to be enacted separately to the unemployment insurance component. Although the Australian branches of the British Medical Association (BMA) were largely in favour of a contributory health insurance scheme, the medical profession ultimately came into conflict with the government over the scheme. The initial conflict was over the size of the capitation fees payable to doctors, with general practitioners claiming they would have to increase their workload in order to maintain their income.

Enactment

The ''National Health and Pensions Insurance Bill'' was introduced to parliament on 4 May 1938. The government sought to insurance swift passage of the legislation, as it had suffered losses in the

Senate A senate is a deliberative assembly, often the upper house or chamber of a bicameral legislature. The name comes from the ancient Roman Senate (Latin: ''Senatus''), so-called as an assembly of the senior (Latin: ''senex'' meaning "the el ...

at the previous election and wished to ensure passage before new opposition senators were seated on 1 July. Dissident Country MPs, led by

Hubert Lawrence Anthony Hubert Lawrence "Larry" Anthony (12 March 189712 July 1957) was an Australian politician. He was a member of the Country Party and held ministerial office in the governments of Arthur Fadden and Robert Menzies, serving as Minister for Transpor ...

and

Arthur Fadden Sir Arthur William Fadden, (13 April 189421 April 1973) was an Australian politician who served as the 13th prime minister of Australia from 29 August to 7 October 1941. He was the leader of the Country Party from 1940 to 1958 and also served ...

, secured several concessions.

Aftermath

In 1944, Richard Casey wrote to General

Archibald Wavell Field Marshal Archibald Percival Wavell, 1st Earl Wavell, (5 May 1883 – 24 May 1950) was a senior officer of the British Army. He served in the Second Boer War, the Bazar Valley Campaign and the First World War, during which he was wounded ...

defending the substance of the scheme and stating that it was inevitable that it would be revived after the war. He stated "it will be my bill and my scheme – and no argument and no playing-of-politics can gainsay that". Casey told journalist Jack Hetherington in 1964 that the decision to abandon the scheme was made “largely at Mr Lyons’ instigation, by reason of his belief that ..we could not finance it”. However, he wrote to

Fred Daly Fred Daly may refer to: * Fred Daly (American football), American football player at Yale, head football coach at Williams College (1913–1914) * Fred Daly (politician) Frederick Michael Daly (13 June 1912 – 2 August 1995) was an Aust ...

in 1956 that “on my own personal initiative, I recommended to Cabinet the withdrawal of the legislation ..for reasons that were connected with the quite obvious on-coming war”. Menzies recalled in later years that Casey had recommended to cabinet that the scheme be dropped to avoid political controversy.

References

Bibliography

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