WAR TAXES RETAINED

Bay of Plenty Beacon, Volume 10, Issue 23, 11 September 1946, Page 3

WAR TAXES RETAINED

MR W. SULLIVAN’S CRITICISM THE RECENT BUDGET A trenchant criticism of the Budget was made by Mr W. Sullivan (National, Bay of Plenty) during his speech on the Financial Statement in the House of Representatives. . “This is the second peace-

time Budget which the Minister o

Finance has presented, and in its proposals we find the retention of almost all war taxes,” he said. “Most of the sales tax remains, and what does remain amounts to about four times what the sales tax totalled when the Labour Party came into office. Postal rates are still doubled, and the super-tax for war purposes remains what it was. During the last year or two the cost of social security has doubled. There is no relief whatsoever for the smoker, or for the man who likes his glass of beer. The Minister of Finance announced recently, on the other side of the world, that he was going to bring down an election winning Budget. All I can say is that he is entirely out of step with the rank and file people of New Zealand. Ido not think that the Budget he has brought down will tickle the toes of the taxpayer, and I do not think that he has a hope of winning the election with it.”

Mr Sullivan said he had hoped that the national security tax would have been reduced, and he would say unhesitatingly that the average worker had a right to expect a remission of that tax. If there was any tax that should have been taken off first, it was that tax. The Minister, also, should have given some consideration to relief of taxation on tobacco. “In 1940, the ordinary tax on beer amounted to £1,378,999, while in 1945 it had grown to £2,308,60 —an increase of £929,601,” he remarked. “That is under the heading of ordinary taxation. Under the heading of war taxation we find that the Government received £113,261 in 1940, while in 1945 it received £1,712,578 —an increase since 1940 in respect of ordinary taxation and war taxation on beer of £1,528,918. Yet, the Minister could not see his way to make some concession so the drinking public. Let us see who gets the most out of the price of a 10-ounce blass of beer. The Minister of Finance gets 3d, the hotelkeeper 3.1 d, and the brewer •od. The Minister should have shown some consideration to the man who likes a glass of beer and eased up on taxation to the extent of Id or 2d on a 10-ounce glass of beer.” Mr Sullivan said that most of the directions in which the Minister had given some reduction had been strongly advocated by members of the Opposition—they had advocated the abolition of sales tax on all building materials and furniture. The Government should have taken this tax off immediately the war was over, and the Minister had rendered a distinct disservice to every returned serviceman who had already returned and built his house because he had had to pay that tax. Now that the Minister had taken off the tax, no doubt because it was in the policy of the Opposition, he had depreciated the assets of those people by the amount of tax in the cost of their building materials and furniture—that is, the people who had already purchased. “I say it is a distinct injustice to every returned serviceman who had already built and furnished a home,” he said. The elimination of the excess profits tax was another matter distinctly advocated by members of the opposition.

Stressing the question that private industry must have an opportunity to expand, and quoting the Budget statement regarding the encouragement of the production of meat and dairy produce, Mr Sullivan said that over the last few years farm production under almost all headings had declined—and that at a time when the United Kingdom was calling out. for food and when Europe was short of food. From 1941 to 1944 mutton production dropped by 12. per cent., and between 1942 and 1944 the production of pig meats dropped by 30 per cent. Butter production had gone down over the last year or two by 18 per cent. The Government said it wanted to increase production but it should retalise that the two legs of prosperity were farming incomes and factory output, and if the country desired to prosper, all must work together. Mr Sullivan said he was sorry that the Budget offered no relief so far as the producers were concerned. It was reliably claimed that the increased prices to be paid by Britain for primary production would amount to about £5,500,000, and Mr Sullivan said he would like to know just how much of that' increase was to be paid to the prowhole of the increase was to be paid

into the Stabilisation Account, then ducers. If the Minister said that the he (the Minister) was going to defeat the object of the United Kingdom in giving the increased price if he was not going to pass the benefit on to the producers. “The primary producer in this country does not really want increased prices,” said Mr Sullivan. “What he really wants is reduced costs. He is sane enough and knows quite well that sooner or later the producers will have to face up to competitive prices from other countries which supply the United Kingwom. If we have our cost basis on a lower scale we are going to be in a much better position to compete with those other countries than if we build up prices around our producers and then have to chase up our payouts or increase prices to them in order that they shall remain solvent.” Since 1939 primary producers’ costs had increased 75 per cent, while their prices had advanced by about , only 30 per cent., so that the primary producers were nearly 45 per cent, behind scratch. Between 1936 and 1946 there had been a drop in butterfat production of 42,329 tons, the reason being that farming costs were too high and prices for produce too low. Farming costs should be reduced wherever possible; failing that, the farmers must demand increased prices for their produce. There were over 100,000 fewer dairy cows in New Zealand today than there were in 1936, and the reason for that was that dairying was an unattractive as well as an uneconomic occupation. The sooner the Government realised that, and adjusted the position to a basis that was , economically sound the sooner there would be increased production.

“What the farmer wants is a say in his own affairs,” said Mr Sullivan. “He does not want a socialist Government to come along and grab his produce, send it overseas and then get down on him periodically for the reward which should be passed on to him in the shapg of the return from his production. He wants his proper payout for butter, cheese and meat. He wants fair and just treatment on the home market. He does not want the Government to give a consumer subsidy out of his own account equivalent to about £1,000,000 a year, as is being done at present. The Government has no right to do that. I cannot see how the Government can ever establish a case in justification of giving the whole of the consumers a subsidy out of the primary producers’ accounts; that is a case of all benefiting at the expense of the few. Never was there

a greater injustice done to any cat of people than has been done in that regard by the Labour Governm.nt. If we are going to get more production we must treat these people fairly.”