NATIONAL POOL OF WEALTH

Dominion, Volume 32, Issue 156, 28 March 1939, Page 10

NATIONAL POOL OF WEALTH

Question Of Division

CHAMBERS OF COMMERCE REPLY TO MINISTER “The Minister of Finance questions our published conclusions as to how the national pool is divided between wages and salaries, government and capital.” says the Associated Chambers of Commerce of New Zealand, in a statement issued yesterday. "The Minister does not. of course, question the accuracy of I lie figures concerning the value of production, which we used as a basis, because these figures are produced by the Government-Statistician. Mr. Nash elects to use instead the official figures of aggregate private income, and on this basis he reaches some conclusions of bis own. but we cannot agree with those conclusions when arrived at on such a basis.

“We were dealing with national production, and how it was divided. Figures of aggregate private income are not figures of production ; they are. as the Government Statistician himself says, the sum total of the incomes of all the individuals of the population, plus the undistributed portion (inclusive of State taxation) of company profits. Contained in the total are wages and salaries, and. indeed, monetary payments from ali sources, including pensions and superannuation. The total of all such payments does not express the wealth produced by a country at any given period. State Pensions. “State pensions, for instance, as well as the wages and salaries of large numbers of. Government employees, sustenance moneys, and so on, are paid out of the taxation of other incomes. Aggregate private income, as given by the Government Statistician and by the Minister, considers incomes before, and not after, taxes are paid, but includes incomes that have already come out of the taxation of other incomes. Therefore, to total private income is not to total original wealth, because of the double counting involved in rhe former. If a man possesses a horse and a cart, he does not count them, then put tlie cart before the horse, count it again, and arrive at the conclusion that he possesses one horse and two carls. “We do not question in any way tlie accuracy of the Government Statistician's figures of aggregate private income, but they were never meant to be used —and cannot lie used — in tire way the Minister has tried to use them, as expressing the national pool of original wealth. “The Minister does not mention Stale or local body taxation at all, or attempt to offset. our presentation of it as a percentage of the value of national production. It is because his aggregate private income figure is wrongly employed by him to start with, that lie cannot proceed to this point. Through aggregate private income including, as we have already stilted, incomes created by the taxation of other incomes, llie Minister, of course, finds it impossible to express total taxation as a percentage of that aggregate.”