BUDGET AND PRICES

Evening Star, Issue 22441, 11 September 1936, Page 13

BUDGET AND PRICES

EFFECT ON DRAPERY TAXATION PASSED ON WARNING TO PUBLIC “ While no objection can be made to the initial Budget of the new Labour Government on account of radical or revolutionary, changes in, the methods of raising .revenue for, the State, to function,” remarks the trade organ, of the New Zealand Drapery, Clothing, and Shoe Retailers’ Federation, “it is disappointing in so far as its tendency will be to increase instead of % reduce the burden of indirect taxation, most of which is collected by our retailers from consumers.. and, in the final analysis, it is seen that our shopkeepers are the principal collectors of revenue from taxation.” It is clear to retailers that the early legislation of the Government- in the direction of raising wages and reducing working hours all round “ must mean rising prices in the cost of consumers’ goods, and these increases might have been checked to a large extent if they had been accompanied by a reduction in such taxes as the sales tax and income tax on companies and corporations, together with lower tariffs on goods we cannot manufacture here, and a reduction of -the exchange rate on London. SOARING PRICES. “ The criticism of the Labour politicians in Opposition, and the policy set out by their leaders at the last election, led us to hope that the reductions referred to would have been introduced, in some measure, during the present session, and that the welcome increased spending power, provided for the mass of the people, would not he offset by soaring prices. “We can, of course, appreciate the difficulty the Government finds in raising money needed to meet the increased cost of our social services and State Departments, and also their reluctance to revolutionise the incidence of taxation without a thorough and cautious survey of the sources and extent of hew means of taxation, but a start in the reduction of the sales tax at an early date_ would have been welcomed. It was introduced to recoup the extra cost of the State meeting its sterling due in London through the rise in the exchange rate, but' the amount to be raised by sales tax now is double that needed for its purpose, and its maintenance at the present rate is unwarranted unless it is now accepted as a fixed tax on most good* going into consumption.” LOWER VALUE OF MONEY. The journal points put that : the heavy increase in. the graduated income tax on companies must be largely met by an increased cost of goods and services to the. consumer. The same passing-on process, it is added, will apply to the sharp rise in laud tax on town premises on valuable sites, and a more direct tax on. individual incomes instead of on trading and manufacturing concerns would have meant cheaper commodities for the community. The journal concludes: “The new Budget makes New Zealand the most highly-taxed people in the British Empire, if not in the world, and while the Government insists on bur shopkeepers collecting most of its indirect revenue from the goods the public consume, our retailers carry on the’unpalatable task of acting as tax collectors, and the people must not complain, if their money does not go as far as it might if different methods of revenue raising prevailed.”