WEAK ADMINISTRATION

Hokitika Guardian, 2 October 1920, Page 4

WEAK ADMINISTRATION

-—■ —>-•••-« THE PUBLIC FINANCE

Gazette).

Wt* wonder if Mr Massey in his taxation schemes ever thinks of the effect which they will have upon the country, or to what pass he is leading us to. Sir Joseph Ward, when lie increased the income tax to 7s (id in the £, thereby annexing from all the great trading institutions 37 per cent of their earning capital, acted in a statesmanlike manner. He was forced by the necessities of a great war to raise unheard of sums of money to meet the expenses of the New Zenlnnd army in the field, and lie was compelled to obtain from the people of the Dominion just whatever amount they were capable of paying, and they responded willingly to the call made upon them. The trading class, or that portion of it which made big incomes, gave up without demur more than one-third of their total profits. When he wanted loan moneys they were freely subscribed although hundreds of the applicants had to pledge their banking credit to obtain supplies, and at the present moment are paying overdraft rates on the money borrowed. Everyone except the extreme labour crowd rallied to the Treasurer, glad to assist in the only way they could to win the war.. They were promised that the load should not be carried by them after the war, and since the last election Sir Joseph Ward has said that had he been returned to power he would immediately have cut the income tax by half. ‘ '

Mr Massey also publicly stated within the last month that he had no intention of increasing taxation, and everyone accepted that as an intimation of his inability, .to reduce, but no one dream,ed, after his official utterance to the contrary, that he intended to increase the income tax on maximum incomes from 37£ per cent to 43 per cent. For some unknown reason, special revenue, which was raised for the purpose of keeping our army of 100,000 men on the fields of France, is still required although the men are back in the Dominion, and are following their pre-war civil avocations. To the type of man whp runs the labour unions, Mr Massey’s policy in exacting 43 per cent of income from the large trading corporations, farmers'and successful men, is moving along the planes they themselves if in power would follow; every shilling dragged out of the wealthier business classes gives to them the liveliest satisfaction, but they certainly have no claim, on anything done by them during the war, to be considered. Their sympathies were never with the British, and if we are free to fly the red ensign to-day over our Parliament Buildings they never lifted a hand to assist. When Sir Joseph Ward imposed an income tax of 7s (id in the pound upon all incomes of £6,000 and over, he virtually, so far as companies are concerned, compelled the shareholders to hand over to the Treasury 37 per cent of the capital of the company, and the farmers one-third of their lands, and, although the income upon this has been paid into the Treasury, owners of the shares considered they would have the stock returned to them, or a large portion of it, as soon as the New Zealand armies had returned. Had the income tax been reduced, the business community would have been so much the wealthier, and the amount saved would have been available for prosecuting new enterprises, the shares of the companies would have been restored to their normal values, money would have been freely available for all requirements, public as well as private, and the consolidated fund would in time have taken toll upon .the savings in death duties. The tax 17as also fallen heavily upon the 'bulk of the people. It is the greatest fallacy to suppose that those upon whom any impost is levied are the payers. In most cases they are merely the tax gatherers, the collectors from the people, and, if any successful attempt is to be made to lift the country out of the financial mess it is rapidly getting into, the first thing necessary is to remit, not to increase, taxation.

Mr Massey has no doubt many demands made upon him for money, and in addition to those lie requires for Government purposes, local bodies of the Dominion have been authorised to borrow. More land is required for returned soldiers, the price of which is booming upwards by reason of the Government attempts to artificially keep the rate of interest down. Then we have substantial increases on the tapis of two really essential food items, butter and sugar. If the producers obtain a free market, and we see no just reason why they should not, butter will probably go to 3s per pound with a corresponding boom of all land capable of running cows, and, if sugar increasesi to 8d or 9d, and other food values rise' in sympathy, Mr Massey will find that his policy of heaping up taxation, and thus further increasing the cost of everything, will produce results which it is impossible to regard with equanimity.