The Hokitika Guradian TUESDAY. AUGUST 15th, 1922. NO TAXABLE RESERVE.

Hokitika Guardian, 15 August 1922, Page 2

The Hokitika Guradian TUESDAY. AUGUST 15th, 1922. NO TAXABLE RESERVE.

Indubitably, the most important eonelusion arrived at by the Taxation Commission, says the Christchurch Sun, is that there is practically no reserve of taxable capacity in this country. No words could define more clearly, succinctly or emphatically the financial and economic position in which the Dominion finds itself to-day. What the commission is telling Mr Massey is that the limit of taxation has been reached, and that the taxpayers arc carrying the maximum load. An emergency would leave the Government impotent to obtain large additional sums of revenue by this means, except at the risk of crippling trade and commerce, and damaging the country’s credit. New Zealand may be comparod to the average business man who has beon unable to put anything by in the shape of reserves. So long as normal conditions preva’l, all will be well. But all would assuredly not be well if the winds of circumstance suddenly grew more violent. A runner who has almost spent himself to beat an opponent is liable to collapse if he is challenged from Tinother and unexpected quarter. Of eours?. it is no news either to the Government or the Prime Minister that this community is taxed to the limit. Nevertheless the commission would have failed in its duty had it refrained from stating the case so pointedly. It must be obvious that nothing but a reduction of tnxntion will afford tlic relief essential to a return to normality. Readjustment—the transference of the bur. den from one shoulder to another— j would he a mere futility. Every section of tho public is in the same box. , At present the country’s shoet anchor is primary production. Official statis- 1 tics show that, pur exports are heavy.

But they have not increased sufficiently to give the farmers anything like the net returns that were enjoyed bofore t. e \v,,j*, Prices are lower, money is von' miicii dearer, the costs of production .uid shipping substantially enhanced. Thus. We must continue to augment our exports, and this cannot bo done while land and income tax charges are so high as to strangle development. Trade outside agrarian activities is afliicted with and embarrassed by the same blight. The Prime Minister knows iii ihis, but he would not be human and a politician if he did not. ask for siigfestions ns to where tile remedy was likely to lie found. In economies in public expenditure, says the report, and most people will agree with it. As a matter of stern fact, there is no alternative, with revenue declining on all sides and development in land and industry more or less at a standstill. Tlio Government lias used the pruning knife on the Public Service, much to the disgust of its victims, but, so far retrenchment has not been drastic. More will be necessary, possibly, unless the over, sea markets brighten notably. In ...is connection, there arc signs of an npwa"d tendency, but the position fs still far from satisfactory. It will be interesting to see how the Government treats the recommendations embodied in the report. A taxing Bill is promised by .dr Massey, who hinted at the time tb.it t lie Government’s policy would c.isregard rather than follow the commission’s suggestions. The report is too important a contribution to the controversy on an involved problem not to be given the Government’s most earnest consideration. One of our contemporaries indulges in veiled sneers at the calibre of tile investigators and professes to see little of value in Their findings. This view will be supported by few outside the ranks of Die party fanatic. The report is a significant document, which can scarcely fail to help the Government in its. difficulties, provided that political factorsthis is election year -are not allowed to intrude unduly. -