WELLINGTON NOTES

Hokitika Guardian, 12 May 1923, Page 1

WELLINGTON NOTES

[Sri-xi.u, To The Gu.wuhan.] INCIDENCE OF TAXATION. MR W. D. 11FXT REPLIES TO PRIME .MINISTER. WELLINGTON, May 7. In tho course of an interview published in the “Dominion’’ this morning Mr \V. D. Hunt deals trenchantly with the Prime Minister’s criticism of his address to the Executive of the Fanners’ Union. “I am sorry,” lie says, “that Mr Massey should have implied that my de-ire was to holster up the strong combines with large capital at their command and to shut out the individual trader completely, so in the end exploiting both the producer and the consumer. Talk of this kind, it seems to me, is akin to that of the rabid Socialist, which we all are so ready to condemn and it will not help us in any way towards the solution of the problems we are discussing. Taxation is essentially a national question, which ought to stand altogether apart from (lass and sectional wrangles -and lie settled on Hie high principle expressed in the phrase ‘equality of sacrifice.’ Tho difference-, between Mr Massey and myself are not party differences; indeed we both Incline towards the same side of polities and I should he sorry to embarrass in any way the head of the Government, who has done very excellent work for the country during his long term of office.” This assurance of political goodwill gave point and force to what followed. A QUESTION OF FIGURES.

The Prime Minister had twitted Mr Hunt with misstating the amount ol income tax paid bv companies. “Mr AI assay." Air Hunt now retorts, “declares that 1 was guilty of exaggeration in stating to the Executive of the Farmers’ Union that the company taxation collected last year was in the neighbourhood of C 0,000,000. Jle says the actual amount was only £2,250.000. I was speaking in round figures and entirely from nicmury when addressing the members of the Executive, and of necessity referred to the latest figures available lo the public. 1 have since looked up the official returns and find that the total amount of income tax raised during the year, 1021-22, was Co.2Gii.fw 7, and that of this amount

C1,.->]ysiil, or 72 per cent of the total, was (ollecled from companies. These , are tho latest published figures and the only ones available to ordinary mortals like myself. -Doubtless Mr M assoy litr. I access to the figures for the financial year 11)22-23 and 1 take his word for - it that the income tax collected during the twelve months ended March ;tl last was only £2,250,000. But. he I surely cannot have expected mo to quote figures I had not had an opportunity to see.” This, of course, is reminiscent of the Tauranga election when the Prime Minister scored heavily against Sir Joseph Word with a similar accusation. STICKS TO HIS GUNS. But Mr Hunt is not- to be put oil' by the production of the new figures. “In any ease,” lie goes un in say, "the nmount collected from companies during the year ended March 31, 192.2, is not it fair indication of the true position. The year oil which the tax was assessed was an abnormal one. being the year of the slump, and ttip figures go to -how how much the com panics suffered from that unfortunate visitation. They certainly do not show the ability of the companies in bear their present burden of taxation.” Mr Hunt (lien proceeds to demonstrate in plain figures that while companies with I assessable incomes amounting 1o £12,722,805 paid in tax in 1921-22 £4,515,501, individuals with incomes amounting to £25,023,81) I paid only C1,751.1it!. The average tax on each pound of income In the ease of companies was 7s Id and in the case of individuals Is -Id. This friend of the Government sums up its taxation policy in a few terse words. "The fact is,” lie insists, “that Mr Massey’s system of taxation results in the taxation of the poor and the relief of

the rich.” This is the harden of the whole of Mr Hunt's iiidietinei.it and it is presented witli striking force and precision. KCO.YO.M fine more extract from this lemnikahle interview must suflice. “1 notice,'' .Mr Hunt says, ‘‘that .Mr .Massey thinks that an increase in public expenditure, apart from interest and sinking fund and war pensions, from ci t,:j«r,fioo in mis-in u. cik.uoo.ooo in is rca.somdile. To put his view in other words, it is reasonable in the first three years of pence that v.e should allow our public expenditure in increase l.v LT.fl!!0,0!l0 a year, o: over (it) per tent, quite apart from Ihe huge inerease in interest and sinking fund and war pensions, which we must carry as the result of the war. ,\|! this increase has ultimately to ho paid for in our farm products in wool, meat, and dairy produce. My opinion mar cot count for milch, hut I know a great many people share with me the view that Ihe increase is quit e unreasonable. and believe that if a committee of business men were given an opportunity they louh! show ways or cutting down ihis huge stun very materially without impairing the efficiency of tlie Civil Service or inflicting any injustice upon its employees.” The Prime Minister’s reply will he awaited with interest.

INCIDENCE OF TAXATION'. PROPOSED COMMITTED. WELLINGTON. May 9. In business circles here there is a disposition to scoff at the suggestion o' the “.Voir Zealand Times” that a sole -t Parliamentary Committee should lie so up to consider the incidence of taxation and report to the House of Representatives early next session. In the city there is less confidence in members of Parliament as financiers than there is in any other role they may assume. Wellington sees too much of them to he under any delusion as to their average capacity in this respect. The House never lias been rich in capable business men and to-day it appears to bo poorer than ever. With the exception of Mr Massey and Mr Dowtiie Stewart on the Government side and Ah- Sidev and Mr Hunan on the Opposition side there is not a member with more than

a. plausible pretence to an understanding of tlie finances of the country. The Secretary to the Treasury and the Commissioner of Taxes are really the only men thoroughly informed in regard to this branch of the country's business and their purpose is rather to find the revenue required than to insure an equitable distribution of tlie burden M taxation. In these circumstances the members of the Parliamentary Committee could only subscribe to the views of their respective party lenders. BUSINESS BRAINS.

But there is a feeling abroad that better results might be obtained if a small committee of business men were constituted to advise the Government in regard to the incidence of taxation. Mr Massey already is pledged to a substantial reduction in taxation and it is

icing assumed gcnerallv that much the larger portion of this will come off the income tux. At present this tax, on the face of the figures for 1921-22. tho latest available, seems to be unevenIv distributed. Of the total of £0,200,077 assessed for that year £4,515,56] was contributed hv companies, £221 ’- SBO by land owners, £592,585 by traders and manufaturers, £214,115 by salaried persons, £251.085 bv professional persons, £125,322 by' deceased persons’ estates and other trusts, £301,105 by miscellaneous investments and £44.415 from non-resident traders. It i> contended that the companies, which* pay at an average rate of 7s 4d in the pound, while other taxpayers pay at an average rate of Is 4tl in the pound, are necessarily passing their huge tax on to the public and if only to settle this question an inquiry by experts appears desirable. The farmers, it i IS said, arc particular sufferers from the “Passingon” process. DRASTIC ECONOMY. While discussing the incidence of taxation and the urgent need for a large reduction in its volume, business men do not forget to recognise tlic efforts made by Mr Massey to lessen the administrative expenditure of the country. They do not go so far as to admit that the two millions the Prime Minister claims to have “saved” during the financial year ended March 31st will he actually brought to account, hut they give him credit for having shown a hold front to the Civil Service when it threatened all sorts of retaliation in return for the (locking of part of its bonuses, and for having put an end to a number of superfluous services that had grown up during tho spacious days of the war. They want to see further efforts in this direction, however, and they will not be fully satisfied till they see the administrative expenditure reduced by a round four millions and the public works expenditure largely curtailed and no longer subject to the raids of importunate electors and their repre-

sentatives in Parliament. This last problem may prove the more difficult of the two, mainly because “a fair* distribution of the public works votes” has been a slogan among the politicians for more than half a century. THE ADROIT MINISTER.

It. is more than a little curious—as a coincidence and as a commentary upon polities that yesterday while a body of business men in AYelliiigton was discussing tho need for the utmost economy in public extienilure a deputation was waiting upon the Hon J. C. Contes with a request for the speedy completion of the Rimulnka railway deviation. Air Coates was faced by members of Parliament, representative of both >,ides of politics, and by a number of persons directly interested in tbe work -. but lie managed very adroitly to get rid of them without committing the Government or himself lo anything. He said that- surveys had been made and reports prepared which he had not seen. These reports would show the cost, of the various routes, lie thought it would be as well for him to have the figures ill his po-s ssien before tie said anything definite. lie bad an idea which route would he favoured, though lie had not seen the actual figures. lie knew approximately what the co<ds were, but lie would like to have the whole thing in order before issuing any statement. It is tolerably safe to sav there will he no great expenditure upon the deviation just yet,