WELLINGTON NOTES

Hokitika Guardian, 11 June 1923, Page 1

WELLINGTON NOTES

FINANCE AND TAXATION. ONE VIEW AND ANOTHER. [Special To Thu Guardian.] WELLINGTON, June 7. Iha .second exchange of interviews between Mr AL'tsscy and Sir Joseph Ward in their controversy over the financial position of the Dominion and the incidence of its taxation has left neither side with any conspicuous advantage. The Prime Minister, like the chivalrous gentleman he strives to he. has thanked Sir Joseph Ward for giving him an opportunity “to clear up some of the more or less important points connected with the finances of the country,” and Sir Joseph, not to be outdone in courtesy, has said, in effect. Hint ho is satisfied Air Massey hns misstated the facts in ignorance and not with any wilful intention to deceive. In Thursday’s papers the I’rimo Afinistor told the public that the taxpayers of England to-day were inlying “double what would he paid in New Zealand during the present financial year.” lie scoffed at Sir Joseph Ward’s suggestion that the higher graduated income tax at Home was paid by t In' plutocrats? “Who arc the

“plutocrats? Ho asked derisively. “All recognised authorities on economics have repeatedly stated that nothing interferes with the prosperity of a country so much as the imposition of heavy taxation which the people are barely able to pay.” The authorities, it is scarcely neeessarv to say, were quite correctly quoted. I’UOAfISED REDUCTIONS.

There was one passage in the Prime Minister’s statement to the p.xpors, however, which was not quite happily framed. “It became necessary for the Government in the following year,” Air M assov said., after mentioning Sir

Joseph Ward’s retirement from the position of Minister of Finance in the National Cabinet, “to put tip the income lax to Ss fid on account of the extraordinary liabilities wlit'dt , had been left for us to meet.” These words naturally would convey to the average reader that Sir Joseph was in some way to blame for the existence of these extraordinary liabilities and that Inhad left the Cabinet without making provision for them. This cannot be the idea Air .Massey wished to convey, hut his words were capable of a con-

struction that would have cast a very grave reflection upon Sir Joseph’s administration of his high office. The really important part of the Prime Minister’s statement, however, was that dealing with the reduction ol taxation. lie hoped to reduce the maximum income tax “approximately to ss” while lowering taxation in other directions, and he hinted at the removal of the tea and sugar duties. These achievements would he accepted as a reasonable instalment of the good tilings to come. ABSOLUTELY INCORRECT. In an interview with a representative of lho “Now Zealand Times,” published in that journal this morning. Sir Joseph describes the Prime Minister’s statements concerning English and New Zealand taxation as “absolutely incorrect.” “Mr .Massey previously stated,” he said, “that England paid 10s 6d in the pound income tax compared to is •11 in tlio pound now imposed for income tax purposes in New Zealand. Anyone would suppose from Mr Massey’s statement that in England it was a flat rate of Is Gd in the pound income and an additional Gs in the pound flat super tax. making 10s Gd in the pound. This statement is totally contrary to fact. In England flic income tax !- Is Gd in the £ and Hie super tax is imposed upon what it. called the zone system. This zone system enminonee.«ith Is Gd in the pound on the first £.-,9:) beyond £2.000 of taxable income. The Gs in the pound referred Li by Air Massey is on all incomes in excess of £30.090. the zone system operating on a sliding scale between £2.009 and that amount.” Sir Jo-eph’s contentions appear to he in accordance with a layman’s reading of the provisions of the English Act. but possibly Mr Massey has some authority for putting a ditferent construction on their language. COMPANY TAXA'ITON.

Don Hup with eonipnny taxation Mr plainly is on sound pround. "Another important difference between t!ic Knplish and the Xow Zealand Iris Is." lie xnvs, "that tho former is oliiofly mi individunl tax. In Xow Zonlnnd last year companies paid 7'J per cent, of tin- total tax and individuals only US per cent. Com panics in Xcw Zealand arc wide-spread and consist very largely of industrial concerns '-ln;ih.iyiin; aI a roe ninount of laliour. I lay arc payino in tliis country fully tyotliirds more than lliey would lie pnyinp under flic Knglisli system. In Knpimil the corporation tax is uoi one :,J .11 hip as stated hy Mr Alasscy. It-- is sixpence, and it lias a sliplit. lint not material effect compared with the pros? amount levied citlfer at I lome or here Tn re JXni’cl to

Mr Massey's stntei. i(■ 11 1. in connection with Hi* 1 war liabilities Sir .Joseph M aril is emphatic. “Hcforo T left tlio National (Jovornmont” lie snvs ‘‘l net only made full provision for the whole of the ttat liabilities incurred in New Zealand, but also for the total expenditure ol the Dominion..inelmliup; the loans raised in Sir .lanirs Allen’s time, and there was no liability whatever in connection with ihe wars general expenditure either tn K,inland or in New Zealand.” This is where.the controversy between the two authorities stands at present.