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Hokitika Guardian, 19 January 1924, Page 2

I'ltoiiAiti.v there is no greater fallacy in economic matters than the idea provalent two or three years ago that, it did not matter how heavily the ii«-h man was taxed in order to provide the State with abundant levenuo, and tor months it was almost useless to argue with those who regarded the capitalist: as “fair game" for exploitation, that taxation beyond a certain point led to limitation of industry and in-erea-'-d unemployment. r I he lack of lomvaney in tie- money market which has been noticeable throughout the Dominion dining the last lew years was partial s the most serious symptom ot tlu depression. Wo suppose, comments an exchange, that the cause of the lack of buoyancy has been the failure ot capital! to grow or its very slow growth, and wo may fairly attribute this to the heavy taxation which was imposed. 'The Government requires nmeli more revenue in these times than it- did ten years ago, and to secure it heavier taxation is imposed. The elleer has been, to limit the power of tlu individual or a company to build up capital. Tac more the Tax Department gathers the less income is there remaining for the individual or company to convert into capital, which after all is hut saved income. The deposits in the banks are looked upion by n Government which perhaps thinks that it should he able to get some oi them, forgetting that those deposits are required for financing the industries and commerce of the country. 'The result is that by heavily taxing individuals and companies the tax gatherer seriously limits the .amount of fresh cap ital coining forward for developing the country. 'That happened Ln New Zealand, and the primary producer felt the pinch.

Tin-, L’fime Minister realised dearly the effect of heavy taxation, and he was able, alter many promises, to reduce it considerably. But taxation is still heavy, and it is to be hoped that a further reduction will In* piossible next session. It may he said by some p eople that taxation cannot’ bo reduced while salaries and wages are high, but it is not upon sain I ie.s and wages alone that the revenue derived from taxation is spent-. Has the Government reached the full limits of economy in administration and expenditure of public moneys? To its credit it has effected economies aggregating a large sum, and has. through economising, reduced taxation. Can its economies he carried further without turning a large number of workers out of their position ? It is of course a matter for the I .Ministers and heads of the various De- ! paitments to decide. The people of New Zealand desire that the Dopart-mi-nt.s shall he managed efficiently and that the .State's employees shall be given good conditions and lair pay, hut the p.eople do not- favour wasteful expenditure, overstaffing, and inefficiency, and if these things exist in any of the departments- the Minister’s duty is to have them attended to and corrected. Tile Government of New Zealand has done as» well as, if nLt better than, any Government in the world to handle the difficult situation, honestly and fairly, hut industry is still being restrained by the slow growth of capital, and further reductions in taxation are required before there will lie a return of the buoyancy needed for tiade expansion and prosperity. ret its hope that the Minister of Finance will be able to give the relief next ses-

sioi; ana tnat tuere win no a great in'Tease in production and a rapid return of the prosperity for which the pcoplo of the Dominion aro waiting.