BURDEN OF TAXATION

Hokitika Guardian, 6 August 1928, Page 4

BURDEN OF TAXATION

RELIEF OVERDURE,

MINISTER’S OPPORTUNITY

(Taxpayer)

"During the sixteen years since the Reform Party took office the revenue has exceeded the expenditure by no less than £30,000,000, and accumulated surpluses aggregating over £26,000.000 have been'applied to debt reduction or other capital purposes, thus keeping the public debt down by that amount and involving an annual saving of approximately one million and three-quarters in the interest payments which otherwise would have been incurred.” This is a statement attributed to the Prime Minister by the newspapers' in their reports of the proceedings at the celebration of the sixteenth anniversary of the Reform Party coming into office. No doubt it is an accurate record of what Mr Contes actually said and what he intended to say. His words were warmly applauded by an audience that had reason to be well satisfied with the achievements of himself and. of Ins great predecessor in tiie leadership of the party. Whether or not the method of finance outlined by Mr Massey’s successor was the very best that could .be conceived in the circumstances, however, is a question still open to discussion. The fact that Sir Joepli Ward, while Minister of Finance in the National Ministry, provided rather more .than half of' the £30,000,000 on which Mr .Coates based his congratulations need not. be discussed at this time of day ; but it is only fair to Sir Joseph to mention "that after the conclusion of the war and his retirement from theCabinet ho stated he would not have employed the accumulated surpluses just as Mr Massey did. REVENUE AND SURPLUSES.

Be this as it may, a matter of more immediate consequence is the need for a review of the practice of maintaining high rates of taxation for the purpose of producing surpluses which may bo distributed without undergoing the scrutiny cf Parliament. No doubt successive Governments have been careful to make appropriate uses of such surpluses as have fallen into their hands, but tho position would be simplified and assured if the practice of the Mother Country of allocating its superfluous revenue to the reduction of its public debt were adopted here. It at least would save Ministers of Finance from the temptation to underestimate their revenue in order to justify their demands for other assistance to the Treasury. In war time, of course, and for several succeeding years, it was necessary for the Government to make provision for the requirements of tho Dominion well ahead. The thirty millions mentioned by Mr Coates were among the fruits of that policy. STULL CRIPPLING INDUSTRY. The great need of to-day, however, is a reduction of taxation that would rol ieve both Capital and Labour of a further portion of tho incubus thrust upon them by the war. In this respect tho interests of the two sections of tho community do not conflict in any regard. Tliis fact was plainly demonstrated during" the world’s great upheaval. Capital was taxed by the State up to practically one-half of its earnings and was driven by its own necessities to pass on part of its burden to Labour, the ultimate bearer of higher prices and increased charges. 11l a modified measure similar conditions prevail to-day. The maximum income tax now' stands at 4s Cd in the pound, ah advance of 237 per cent upon the maximum rate before the commencement of hostilities between the nations, and to that extent still hampers the enterprise and development that make for the welfare of both Capital and Labour. It is for the Minister of Finance to see that some in nterial i ninrovenient in the existing conditions is made during the present session of Parliament.