BUDGET COMMENT

Hokitika Guardian, 29 July 1930, Page 2

BUDGET COMMENT

VARIOUS FEATURES CRITICISED. Christchurch “Times.” Mr Forbes’s first budget has met with a mixed reception in the city. The ten per cent increase in the income tax, while not welcomed, is regarded as a fair imposition in view of the difficulties facing the Minister of Finance this year, but various other avenues which Mr Forbes lias explored in his determination to secure new revenue are not viewed favourably. ! The general opinion in the city is that increased taxation was necessary, but business men consider that much more could have been done in effecting economies in Departmental expenditure. Some of those whose opinions were sought yesterday said that it ap-| I peared to them that Mr Forbes was budgeting for a larger surplus than he ( had indicated, and that some of the increases that had been made might' have been avoided. | Mr A. F. Wright, a member of the Canterbury Chamber of Commerce, said that it was very gratifying to find that there had been a serious effort made to reduce the cost of carrying on the business of the country, but in Ilia opinion the economies effected had not been nearly as great as he would like to see. He hoped that they were only , the beginning of 'further reductions to ' come. | “The economic salvation of this country,” said Mr Wright, “lies more m th e i direction of reducing the cost of Government, which of late years has got completely out of hand, than in meeting that cost by imposing burdens upon the taxpayers which in the j present condition of the country they cannot very well bear, at least without crippling the very industries that provide the means of taxation.” “A HALF-HEARTED ATTEMPT.” “There has been too much new taxation and not enough cutting down of overhead expenses by the Government,” said a leading sharebroker. “In business firms, expenses are cut down when income is reduced, and, although there has been a half-hearted attempt by the Government to cut down expenditure, an analysis of the figures shows that it has not been a great success. “Tile Government,” he added, “appears to have taken the line of least resistance. Taxation is easy to impose when more revenue is needed.” With regard to the income tax, the ! sharebroker said that he was quite satisfied that the revenue from this source would be lower than last year in spite of the increase of 10 per cent, in the rate. It was recognised throughout New Zealand that traders had not had a good year, and to-day the taxable incomes were lower than they had been in the past. Under such circumstances he thought that there was more need for giving traders a helping hand than for imposing fresh burdens upon

them. “When one’s income is down it is hard to have to pay more in taxes,” he remarked. “To quote a simple illustration : It is like the ease of a man living in a house belonging to his employer, and having his- wages reduced 10s a week and his rent increased by 15s a week. That may lie a crude illustration but it emphasises the point I v"'» , t to make. “The Budget will hurt everyone to some extent, hut I consider that less injury would have been done if there had been a great increase in the beer and excise duties. Brewery shares have gone up in value since the new tariff was announced a few days ago, a-s there was a general exceptation that a heavier duty would be imposed.” “MERCHANTS BADLY HIT.” The manager of a large warehouse said that merchants would be badly bit 1 by the increases in taxation, as their

overhead expenses would go up considerably. “The income tax has not only been increased by 10 per cent,” he added, ■•but some of the deductions previously allowed have been omitted, In the past we have been allowed a o per cent, deduction on the capital value of property, but that has now been altered ..o o per cent on the unimproved value. It will be readily seen that this will make a big difference to a number of linns. In my opinion it is similar to the surtax in the case of the Customs duties.” The merchant said lie recognised that there was a need 'for increasing the revenue, hut he felt that the Minister of Finance could have treated the business community less harshly. He considered that the totalisator tax, for instance, could be substantially increased without hurting the clubs or anyone else. LEGAL OPINION. DEATH AND STAMP DUTIES. That the Public Trust Office should as indicated in the Budget proposals, be placed on the snme level as legal firms, is the contention of Mr R. Tvvytieham, a well-known solicitor, of Christchurch. He stated yesterday that there was no theoretical or moral reason why it should not he so, as that State Department administered moneys of private individuals and not of the State itself. Referring to proposed alterations under the Stamp Duties Act, Mr Twvneham said that he did not think that the increase of 10 per cent, in the stamp duty on all instruments presented for stamping would be a serious hardship. The present rate of ad valorem duty on coneyances, ifrom which the Government derived a very substantial part of its revenue, would be increased by only 2s in the £. The present rate was £1 in £IOO. Generally speaking, however, the conveyancing duty was too high, and inflicted a considerable hardship on those persons who were buying properties on small deposits. The trend should have been towards a decrease rather than an increase. “One cannot quarrel with the alteration in death duties when one compares them with the duties existing in England,” said Mr Twyneliam. “The proposal is to put an extra 10 per cent, on to estates valued at over £IOO,OOO, on which the present duty is 20 ppr cent. Then there is the increase of 2s 6d in the flat rate of duty on registration of mortgages and their discharges. This extra charge cannot be cavilled at. During the war, period the charge was 5s per £IOO on money lent on mortgage. It was a war measure, and was afterwards deleted in favour of a flat rate of 2s 6d on each document. The extra half-crown will not inflict any hardship on the individual, and in the aggregate the tax will be very useful to the country.”