HIGHER TAXES

Hokitika Guardian, 29 May 1931, Page 2

HIGHER TAXES

MEETING A BUDGET DEFICIT INCREASES IN,CUSTOMS. GOVERNMENT’S ECONOMY PROPOSALS, WILL STAND OF FALL BY » POLICY’. WELLINGTON, May 27, In the approonhing session of Parliament the Prime Minister will submit proposals to raise . over £2,000,000 by means of addit onal taxation in order to balance the Budget. Jt is likely that a further increase will bo made in income tax. Legislat on dealing with transport earthquake-proof buildings and banking will also be discussed. Tlie Government has decided that the normal session of this year is to open on the usual day, the last Thursday in June, which is the 25th of the month. This decision is no doubt due to the undue length of the emergency session, causing the Prime Mirrster to abandon his former intention of bringing members together earlier than usual.

A CRUCIAL SESSION. Following on the unsuccessful fusion offer, the retrenchment operations ?n the public service, and the Hauraki byelection contest, the coming session gives promise of special interest. The first matter of importance is the prob able attitude of the official Reform Opposition towards the remainder of the Prime Ministers policy of avoiding a huge deficit at the end of this financial year, Despite falling' revenue, he hopes, by means of departmental economies salary cuts and reductions in grants to come within £2,h80,000 of bridging the gap. and the final test of Parliament’s determination to back the Government in its difficult programme is to be its attitude towards the raising of over two millions sterling by means r-f aclcliti'onal txation. Income taxation was increased last session by 10 per cent, and it is anticiated that income-tax payers will have to nerve themselves for a further sacrifice, as, in face of falling incomes—reflected very strikingly in the balance-sheets of public companies this year—a higher rate of taxation will he needed, if only to maintain former receipts from this source. FACING ITS FACTS. On the reception of the Budget and taxation measure the Government’s fate will be decided. The Prime Minister has very definitely, declared his intention of requiring the full financial programme to be put through, otherwise lie will decline to take further responsibility for the country's position. Labour members towards the end of last session abandoned completely their assumption that the Government they criticised was preferable to that of Reform. They sought every means of displacing United, from the Treasury bonces, but United, with the aid of Reform, put through two-thirds of tbo programme of self-sacrifice demanded

of the community, involving public service salary reductions and the extended power of the Arbitration Court to make general orders bringing wages into line with difficult economic condition in our industries. i TAXPAYERS’ TURN. Now the taxpayer’s turn has come and it is hard to believe that the Labour Party will let him off. Direct txation increases it would undoubtedly support, but the crux of the problem arises from the self-evident fact that direct taxes will not stand the whore burden of the required £2,180,000. Therefore some Customs duty increases must he submitted to Parliament, and these would lie strongly opposed by the Labour members as tending to raise the cost of living. The result of the taxation programme on the Government’s life cannot he predicted because so much depends on factors at present unresolved. Contrary to popular expectations the crucial tost of the session over finance w'll not he the first item of the programme, as the necessities of postaudit of public accounts impose delays in presenting the final credited statements. Therefore the Government will proba.blv submit other legislative items before the introduction of the Financial Statement.

A TRANSPORT BILL. 1 he appointment of directors to control tlie railways m regarded as part of a larger plan for the reorganisation of transport in the Dominion. Requests ior regulation in the general interest are strongly backed by road; transport interests and it is understood that tlie Government is now in a position to submit legislation for tlie economic conduct of all phases of land transport. The op nion of the new railway directors regarding the corelation of railway with road transport will have an important bearing on this question. MORE EARTHQUAKE. LEGISLATION. The report of tlie expert committee appointed to consider building regulations in relat-on to earthquake risks will he available before the session and the Government’s intention is to introduce legislation making it compulsory throughout the Dominion to include in build ngs by-laws, constructional precautions against earthquake shocks, and specifying the nature of materials to be used in -buildings of the future. It is hoped that by unification of pract ee and standardisation of regulations on tins subject, the cost of building earthquake-proof structures wil not be unduly increased. NiEMEYER REPORT TO BE TABLED. Banking legislation lias been ok - cussed already, no information which seems to have been based, not cn the report of Sir Otto N’cmcycr so much as the discussions swhicli took place with bankers during his visit to New Zealand. As a matter of fact, banking legislation lias not been prepared, though the subject has been given a good deal of attention in official circles The Government intends to present the report of Sir Otto Niemeyor to Parliament, and give ample time for discus-

siou, not only by members of tm* House, but by banking and finanoia! interests. Then tbe proposed legislatoion w 11 be finally dratted for submission at tbe present session. Another interesting measure which should first make it appearance in the Legislative Council is a long-waited amendment by the Companies Act. r jhe subject has been considered for quite a year by a representative committee of accountancy, bus'ness and legal interests organised by the AttorneyGeneral ('Sir Thomas Sidey), and it is hoped during the coming session to bring this class of legislation into line with modern condition*.