“INIQUITOUS BILL”

Hokitika Guardian, 17 February 1933, Page 2

“INIQUITOUS BILL”

LABOUR ON SALES TAX

AIR HOLLAND CRITICISES PREMIER.

WELLINGTON, February 15

Declaring that the Sales Tux; Dill was a violation of a solemn promise by Mr Forbes that there would be 1 no further taxation imposed during the current year, the Leader of the Opposition, air H. F. Holland, voiced his antagonism to the provisions of the Bill in tlie House last night. Mr Holland contended that the tax wa s an iniquitous 1 one, in that it burdened the poor mere heavily than the rich <.nd was cumulative in its effects. He said tlie tax was paid in a way that was calculated to blind the mass of the people to the fact that they were bef.ngj taxed, ahd they were prone to regard the matter as one of higher-priced goods. It was not a new tax, said Mr Holland. It had been imposed from the earliest times, hut popular discontent had invariably prevented it from becoming permanent. A sales tax prevailed in both Germany and Russia, and it would be Interesting to know whether the Prime Minister would be prepared to tell a Tory audience why lie had followed tile lead of those two countries. AUSTRALIA MISLED. .It was not until 1930 that Australia was misled, in the same direction. The tax was introduced by Mr Scullin, who had made the same apologetic kind of speech as had the Minister of Finance when moving the second reading. The rate in Australia, was originally fixed at 2j per cent. The Labour Party in New Zealand did • not hesitate to condemn any Labour Government when it had clone? something wrong, and Mr Scullin had wrecked In's Government by acting on the advice of badly informed people. Whenever a sales tax had been introducet it was levied initially at a low rate and afterwards was increased. New Zealand had imposed a high rate from the beginning, and one would i:,ke an assurance from the Minister of Finance that this rate was not to be lifted higher in years to come., .“The rate in Australia,” said Mr Holland,, ‘byastuncreased from 2j- per ■ out to 6, per cent, and there is clanger of this history being repeated in New Zealand. Increase in the sales lax was recommended to the Australian Premiers’ Conference by that meddlesome mediocrity among economists, Professor Copland, along with certain others. It will be remembered that Professor Copland was sent here by the Rank of New South Wales to advocate the pegging up of the exchange rate.” SERVICES GO FREE, f ' Mr Holland said, the scope, of sales and turnover taxes varied greatly, St'me extended to all! ttjansacWions, both wholesale and retail, and others to wholesale transactions only, Certain taxes include both goods and servieefV while ('others ijncluded only goods. “This Rill,” he said, “provides only for the taxing of certain classes of goods. It allows services to go free. While I am not in favour of the tax being applied, I think it manifestly unfair to apply it to the sale of commodities by bxisiness people, while at the same time the servies of lawyers, doctors; insurance people, commission agents and others are exempt. There is no. doubt the tax will- be cumulative or pyramided. A general sales tax' of 5 per cent will in the end constitute far more than 5 per cent of the original selling price.

OCTOBER PROMISE. “How will Mr Forbes .explain his dishonouring of his October promise?’’ asked Mr Holland. “He stated in his Budget here would/ be no increase in taxation this' year. The Prime Minister is the first citizen in the land, and it is a serious thing when he repudiates his previous statement so lightly. Are members of the Coalition to be required to follow their leaders into the Government lobby whenever the Prime. Minister decides that the time has arrived for him to dishonour another of his public promises? This/ tax is a violation of a solemn promise made to the country by the Prime Minister. It will lift, and is lifting the cost of living to the people in the mass, and, coming hard on the heels of the. increase in the exchange rate, it is equivalent to yet another subsantial decrease in wages, which are already below the subsistence level. The Bill will relieve the wealthier members of the community against increased graduated income taxation, and it will load more grievous burdens on the shoulders of the poorer citizens of New Zealand. If it is passed into law it will stand for another milestone on the unhappy read along which New Zealand is being goaded toward insurrection.”