LOWER TAXES

Hokitika Guardian, 19 September 1933, Page 8

LOWER TAXES

WOULD HELP RECOVERY. WELLINGTON, September 14. A reduction in taxation as a means of assisting national recovery in New Zealand is a device so sound that there is still hope of its being adequately dealt with by the Minister of Finance in liis Budgetary statement when Parliament meets. The far-reaching effects that would attend such a step would amply compensate for the tardiness of the Government in the matter to elate.

Jt goes without saying that the reason why taxation in New Zealand is so heavy is because of the high costs of Government. The people can no longer afford to buy all the existing Government services. It is a wry truism that once a tax is imposed by a Government it becomes almost im-

movable—and the more indirect the tax the greater its tenacity. This is largely due to the fact that, crowding in behind the taxes and buttressing them to the last chink, is the body of services which the State maintains at the cost of thp (taxpayers. Only fov relieving that pressure from behind can taxation be eased.

“SAVE THE SERVICES.”

One of the difficulties facing the Government in its work ,of economy, . therefore, is the natural resistance <-i established' State services. Thi s does • noti inean that Government (departi mints' have not leat loyal aid in-effect- ■ ( ing administrative economies i° their I respective branches, but the sum of savings made is of small account alongside the task that needs to he undertaken. A policy of “save—hut save the services” is not sufficient for the needs of the situation. There is an economy point beyond which State j departments are not likely to go, since j their own existence becomes involved. It is then the work of the Government I to deal with the curtailment or eliminlation of departments which the coun- ' try can no longer afford. There is little evidence that the work of economy has been carried beyond the point at which State departments stop, and it cannot be sakl that the limit m economy has been reached.

| At the time the sales tax was introduced, it was-plainly stated on behalf ■• of the commercial community that the ■ tax could be justified only by eebninies in State' expenditure to an extent that would relieve the total tax burden. No such relief has been given. If. is still possible to give a I much-needed fillip to trade by making Government economies equivalent to, say, the egtiniated yield of the sale,, j tax, and therf ‘removing the tax. Tt !is axiomatic that wealth is capable of "far more profitable employment by private hands than when it is poured l on the relatively barren soil of the ■ State, which gives in return manv services which ai’o unproductive; A fact too little' appreciated is that private trade, industry find commerce, and not the State, is the economic employer, and that the restoration of balance libs in the cont motion of State activity in order to permit the expansion of private enterprise.