RETURN TO PROSPERITY.

Manawatu Herald, Volume XLIV, Issue 2484, 23 September 1922, Page 4

RETURN TO PROSPERITY.

RETARDED BY TAXATION

“STAGGERING GROWTH OF LOANS.”

“The great obstacle in the way of a return to prosperity is the oppressive taxation, a reduction of which the rapid growth of Government and local bodies’ borrowing will naturally delay,” said Mr 1. Shader Weston in his presidential u'ddress at the annual meeting of the New Zealand Employers’ Federation at Wellington. “This matter has beon fully dealt with in the report of the Committee on Taxation. Local bodies and tho Government shou.d not borrow for works which are not immediately reproductive. Everything which can be done without just now should be regarded as a luxury. A country, taxed to the very limit as this country is, should concentrate its energies on reducing its necessities as far as possible. The margin in our national finance is so small that the expenditure of some millions on public works, if those works do not- at once or at an early stage provide sufficient to meet the interest upon the loan moneys invested in them, means a further burden upon tho taxpayers. . . “In this connection one rather wonders at the happy-go-lucky way in which some country districts are incurring a liability of many thousands for electrical reticulation in anticipation of the completion of the Government hydro-electric schemes. Have these districts considered before doing so whether the population of their distinct? is large enough to support such an outlay, and further whether the prices at which electric current for irower and lighting purposes can be supplied would justify the inhabitants in scrapping their present, lighting and power plants and incurring this heavy expenditure? Undoubtedly there must be fairly large borrowing owing to stoppage of national developments during the five years of war. At the same, time the growth of Government and local bodies’ loans during the last four years is staggering. EXPERIENCE A CRUEL TEACHER. “To realise it, just look at the figures in the last annual Year Book. The interest on those loans is a permanent charge in tho future. Taxpayers would be wise to scrutinise much moro carefully I ban they do now the purposes for which these loan? are expended, and to bo energetic in opposing schemes which are not. certain to bo immediately reproductive. If they did so there, would not be the present pressure on the Government from all sides to incur fresh national responsibilities and to approve of so many local bodies' loans. All far-sightod business men are unanimous that the present rate of income tax is checking enterprise, the starting of new industries and the expansion of old ones. It is a popular policy to tax heavily tho larger incomes. At ine same time such a policy can be carried too far, and if continued must inevitably react upon 'ho worker and the smaller man. Wit lion t a. steady increase in the accumulation of capital this country will not be able to develop. Tho farmer requires money to improve his land; the townsman to erect dwelling houses. These moneys can only come out of savings. Moreover, it the spectre of unemployment is to l>e banished from this country, the avenues of employment must be constantly increased. Popular fallacies die hard. Experience is, however, an effective if at times a cruel tenchor. The difficulties of this decade are compelling many to discard prejudices and to recognise facts. Confiscation of. savings destroys the prosperity of a nation and such confiscation can in the end lx> effected as surely by excessive taxation as by Ihe decree of a Bolshevist Government.