NEW ZEALAND TAXATION.

Putaruru Press, Volume VI, Issue 252, 30 August 1928, Page 5

NEW ZEALAND TAXATION.

A STRIKING COMPARISON. Nearly Highest in the World. Matamata Man’s Comments. In another article it is reported that Mr. J. Pohlen, of Matamata, who lately returned from a tour abroad, commented that it seemed to him as though the people of Great Britain were mainly in a flourishing condition, despite the high taxation. And in regard to the subject of taxation he had taken the following clipping from one of the London dailies:— “BRITAIN LEADING! “ Poor John Citizen.

“ Mr. Churchill, in to-day’s Parliamentary papers, gives the following details of taxation per head in various countries:—

“ The figures for South Africa are calculated on the basis of the population of European origin.” From the above it will be" noted that New Zealand stands second only to Great Britain, and a very good second at that.

Mr. Pohlen makes the pertinent comment that an old and wealthy country like Great Britain can better stand high taxation than can a new country like New Zealand. There is, however, the point that a good proportion of Great Britain’s population is industrial and wage-earning, whereas in New Zealand the small farmers and businessmen predominate. Nevertheless, it certainly looks as though the Hon. Downie Stewart has gone “ all out ” in the gentle art of squeezing the shekels out of the taxpayers. In conjunction with the above the following extracts from the Canterbury Chamber of Commerce Bulletin, “ Recent Economic Changes,” prepared by the Economics Department of Canterbury College, may be of interest:—

The increases in expenditure which have swollen budgets are due to a variety of causes. In some cases economy is possible, in others it is not. War debt and war pensions entail heavy fixed charges which are not immediately reducible. Expenditure on social services has been in-

creased almost universally and it is generally agreed that restrictions of such services would be undesirable. But there has also been extension of State trading, and though many countries show some net revenue from public monopolies all but three (Britain, Germany and Sweden) out of twenty-five listed in the report quoted shows “ deficits on public un-

dertakings ” during the years 19231927. In many respects, too, public administration may be regarded as the most sheltered of all industries, and though the war swelled the administrative staffs and brought slackness, inefficiency and waste in many cases, there is evidence that costs of administration have not yet been reduced to the levels which the necessity for economy would demand. It is generally admitted now that the heavy burdens of taxation are seriously retarding industrial recovery, and it is being realised that heavy taxation restricts enterprise,

lessens production and lowers the level of prosperity. Hence public economy and the reduction of taxation burdens is a general and n—-rt need, essential to the recovery of normal economic functioning and improving standards of life. There are parts of Government expenditure where reduction is impracticable, as in the fixed charges on unproductive debt, and it is in most cases undesirable that existing social services should be restricted. But there appears in all countries much room for economy and saving in administration, and for eliminating wastes and losses in public trading. There are useful precedents, well worthy of investigation by New Zealand, for giving to State trading concerns exactly the same treatment a? to ordinary companies, and subjecting them to j the same necessity to pay rates, I taxes, etc., and to provide out of business earnings their full expenses of maintenance and expansion. In

this connection, the Economic Conference Report states: — “ A noteworthy feature in public finance is the tendency to establish railways and other public undertakings on an autonomous basis; that is, as concerns more or less independent of the general political administration; it has been found that, by reorganisation of this kind, the spirit of economy and efficiency has been strengthened and budgetary results have improved correspondingly. The League’s reconstruction schemes in Austria and Hungary contained plans for effecting reform of the public undertakings on similar lines and votes in the Budgets of those countries to cover deficits on their undertakings have now almost disappeared”’ The importance of public economy is a lesson which has been learned very thoroughly in parts of Europe, where the need has been greatest. The events of the war and since have demonstrated abundantly the truth of the maxim that sound finance is the basis of sound government, and thht sound finance must begin with effective control and economy of expenditure. But they have proved even more abundantly the truth of another more fundamental maxim, that " variations in the standard'of value breed every conceivable ill.” Since such variations have been brought about .in every case by unsound public finance, they have shown how necessary it is that fiscal control and currency control should be kept quite separate and distinct. Adherence to perfectly sound methods, however desirable, is seldom attained in public finance, but adherence to sound methods is absolutely essential in currency and credit control, and this control should, therefore, be exercised quite independently of political considerations. It is well to remember this and all that it implies.

1913 or 1925 or 1913-1914 1925-1926 £. s. d. £. s. d. United Kingdom 3 11 4 15 2 8 France 3 7 0 8 5 10 Germany .. 1 10 8 5 6 5 Italy .. .. 2 2 8 3 8 9 UJ3.A. .. 1 7 11 6 1 11 Canada 3 8 3 6 19 4 Australia 3 8 1 9 1 6 New Zealand . . 6 3 0 14 0 9 South Africa 6 15 4 11 17 2