EFFECT OF BUDGET

Sun (Auckland), Volume III, Issue 731, 2 August 1929, Page 11

EFFECT OF BUDGET

AUCKLAND COMMENT ON TAX PROPOSALS “NO IDEAL SOLUTION” “There is no ideal solution of the taxation problem. The Government has to find revenue. It could reduce its expenditure, but this would be difficult to do at a time of unemployment. The course taken by the prime Minister appears to be the most satisfactory one. It is a case of •plucking the goose with the least squeaking’ —people do not notice this form Of taxation so much. Thus Dr. E. P. Neale, secretary of the Auckland Chamber of Commerce, commented on the budget proposal to increase taxation revenue by an allround addition to the primage duty. In a statement made to The Sun today he added that one disadvantage of this system was that a sliding scale could not be instituted with the result that the tax bore more heavily on the poor than on the rich. It hit the manufacturer who used imported raw materials and had the effect of giving him less protection, although the effect from the point of view of the majority of New Zea’and manufacturers was to give an increased measure of protection. The principal people concerned were the importers, especially those in competition with New Zealand manufacturers. He thought that in the case of importers the tax would be passed on. This was only right as oiherwise tho tax would become a class tax on importing houses. Doubtless. however, in some instances, it would be met by price reduction on the part of overseas manufacturers. • In regard to the land-tax increases I think the bulk of commercial opinion will have no fault to find,” he remarked. “There has been a feeling that the bigger land owners were getting oft more lightly than they should.’ t’. DUTY WILL PASS ON MOTOR DEALERS’ VIEWS "In view of what we were told prior to the election, this certainly comes as a very unpleasant surprise,” said a well-known motor trader, and one closely connected with the Motor Traders’ Association. “One unfortunate result,” he said, “is that English cars are penalised to a greater extent than American.” T.TE explained that this arose from the fact that duty was based on the retail value of a car in the country of production, aud as the retail value in America was much lower than in England, the extra primage duty on English cars would mean more than it would to the American models. Whether the extra duty would be passed on to the public would be largely a matter of competition, he said. In his opinion, despite Sir Joseph’s assurance to the contrary, he thought it would be. It would no doubt be difficult to pass it on when dealing with small-priced articles, but he thought it would be just as easy to get £290 for a car as £285. Sir Joseph also indicated that the increase would not be permanent. He thought that that also should be taken with a grain of salt.- Everyone knew that once duty went on it stayed on. It did not matter what Government was in power, no administrator liked to give away duty. HARD TO PASS ON DRAPER’S VIEW ON PRIMAGE INCREASE ''la our line of business, it will be very difficult to pass this 1 per cent, increase in primage duty on to the public," said the manager oi ! one of Auckland’s leading drapery stores. “I am afraid that we must regard it as another form of squeezing income tax out of us." There were some lines handled on ’'vhich he thought the duty might be passed on, but on the majority he thought it would be impossible. The increase would have to reflect on departmental profits to some considerable extent. Even although in many instances the increase could not be passed on, he thought it would react on the consl|nJer to some extent. For instance, with the keen competition that existed, retailers were constantly striving by he employment of efficiency methods 0 r^ uce their overhead expenses, and by good buying and trading methods thus effect price reductions, out while the primage increase re- * ained it must for a while counteract nf* J -u reductions that otherwise ave been made possible, toe drapery traders generally, '„ 8 ®ust prove a very unpleasant surprise," he added.