ECONOMY OR TAXATION?

Sun (Auckland), Volume III, Issue 742, 15 August 1929, Page 6

ECONOMY OR TAXATION?

PRIMAGE DUTY ASSAILED MR. MORTON CAUSES STIR Derisive cries of “Oh,” and an indignant chorus of “rubbish” greeted an accusation that the Chamber of Commerce, by its propaganda, was endeavouring to embarrass the present Government, made by Mr. F. S. Morton at a meeting of business men yesterday afternoon. It was the one discordant note that broke the harmony of a vitriolic attack on the Government over the proposed increase of the primage duty from 1 to 2 per cent. BUT the spell was broken when Mr. Morton, after being told to sit down several times, left the room as a ‘'protest against the way the Chamber of Commerce was carrying on the subject.” The meeting was arranged by the Chamber of Commerce in response to a request from members, and was largely attended. Mr. M. Stewart, vice-president of the chamber, presided. Outlining the object of the meeting, he remarked that the Government’s financial proposals included taxation of farmers under a super-tax, and increasing the primage duty. He believed the meeting would agree that the latter plan was a shock to the business people, who were expecting a reduction in taxation instead of an increase. The primage duty, he declared, had been imposed as a war measure, and should have been repealed years ago. There was a deficiency in the Dominion’s finances which had to he met, the Prime Minister had stated. “My contention is that the Government should rise to the occasion, and set out to reduce expenditure or have an economy campaign,” added Mr. Stewart, “in order to bring the expenditure with the revenue expected." He proposed the following resolution: PRACTISE ECONOMY That this meeting of business men of Auckland strongly protests against the action of the Government in the imposition of an additional primage duty, on the following grounds: (a) The country is already staggering under a heavy burden of taxation which is hindering the development of industry and thereby causing unemployment. (b) This form of taxation tends to increase the burden on the community beyond the benefits accruing in the form of increased revenue. (c) It is an additional burden or sectional tax on those industries which cannot pass it on. (d) It is apt to be looked on as unimportant because of its small rate, but it cannot be denied that if insisted on it must contribute to a rise in the cost of living and the cost of production, both of which are already too high.

(e) The primage duty was imposed as a war measure and should in response to the many requests of Chambers of Commerce for reduction in taxation have been discontinued long ago rather than now doubled. (f) In our opinion a deficit in the National Accounts should be met in the same way as a private business or individual meets a deficit, viz., by effecting the strictest economy and reducing administrative costs. I The vice-president proceeded to , state that the need for economy and • reduction of expenditure should be ] stressed to the Government. The ] Prime Minister, in announcing his Budget proposals, stated that the ad- 1 ditional primage would not be passed i on, hut the speaker held that was | hardly so, as, in many cases, schedule : prices could not be altered. In fact, he considered, in practically every case, the larger primage duty would he passed on. “It seems that the Government is collecting money too easily,’ contended Mr. Stewart, vtio pointed out that when the Administration could not balance the Budget it could be put on virtually a war tax. He claimed that, although there had been a deficit in last year’s accounts, the Government should move solely in the direction of curtailing expenditure. He concluded by pointing out that as a result of New Zealand’s favourable trade balance last year, imports would increase this year, with a resultant increase in Customs revenue. STRONG CRITICISM Trenchant criticism came from Mr. A. G. Lunn, in seconding the motion. “The United Party had promised to improve government without increased taxation, but, in my opinion, there has never been a more dismal failure,” he asserted. For the Government to come down to the innocuous increasing of primage duty from 1 to 2 per cent, was a crime, he said. Borrowing had been proceeding apace at increasing rates of interest, and the country was groaning under the burden, the taxation making it almost impossible for the primary producer to work on a profitable basis. Instead of realising the position, the Government had been going in for “an orgy of spending.” A contention that the increased primage would react adversely on the preference New Zealand extended to British Empire goods, was advanced by Mr. J. Yock. He claimed that it would double the duty on Britishmade articles, thus actually benefitting foreign manufactories. The industries must suffer because the additional 1 per cent, duty could not be passed on. "It seems that the Government h ’~ taken the line of least resistance to make up the deficiency, he declare*.,. “The increased Customs revenue during the last year shows that larger primage duty is unwarranted from a Customs’ viewpoint.” He described the suggestion that the increased primage duty was to be only a temporary measure as totally unreliable, instancing the 2d stamp for cheques and receipts. Once the 2 per cent, primage was imposed it would never be withdrawn, he added. Mr. T. C. Webster expressed the opinion that business men considered tariffs should not be touched without extensive inquiry. A commission had just adjusted the tariff, but before the ink of its report was dry, further changes were proposed. “This attempt of the Government Is one of the most puerile efforts of statesmanship this country has seen for many years,” he said. The position should have been met by the Government with rigid economy. Mr. J. A. C. Allum remarked that the meeting wanted to stress the demand for no increase of taxation, and that expenditure should be kept within revenue. It was the duty of all local bodies to keep expenditure within income, and he claimed that the Government should observe the same rule.

He pointed out that the average net profit on turnover in the average business was 5 per cent., and the increased primage duty, if not passed on. would reduce the net profit to per cent. MR. MORTON CAUSES STIR “The move by the Chamber of Commerce seems to be in keeping with the propaganda to embarrass the present Government/’ commented Mr. F. S. Morton. An indignant chorus of “rubbish” came from various parts of the hall. “We are all against the Government in power/’ continued Mr. Morton. “The Government had a very difficult job in front of it/’ he said, “and it was the duty of every Chamber of Commerce to assist.” “I don’t think you are quite in order,” remonstrated the chairman. Mr. Morton ignored the hint. “The Government has to make up the deficiency very quickly/’ he went on. “They have to balance the Budget.” he persisted amid murmuring. “It is no use us meeting her today to embarrass the Government and the Prime Minister, who is the most able financier in New Zealand.” Another chorus of Incredulous “Oh’s?” “You are out of order,” the chair- j man again told Mr. Morton, who took no heed. The chairman went to some pains to explain that the deficit had j been written off, and did not enter into this year’s accounts. That disposes of your point,” said Mr. Stewart. Mr. Morton still held the floor. At , no time had he heard the chamber j protest when the Reform Government had imposed protective Customs | duties, he asserted. “You are ruled out of order; I can : only ask you to sit down,” said the chairman once more. “You won’t allow me to reply?” ; asked Mr. Morton in an injured tone, j “Not in that strain,” replied the chairman. “The additional 1 per cent, is only small, and is only a temporary measure,” Mr. Morton persisted. The duty on sugar had been imposed similarly by the Reform Government, and there had been no outcry from the Chamber of Commerce then, he said. Mr. Allum jumped up, stating he would retire fi*om the meeting and would ask others to do likewise if the chairman did not enforce his ruling. “I ask you to sit down,” said the chairma nto Mr. Morton, who finally subsided. Mr. Lunn indignantly defended the chamber as being non-political, and as recognising no Government or party. This drew from Mr. Allum another threat to retire as a protest, and discussion in this vein was unceremoniously ended. Then followed another stir when Mr. Morton left the meeting with the comment, “as a protest against the way the chamber was carrying on the subject.” Another speaker wanted to know if the chamber had any concrete proposals to submit to the Government to enable it to meet the deficiency. Mr. T. C. Webster: Jl/et it restore the unemployment relief works’ rates to the old standard instead of attracting men off the land. The motion was finally carried unanimously.