The Sun 42 WYNDHAM STREET AUCKLAND TUESDAY, JUNE 24, 1930 WHO SHOULD PAY THE PIPER?

Sun (Auckland), Volume IV, Issue 1006, 24 June 1930, Page 8

The Sun 42 WYNDHAM STREET AUCKLAND TUESDAY, JUNE 24, 1930 WHO SHOULD PAY THE PIPER?

A BUDGET that nobody will like is almost certain to be the worst outcome of a Parliamentary session that cannot be otherwise than poor at its best. The Legislature resumes at "Wellington this week in changed circumstances which foreshadow so undesirable a result. Following on a period of general trade depression with a fall in expoi’t prices, the State’s financial cupboard is bare. The Government, according to its new Leader, who fills the dual role of Prime Minister and Minister of Finance but has yet to “learn his lines,” is faced this financial year with a deficit of £3,000,000. Revenue has shrunk while tli e charges on the national Treasury have expanded, and there is not available money enough to feed all the clamouring children of the political Old Mother Ifubbard.

Increased taxation looms. That is the outstanding prospect and the most serious menace in the whole range of the Dominion’s mediocre politics. It is right that the taxpayers and many spendthrift people as well should know the extent of their existing’ burdens and also the additional load awaiting them round the Parliamentary corner. As things are today New Zealand is the second-highest taxed country in the world. Both the National Debt and interest bill are now higher on a population basis than those of any other country. And the carnival of public and private expenditure goes on merrily for the majority of people. Taxation will go on, too. In some other countries difficulties similar to New Zealand’s have been met in other ways, including a reduction in taxation as the firmest road to a recovery of prosperity, but such means may be secured and enjoyed only by nations who still are fortunate enough to posssess statesmen. In that respect New Zealand these days is out of fortune. The United Government, it is true, is pledged to the hilt to reduce taxation, but most of its pledges, so far, have been as the hues of the rainbow—beautiful, but not enduring. All the world over it is recognised that the shortest cut to national prosperity is by way of reducing production costs, and, as everybody knows, taxation is now one of the most important parts of such costs. The New Zealand politician has become a laggard in knowledge and constructive effort. He has learnt in an expansion of bad habits to follow the line of least resistance and thus replenish the State’s cupboard in the way nearest and easiest to his hand. So there is again talk of a bandit’s Budget and increased taxation.

If Parliament decides to call the taxation tune—a medley of more or less stupid discords—who should pay the piper? The representatives of democracy in Parliament no doubt will give their hackneyed reply to that question : “Those best able to pay should pay all.” That has been the policy of the Labour Government in Great Britain, but it has been discovered in practice that it is neither fair nor of any advantage to the nation to allow thousands of moderately •well-to-do workers to go scot-free of taxation. Here in this country the system of taxation is different, though the aim of the democrats does not differ. Rich and poor are lashed with the whip and stung by the scorpion of taxation. Customs revenue punishes them both to the extent of nearly £8,000,000 a year. The poor escape income-tax aud death duties, and many other taxes besides, but they are not treated so generously as their kind in Great Britain.

If the Hon. G. W. Forbes must confess with new political frankness that the Government cannot fulfil its pre-election pledges to reduce taxation and banish unemployment, to say nothing about the remainder of its alluring programme of political magic, in wliat direction will he go to find increased revenue for the purpose of balancing liis first Budget? Petrol or pleasure? Luxuries, including alcoholic liquor, tobacco, motor-cars, silks, cinemas, or that mute source of revenue, death duties? Some of these might be able to contribute more to the Treasury, but it must be the duty of the Government to take care that, in imposing heavier taxation on luxuries (let death be listed as a grim necessity to be deferred as long as possible), it does not increase trade depression and make confusion worse confounded. It is beyond question the Government’s duty now to look before it plunges into a deeper morass of taxation. There will be time before the new Budget has been introduced for detailed discussion of the present effect and incidence of high taxation, exemptions, and potential sources of additional revenue. .Meanwhile, “Honest George” had better walk as Agag.