The Taihape Daily Times AND WAIMARINO ADVOCATE WEDNESDAY, OCTOBER 16, 1918. TAXATION AND PRODUCTION.

Taihape Daily Times, 16 October 1918, Page 4

The Taihape Daily Times AND WAIMARINO ADVOCATE

WEDNESDAY, OCTOBER 16, 1918. TAXATION AND PRODUCTION.

(With which is Incorporated The T ai hape Post and Watesrho News).

To those who do not support Ms party in politics, as well as to those who do, Sir Joseph Ward is always interesting when discussing this country’s finance. It is Quite in the order of things that one of the first subjects he was interrogated upon after his return from Europe should be finance. To an interviewer his first frank statement was, ’‘it is certain that this country will require to raise another large loan for war purposes during this year.” The amount needed he could not indicate until he had made closer investigation. As it is upon finance, or the nature of the management of the public business that entails public comfort or public deprivation and suffering, no citizen should avoid taking persistent interest in that subject. It is obvious to all, and Sir Joseph Ward has again , impressed it upon us, that there is to be a very large increase in taxation; and it may be remarked that for consolidation fund purposes the taxation burden has been increasing to an unprecedented extent since war was declared. Prior to 1916 the annual increase of revenue was quite normal, creeping up year by year in accordance with national progress, hut figures for 1916 showed that something unusual had happened, that over two millions more had been collected than in the previous year. In the following year taxation had brought in over six millions more’fhan vin 1915, and..,xevenue returns to Blsb March this- year show that consolidated revenue had jumped from twelve/millions in 1915 to twenty millions in 1518. Although expenditure has gone up by leaps-and bounds, taxation has provided an excess of revenue over expenditure of I over millions in the last three years, and the per capita indebtedness has bounded from £B7 16s. 3d. in 1915 to approximately £l2O at the present time. The country’s net indebtedness last year was £125,572,515, having increased from £96,644,455 in only two years. To this huge national debt has to be added some £26,000,000 owing by local bodies, which brings the total indebtedness, to no less than £150,906,507, a net per capita liability of £137, to say nothing of private borrowings from foreign money-lenders which are very considerable. To the taxatibm ‘burden these figures indicate, and Sir Joseph Ward once more impresses ;U]ibnataxpayers. that a new situation has tO' be met as a result of the war, and that all classes may confidently look forward to a period of increasing taxation . We certainly hope that the Minister of Finance will not prove overoptimistic about the country’s ability to find the" money required without materially hampering progress, or engendering class bitterness; he says he has no misgivings about the country’s ability to meet the greatly-increased taxation burden to come. No doubt its incidence will have a considerable controlling upon its smooth running; Sir Joseph is certainly an old financial horse, but all will realise that he has an unprecedentedly hare financial roa‘d to travel. What taxpayers have to consider is whether present production with produce at present prices or something less will bear the new burden. The total export of produce has doubled in value since' 1914, but it is doubtful whether it actually increased in volume at all. Therefore farmers have to realise that they are paying their taxes out of higher prices, not out of increased quantity of produce raised, and n should be plain to them that the uncertain exigencies of after-war conditions may precipitate disaster. Too much stress is not laid on such a happening, but it is wise to regard it as in the sphere of possibility. Sir Joseph Ward is confident that the Dominion will be fully able to meet and also to gradually extinguish its obligations without general progress being seriously affected, but an uncanny feeling must prevail amongst the burden carriers so long as a convincing vision of the financial highway Is withheld from them. The immediate, as well as the distant future must depend upon the strength of the nation's finance; the people have entrusted this nation’s finance to Sir Joseph Ward, and none hut imbeciles and lunatics would suggest a change of control in the midst of such a financial torrent as we are now crossing. The present Minister of Finance is head and shoulders above any other person In sight as to ability and experience, and is, at least, the equal of

stay foe ka kas, controlled this country’s ship of finance for a losses period tka» any other Minister of Finance and no person is better ahl4 to forecast the anancial future. His view that money will remain cheap after the war we must respect, but unless Drought unoer price control land and necessaries of life will thereby remain proportionately dear and difficult to obtain by the masses. The opposition Sir Joseph Ward encounters against raising war loans at a low rate of interest free of income tax is less, pernaps, of a business or financial nature than one of sentiment. New Zealand war loans are 'being raised under more favourable conditions to all classes than in any other country, not that under other circumstances we should not argue for improvement, if improvement were possible, but the Dominion has placed itself in the most capable hands available; his methods have proved superior to those adopted 'by Ministers of Finance elsewhere, and therefore he is entitled to the country’s unswerving confidence in seeing it through to the end. We are not concerned about any shortcomings in the Department of Finance, but we have fears respecting the drift and dilatoriness in other Departments, more especially in that which governs production; for it is evident that production must be hugely increased, and until it is so increased, 'disaster, line the Sword of Damocles, will continuo to hang over the heads of the men who have to furnish the greatest bulk of the necessstfy money. So long as present high prices are furnishing taxes producers may not feel the pinch very severely, but with increased taxation and uecreased prices, it should be fully realisable wbat is going to happen. It must be borne in mind that not even the collective Ministers of Finance of 'the Empire can guarantee present high prices for produce for any length of time, therefore we urge Government and people to increase production at the earliest possible moment and to the greatest possible extent.