DOMINION’S TAXATION.

Taranaki Daily News, 12 February 1921, Page 9

DOMINION’S TAXATION.

mANY CALLS FOP MONEY. 1 ' REVIEW BY MR. MASSEY. COUNTRY PERFECTLY SOUND. Taxation and criticism of the amounts being levied in New Zealand at the present time were dealt with at some length by the Prime Minister in responding tothe toast of the Government luncheon tendered to him at Pukekohe last week. speech was briefly reported last week). The Dominion and those responsible for its government, he said, had had n. most strenuous time in , the past few yno.rs. The problems of' peace were'jjo less difficult than those! of the war. TT<? liked to take notice of j adverse criticism levelled against his | administration. The principal one at I present was that the Government was: sinning by-increasing taxation. He wished they would try to recollect j one instance since the war ended in! which any increased taxation had been. collected. The country 4 had borrowed' £100,000,000 for war purposes, the: greater part of which, fortunately, had , been borrowed within New Zealand. The rate of interest was not so low as on loans made before the war. ranging up to five and five and a-half per cent., subject to income tax. On that £lOO.000.000 the country had to find interest and sinking fund. On top of this obligation had come demands from the men on .the railways, members of the Public i Service and the officers of the Post and Telegraph Department for increased' salaries to meet the increased cost o; living. An arrangement had been reached to meet these demands, which would coat the people of this Dominion nearly £2,000.000 per annum. Then there were all sorts of incidentals. Everyone knew of the trouble on account of coal. He was not going to blame anyone in particular for that, for he had gone among the miners and had found them to be very decent fellows. He had to run the' railways of this country. At the commencement of the session in 1019.

when he took over the management, he instructed the General Manager to keep them going at all costs. The country was actually losing £lOOO compared with what the case if it could get the coal in New Zealand as before the war, w/ith a certain proportion from Australia. War pensions cost nearly £2,000,000 a year. NO ANXIETY AOOUT PRESENT DOAN. If all those things were taken into consideration, continued Mr. Massey, it would be seen where the money rared by taxation went. Added to this were the subsidies for butter and flour. Nothing would please him better’than to say'that taxation was to be lowered, but he could not promise it. -Some people talked about the loan which was before the country, most of which was in the Treasury—so much so that his anxiety about that loan was at an end. Promises had been made to the mei) who had gone to the war. and up to the present those promises had been kept. Homes had been provided for 8500 men while by a coincidence 8500 had also been placed on the land. There were still soldiers to provide for, and the Government had asked the people of the country for another five or six millions. So far is he could judge they had got it, or would get it, Yet people came along and asked why taxation was not reduced. VERY LITTLE COMPULSION NEEDED. “I look around this room,” proceeded Mr. Massey, “and I cannot see a single individual who has had his taxation ii>creased in the last two or three years.” In regard to the loan, it was at percent. °for 12 years. The man who was not satisfied' with that interest and term, and with the security offered, was hard to satisfy There was a little compulsion, but that could not be avoided. It was a war loan, and, he was glad to say, was the last of the war loans. More money would be required. though he did not know when it would be needed. It would be necessary to go on to the open market for it. Money would be needed for roads, bridges, hydro-electric power, education, and numbers of other purposes. The country had got on very well with the reconstruction problem, and had nothing tt> complain of at present. Criticisms coming from a New Zealander in London recently had declared that unless great care was taken the country would be faced with bankruptcy'. There were two words which the citizens of New Zealand should never use. One was repudiation and the other was bankruptcy. There was not the slightest fear of either. He believed the Dominion would get through. He did not say there would not be a pinch, but if the people of the country would only take off their coats and work there would be nothing to fear. So far as he could remember, there had never been a season liktj the present in the North Island for grtwtff, and there had never been such a price for butter, z One trouble was the price of wool, but the country was getting more for butter, and cheese, and might get a little more for meat. It might be necessary to wait a little longer for the money. When the Imperial requisition came to an end there had been a sort of interrep num, during winch the money was n< coming in. It had scarcely begun _tu come yet, and it would not come with the same promptitude as under the requisition. In a way he would like to see another requisition if it could come without a war. It was the best, thing that had ever happened for New Zealand. IMPORTS AND CUSTOMS DUTIES. Another factor had to be considered. They had seen the great increase of imports from England. The consequence was that the customs duties had been coming in with a speed that had never been equalled before. Two years’ customs duties had been collected in one year. This could not be maintained. While this year’s returns would be far above the average, next year would be proportionately below the average, and it was of next year that he had to think. He had to set aside a reserve to tide over this period. He hoped that when the financial year came to an end the public accounts or the Financial Statement would show that there had been a very considerable saving on the part of the Treasury and the different departments. THE ACCUMULATED SURPLUSES. Reference had been made to the £15,000,000 of accumulated surpluses, and it had been suggested that the Government had wasted it.-That, money had been snent on placing soldiers on

the land ai '. finding houses for them. The suggestion was that it should have j been left where it was.- The greater part of it was earning 4 per cent. The Government had either to take it, to borrow other money, or to break the country’s word to the soldiers. If money had been borrowed it would have cost 5| per cent., and would have* required a sinking fund o( 1 per cent, as i a war loan. By making the other ■ arrangement the Government had saved i thaf sinking fund and protected the . pockets of the taxpayer to that extent. That was only one item. The next Financial Statement would show that ■ there had been savihg all round.

He insisted that the country was absolutely sound. No country could be sounder. Roughly, the war debt and the ordinary debt amounted to £200,000,000. There were assets for everything except about £60,000,000. The country therefore was in a truly sound and satisfactory position. ( The difficulty was the next 18 months, to get the revenue to meet the accounts. He would like* to be able to hope that the subsidy on butter and flour could be done away with, which would be a saving to the taxpayers of £1,000,000. He wished to assure them that so far as the finances -of the country rvere concerned they* were never better looked after tfian at present by the officers of the Treasury. Nothing that could be done was being left undone to meet our liabilities