REVENUE AND TAXATION.

Taranaki Daily News, 8 September 1922, Page 7

REVENUE AND TAXATION.

AUSTRALIA AND NEW ZEALAND. “Looking Ahead” writes: “Now that the year’s Budget is being discussed in the House of Representatives and members are anxious to air their knowledge of finance for the benefit of their constituents and other interested people, perhaps you will allow me to say a word or two in your correspondence columns concerning the Prime Minister’s statement of a few weeks ago, to the effect that taxation is lower in New Zealand than it is in Australia. “What Mr. Massey had got in his mind, no doubt, was that the revenue collected by means of taxation during the financial year ended on March 31 last was less per head of population during this period in the Dominion than it was in the Commonwealth. Even this, as I presently shall show, was incorrect, but from the manner in which the Prime Minister expresses himself, many people assumed his contention to be that the rate of taxation was lower here than it was in Australia. Ido not wish to suggest for a moment that Mr. Massey intended to mislead the public, but that he did mislead many simple people has been made abundantly evident during the last few weeks.

“Perhaps it will help to clear up the misunderstanding that has arisen on this subject, if I quote here from the Australian and New Zealand Year Books, supplemented, in the case of last year, by the Abstract of Statistics, the taxation per head of population in the two countries:

Australia: New Zealand State and Excluding Commonwealth. Maoris.

“This population of Australia for 1922 is based, for the purpose of this calculation, upon the natural average increase, and therefore to that extent is approximate only. The figures show that during the‘whole period the taxation per head of population has been less in Australia than in New Zealand and that the average for the seven years has been £9 6s 4d in the Commonwealth and £l2 4s 8d in the Dominion. This means that on a per capital basis the New Zealand taxpayers have contributed to the Treasury during the seven years some £23,000,000 more than they would have contributed under the Australian conditions.

“But, of course, the amount of revenue derived from taxation is not necessarily an index to the rates at which it is levied. The payments per head of population in both Australia and New Zealand were highest in 1921, when taxation was being paid on thd incomes earned during the flowing tide of prosperity of the preceding year and Customs duties on the excessive imports. The huge drop in New Zealand in 1922, from £lB 9s per head to £l3 5s 5d per head, was not due to any remissions of taxation or duties, but to shrunken incomes and much reduced imports. A decline of £2,245,058 in income tax and a fall of £3,313,290, in Customs duties disclosed by the Budget the members of the House are now discussing, tell the whole story.

“Australia has fared rather better than New Zealand has, its contributions to the revenue through taxation never exceeding more than £l3 Is per capita and now dropping by only 16s per capita, while New Zealand’s soared to £lB 9s and now has slumped by £5 3s 7d. Surely it is a fair assumption from all this that the incidence of taxation in this country stands sadly in need of revision in the interests of industry and enterprise.

“The most prosperous of the States of the Commonwealth have not dried up by excessive income taxation the resources of companies engaged in the development of trade and the extension of settlement, and none of them have gone nearly to the lengths New Zealand has in this respect. Mr. Massey estimates a further decline of two millions in the revenue from income taxation this year. It will be inevitable if the Government persists in penalising the capital that would make the wheels go round and the land produce to its utmost capacity.

“And then we shall be told on the strength of this huge drop in the revenue that the rate of taxation in New Zealand compares still more favorably with that in Australia. The process onlj’ has to bt continued long enough to make us a tax free people through our sheer inability to pay.”

£ s. d. £ s. d. 1916 6 8 5 6 12 1 1917 6 17 6 9 11 11 1918 „7 0 0 11 3 9 1919 ....... 8 18 3 12 7 8 1920 ....... 10 14 0 14 2 9 1921 13 1 0 IS 9 0 1922 12 5 0 13 5 5