Wairarapa Times-Age SATURDAY, SEPTEMBER 3, 1938. STILL ANOTHER TAX.

Wairarapa Times-Age, 3 September 1938, Page 4

Wairarapa Times-Age SATURDAY, SEPTEMBER 3, 1938. STILL ANOTHER TAX.

JN itself, and in the suggestion it conveys that difficulty is anticipated in balancing the social security accounts, the amendment introduced to make companies as well as individuals liable to pay the tax of one shilling in the pound is not an encouraging development of the Government’s financial plans. This is a staggering sequel to the Finance Minister’s very recent assurance that, in the ordinary way, there would be no need of additional taxation to meet social security demands. The latest impost is open to objection on two main grounds. One is that in the ease of all companies able to carry on in something like normal fashion, the tax. will be passed on to the public in their capacity as consumers and so will raise the cost of living. The other is that the tax, as an additional item of expense, will penalise and hamper trade and industry, much as the sales tax does at present, though perhaps not. to. the same extent.

On both these grounds a responsible Minister of Finance, intent on raising revenue by the least harmful method available, might have been expected to avoid the tax now proposed. How much the shilling in the pound on company incomes is expected to produce has not been stated, but the amount may be in the neighbourhood of £1,000,000 per annum. There is no doubt that this sum, or whatever amount is needed, could have been raised with less harmful effect, as well as in more straightforward fashion, by increasing the social security tax on all individual incomes. On the basis of figures lately cited by the Finance Minister, the increase in the general social security tax needed to produce another million, would be l|d in the pound. This increase no doubt would have been unpopular, but in one way and another the additional tax on companies is likely to impose appreciably greater burdens on a considerable proportion of the population, particularly people of moderate means with families, upon whom the effect of any increase in prices falls most severely, than would have been imposed by an increase in the social security tax on individuals. Though it is imposed directly on companies, the new tax of course will be imposed indirectly on the members of the buying arid consuming public. In' buying gOods and services, the public will pay, not only the amount of the tax, but the needlessly high cost of its collection by a bad and wasteful method. We are continually being told by Ministers and their supporters that production in this country is bound to expand, but taxation at its present record level, not least the crushing taxation imposed on companies, is already doing a great deal to restrict the expansion of trade and industry. With each addition to the load of taxation this restriction of course must be intensified. That the Government is already driven to z such undesirable shifts in raising additional, revenue evidently is not calculated to inspire or justify a confident outlook. TRADE AND DEVELOPMENT. THERE is much that is or should be of interest to New Zealand in the observations made by the Australian Minister of Commerce, Sir Earle Page, on the outcome of his recent mission to London. From these observations it is clear that the foundations have been laid of a new and up-to-date understanding between Australia and the Mother Country on questions, not only of trade, but of oversea, development, which includes, in the ease of Australia, a many-sided development of industry. The main emphasis, Sir Earle Page stated amongst other things “has now been placed on the desirability of Australia substantially increasing her population.” This, he added, is recognised to be dependent on the progressive development of sound secondary industries, combined with the expansion of primary industries. This development, in turn, depends upon markets being available. Britain has engaged to help Australia to expand her markets in three directions —in Britain, in and in foreign countries. During the extended stay in London of the mission headed by Sir Earle Page, something was done towards working out in detail the understanding thus outlined. In the discussions of the Australian delegation with British Ministers, account has been taken of the interests of the Dominions generally, but this country, with others, obviously should be on the alert to assert its individual claims to consideration where questions of trade and development are concerned. The methods by which Britain is to “help Australia to expand her markets. . .in Britain, in Australia and in foreign countries” certainly will be of practical interest to New Zealand, the more so since British goods are admitted to this country on decidedly more liberal terms than are conceded by our cousins across the Tasman.