The Waikato Times WEDNESDAY, JUNE 3, 1936. TAXATION POLICY.

Waikato Times, Volume 119, Issue 19902, 3 June 1936, Page 6

The Waikato Times WEDNESDAY, JUNE 3, 1936. TAXATION POLICY.

The Parliamentary correspondent of the Times has reported growing interest in the taxation policy of the Government. This, of course, will not be disclosed until the Budget is brought down, after the recess, but it is not difiicult to understand the interest with which the Statement is being awaited. The activities of the Government thus far have all tended to increase State expenditure. The cost of governance has risen and, as movements will have a cumulative effect, it is not possible to ascertain the aggregate addition to the national expenditure. The Minister of Finance, however, Will be acting on carefully considered estimates, and they will affect the taxation policy to be embodied in the annual Bill. ‘

The importance of the financial legislation that has yet to be introduced directs attention to the views on these matters ex—pressed by members of the present Government during the election campaign. Naturally the Prime Minister dealt with finance and taxation when he made his policy speech in “'ellington. “Readjustment of taxation,” Mr Savage said, “was long overdue. For many years the tendency has been to shift taxation from incomes to indirect forms of taxation, which always involved the poorer section of the people in the payment of taxes out of all proportion to their ability to pay. Whatever way a tax was levied it must come from the incomes of the people. Rea—adjustment of taxation must not be understood to mean increased taxation which has already been overdone.” This statement was repeated by :the Labour leader again and again, stress being laid on the undertaking not to increase taxation.

When he reviewed the Labour proposals the Hon. W. Downie Stewart said that one of the most significant statements was that made by the leader of the Labour Party that taxation had reached its limits and that further taxation was out of the question. Mr Savage, he added, had expressed the same views with regard to borrowing. There was, of course, much criticism of the policy outlined by Mr Savage, his opponents contending that Labour could not possibly carry out its programme without adding Substantially to the burden of‘taxation, but the Prime Minister reiterated his promise and expressed his confidence that it could be done.

The position is, then, that the Government is pledged to adjust the incidence of taxation without increasing the burden, and presumably the task set the Minister of Finance is how to effect the changes within those rather strict limits. The mention of direct and indirect taxation in many of Mr Savage’s addresses leads to the conclusion that there will be an adjustment by reducing tariffs, the most effective of the indirect forms, and increasing on a graduated scale either income or land tax, or both. How—ever, the most importance will be placed on the oft—repeated assurance of the head of the Government that “further taxation is out of the question.” Fortunately the returns available indicate that the national revenue is buoyant, and Mr Savage, when speaking in Hamilton last; week, laid emphasis on the general recovery of domestic trading, quotingr figures to show that the trend in all depart—ments was upward. The surplus for the past year was also an encouraging Sign, and if the improvement continues it should be of great assistance to the Minister of Finance. The party has asserted more than once that all pledges Will be fulfilled and among them is one not to increase the burden of taxation.