The Waikato Times. WEDNESDAY, AUGUST 11, 1937. REGARDING TAXATION.

Waikato Times, Volume 121, Issue 20269, 11 August 1937, Page 6

The Waikato Times. WEDNESDAY, AUGUST 11, 1937. REGARDING TAXATION.

The Prime Minister has given an assurance that a revision of taxation will be made during the session, and the particulars will be awaited with general interest. The pledge not to increase taxation was made by Mr Savage in his policy speech in Wellington when he opened the election campaign. It was as definite as anything could be, so that the Budget proposals, which increased both income and land tax, came as a distinct and unwelcome surprise. No attempt to defend this course was made during the debate, but when an Imprest Supply Bill was before the House, Mr Savage was asked by Mr .Poison to deny that he had said “he would reduce and not increase taxation.” The Prime Minister replied: “We will reduce taxation all right when we get rid of the rest of the mud the honourable gentleman’s party left,” and he added that in his opinion taxation was then lower than it was prior to the elections, on a comparative basis. The returns show that taxation has yielded the Treasury some millions of additional revenue, so that no good purpose would be served by attempting to deny that taxation has heavier. The Budget provided for it, yet the Prime Minister twitted the Opposition because, as he said, “ our predecessors did not seem to know any method of doing anything excepting by first taxing the people to get the money.” There are definite statements on record pledging the Government to adjust taxation, and to remove oertain special items. “ I "will admit quite frankly,” said Air Savage on one occasion, “that I promised to remove, for instance, the sales tax and the high exchange.” It would have been unreasonable to expect the Government, newly elected to office, to make the adjustments at once. They had to find out, by making careful estimates, what the effects would be on the .national revenue, but they must admit that they were pledged not to increase taxation. The matter was put in a delightful manner by the member for Rangitikei, a strong supporter of the Government, in an address at fylarton. Air Wilson said: “ The only unpleasant thing we have done that there was a reasonable inference would not be done was to increase taxation, and I for one would have been sorry had taxation not been increased.” To make Air Savage’s bold statement, “ further taxation is out of the question,” into a reasonable inference is about the most amusing thing recorded in public life for some years past. There is, of oourse, the possibility that the adjustment process has been tackled by sections. The increases came in the first year, and no one denies that they came. The balancing reductions should come, then, in the session that will commence next month, and, as the increases were on direct taxes, the bulk of the income tax adjustments falling on those with moderate incomes, the reductions, if Mr Savage’s speeches afford a guide, will be in indirect taxation, involving a revision of the Customs tariff. The Prime Alinister holds that the trend in recent years has been the other way, and that indirect taxation falls with undue severity on those least able to pay. Having increased the direot taxation last year, the opportunity will now be offered to reduoe the indirect taxes. It would be difficult to justify any increases in any form, for if in Air Savage’s estimation, further taxation in 1935 was out of the question then, with the additions since made, it must now be at a dangerous level. These are matters falling within Mr Nash’s province, but a special committee has been preparing the ground and when the Alinister of Finance returns the task of revising taxation will have to be given precedence for Air Savage expects the Financial Statement to be ready early in the session.