FINANCING WAR EFFORT

Waikato Times, Volume 125, Issue 20919, 26 September 1939, Page 6

FINANCING WAR EFFORT

NEW TAXATION EXPECTED DISCUSSION IN THE CAPITAL POSSIBLE REVENUE SOURCES (By Telegraph.—Special to Times) WELLINGTON, Tuesday While New Zealand has been waiting for the announcement tonight ot the measures which the Government is to take to finance the Dominion’s part in the war, rumour has been busy, and reason has been brought to bear in an effort to read the official mind. Frequently rumour is based on a reasoned assessment of the probabilities, and therefore rumour is sometimes not far wide of the mark. Most commonly it has been suggested that there will be substantial increases in the taxes on income, on petrol and on wages. While any or all of these taxes might be included in the Government’s plans, there are other and even more probable methods of raising additional revenue. Methods suggested in wellinformed quarters in tne capital are a war tax on the sale of goods, an increase of up to one-third in income tax, additional imposts on such I “luxuries” as cigarettes, tobacco. | liquor and tea, and a supertax on New Zealand investments overseas. Petrol Tax Limitations Regarding the suggested increase in the price of petrol, it is argued j that prices are already so high that | any further increase in tne tax I would be a very doubtful proposition | from a revenue-producing point of I view, since even the present price | has resulted in a very substantial reduction in the quantity of petrol used. In addition, further increases in petrol costs would fall heavily on the transport industry and certainly result in another increase in the cost of living. Consumption of tobacco, tea and liquor would no doubt fall also if prices were increased, but it is claimed that this class of tax would be paid mostly by those best able to afford it. The imposition of a supertax on investments overseas has been canvassed in authoritative sources in the past few days. The amount of New Zealand private capital invested overseas in the past four years has variously been estimated at up to £17,000,000, and it is known that the Government has been investigating the possibilities of causing this capital to play a greater part in meeting the Dominion’s financial needs. Indeed, this disposition of capital has been one of the most fruitful sources of political discussion in several recent sessions of Parliament. And it is possible, of course, that the extent of overseas investments has been magnified or the reverse according to the political affiliations of the critic.