ASSISTING RECOVERY

Ashburton Guardian, Volume 53, Issue 287, 15 September 1933, Page 7

ASSISTING RECOVERY

LOWER TAXATION NECESSARY. PLEA OF COMMERCIAL MEN. (Special to the "Guardian.") WELLINGTON, Sept. 14. A reduction of taxation as a means of assisting national recovery in New Zealand is a device so sound that there is still hope of its being adequately dealt with, by the Minister of Finance in his Budgetary statement when Parliament meets (says a statement by the Associated Chambers of Commerce). The far-reaching effects that would attend such a step would amply compensate for the tardiness of the Government in'the matter to date. It goes without saying that the reason why taxation in Mew Zealand is so heavy is. because of the high costs of Government. The people can no longer afford to buy all the existing Government services. It is a wry truism that once a tax is imposed by a Government it becomes almost immovable^—and the more indirect the tax the greater its tenacity. This is largely due to the fact that, crowding in behind the taxes and buttressing them to the last chink, is the body of services which the Stat© maintains at the cost of the taxpayers. Only by relieving that pressure from behind can taxation be eased.

One of the difficulties facing the Government in its work of economy, therefore, is the natural (resistance of established State services. This does not mean that Government departments have not lent aid in elfecting administrative economies in. their respective branches, but the sum of savings made is of small account alongside the task that needs to be undertaken. A policy of "save—but save the services" is not sufficient for the needs of the situation. There is an economy point beyond which State departments are not iikely to go, since their own existence becomes involved. It is then the work of the Government to deal with the curtailment or elimination of departments- which the country can no longer afford. There is little! evidence that the work of economy has been carried beyond the point at which State departments stop, and it cannot be said that the limit in economy has been reached. At the time the sales tax was introduced, it was plainly stated on behalf of the commercial community that the tax could be justified only by economies in State expenditure to an extent that would relieve the total tax burden. No such relief has been given. It is istill possible to give a much-needed fillip to trade by making Government economies equivalent to, 6ay, the estimated yield of the sales tax, and then removing the tax. It is axiomatic that wealth is capable of far more profitable employment by private hands than when it is poured qn the relatively barren soil of the State, which gives in return many services which are unproductive. A fact t°o little appreciated is that private trade, industry and commerce, and not the State, is the economio employer, and that the restoration of balance lies in the contraction of- State activity in order to permit- the expansion of private enterprise.