THE CUSTOMS DEFICIENCY.

Auckland Star, Volume XX, Issue 56, 7 March 1889, Page 4

THE CUSTOMS DEFICIENCY.

Sir Haeky Atkinson, when delivering his Financial Statement]astsession,summarised the financial position of the colony very briefly at the end of his Statement. One hundred and ninety thousand pounds o* additional revenue had to be provided, and lie proposed to raise it, from Customs duties. He said : "To provide this sum of £190,000 I have proposed additional Customs duties estimated to yield £207,000. If the estimate should prove correct we shall have a surplus of £17,000." Eleven months of the financial year have now passed over, and it is pretty evident that instead of a sutplus of £17,000 accruing from this source, the chances are in favour of a big dcliciency of aileasb £50,000 or £60,000. It will be remembered that in order to meet last year's deliciency of £128,603, tho Treasurer proposed a primagoduty ot 1 per cent, on all goods imported into the colony, whether free or dutiable for two years. This duty was estimated to yield this year about £58,000, and it seems highly probable that the Customs deliciency this year will just about represent the amount anticipated to be received from the primage duties.

It is a matter of mere speculation as to what course our Treasurer will adopt when in delivering his next Financial Statement he finds himself face to face with the unpleasant fact that Customs duties have already reached such a pitch that it i* almost impossible so to alter or adjust them as to screw anything further by their means out of the taxpayer ; but he will do well to take warning by the Venezuelan Government, who having borrowed many millions for public works, spent it as we did, and then found their country miserably depressed and impoverished. The interest on the borrowed money had to be raised, and the Venezuelan Treasurer, like our own Treasurer, could imagine no other way of obtaining it but by increased Customs duties. The rosult with them was, as with us, these duties failed to supply the deficiency ;so as the money had to be got, and there was apparently no other way of getting it, the Customs duties were again raised until at last they reached 70 or 80 per cent, ad valorem. Then the people rose in rebellion, displaced the Government whose fiscal resources were bounded by Custom-houses, and put others in its place who held more advanced and liberal views.

The revenue-producing power of the people of this colony is remarkable and almost unique, but there is a limit beyond which it is impolitic to press them, and that limit is now reached. In his last Financial Statement the Treasurer made this remark: "It is said that New Zealand colonists are heavily taxed. Let us, without stopping to consider the actual facts, assume this to he true and then look at it from another side. Where is there another community like ours of some 600,000 people who in a time of longcontinued, almost unexampled commercial depression, can yet raise a public revenue of £3,500,000 a year ? That is t\\e sum they annually contribute to the State, mainly, if not wholly, out of their earnings." If we stop to consider these actual facts the working out of the figures places the colonists in a still more remarkable position, and the wonder must increase as to how they have in the ' past been able to meet their liabilities, and at the same time keep things decently comfortable in each one's own family circle. The Treasurer alludes to our population of 600,000 souls, but the self-evident fact must not be overlooked that out of this total there are only about 130,000 bread-winners and tax-producers; and out of those 130,000 there are only 28,000 who, according. to the property tax return, own property of a value of over £500. These 28,000 are supposed to be specially taxed, and they contribute between them an extra sum of £380,000 to the revenue over and above what they pay in common with others through the Customs.

However, these 130,000 taxpayers have to contribute annually to the revenue a sum equal to about £27 per head, besides providing for their own wants as well as for the wants of the balance of the population, 470,000, who are entirely dependent upon the earnings of the 130,000 adults. _ If these figures are carefully considered it must at once be apparent how impossible it is to expect to draw anything more either by Customs duties or any other tax collected " mainly if not wholly out of the people's earnings." The people's earnings as earnings are growing. small by degrees and beautifully less every year, and as their earning power decreases so it necessarily follows their power to pay taxes *• mainly if not wholly" out of those earnings likewise decreases. The Treasurer, therefore, if he desires to carry out his political programme of keeping the expenditure of this colony within . its income,, will have next session to initiate some scheme of raising revenue other than taking it out of the people's earnings through the medium of Customs duties. True, last session he allowed sugar to pass without placing an additional tax upon it, but he at the same time rather significantly remarked, "Sugar may be fairly called a necessary article of food— the most widely and largely used of any food imported ; it is extensively used in our manufactures, and it will al°wayß be available if at some future time a need for some additional revenue should arise, and it will moreover be available with the least disturbance of trade." This means, that as sugar is a necessity, increasing the. tax on it would not disturb trade, that is, would pot- drive it out of the

market, and that the revenue derived from it would would be certain. But we have all heard of that last straw which broke the unfortunate camels back, and we have little doubt that if the Treasurer proposes to meet this year's deficiency and next year's necessity by increasing the sugar and tea duties, the backbone of the colony, the people s earnings, will bo most seriously jeopardised, even to the breaking point. The question, as all must allow, is an extremely delicate and difficult one, but it certainly is not insurmountable. The mistake hitherto made has been that we have drawn the bulk of our national revenue from Custom duties. Where the.se are levied on the necessaries of life, the poorest man must pay them in precisely the same proportion as the rich man, but it is evident that the man in receipt of 4s6d a day, having a wife and family to keep, feels the weight of this tax upon the necessaries he is compelled to purchase much more than the man who has ten or twenty times his in-

come. . *_ x The eleven hundred odd absentee New Zealand landowners do not pay one stiver towards ourUustomsduties. Theirshepherds and station managers do, but the proprietors themselves do not- contribute towards that tax from which no less than one million and a half pounds sterling are drawn "mainly if not wholly " from the people's earnings. Seeing that these absentees draw immense revenues from this country from their annual wool clip, why should they be allowed to escape this tax whilst every man in the country, although only in receipt of perhaps 30s a week, is compelled to hand over to the Government a very large percentage of his small earnings?

Such an illustration as the above proves that it is not fair to raise the bulk of a nation's revenue through the Customhouse. Our Premier's sole remedy for meeting big deficiencies is more Customs duties. To subsidise local bodies he proposes an extra twopenco a pound on tea, and so on; but such a policy is simply making the many contribute what thoy can ill afford to pay, in order that the wealthier members of tho community may escape their fair share of taxation.