FRIDAY, JUNE 10, 1891.

Auckland Star, Volume XXII, Issue 144, 19 June 1891, Page 2

FRIDAY, JUNE 10, 1891.

Although the Financial Statement, upon the whole, has made a, very favourable impression, and the Colonial Treasurer has gained credit for his en. deavour to grapple with the difficult problem of readjusting taxation upon an equitable basis without producing any violent disturbance of existing financial conditions, there are several features in his proposals which we hope to see amended in committee. At an interview with our special correspondent, Sir George Grey placed his finger upon one serious flaw in the Ministerial programme when he regretted that the Government had not seen their way to wholly exempt improvements. That an owner who desires to expend money in improving the waste lands oi the colony shall be taxed progressively for every sovereign he spends over is a measure which will, we fear, operate very disastrously upon the progress of the country. Extensive schemes of improvement on the large estates are now in progress, which will probably be abandoned if Parliament endorses the suicidal policy of imposing deterrent penalties upon expenditure of this character. It will be clearly to the interest of owners who now hold land for speculative purposes to keep down their taxation by leaving their properties in a state of nature. We believe a progressive tax upon large holdings to be entirely in the public interests, and we should have joyfully welcomed a tax of double or even treble the amount proposed by the Colonial Treasurer if based upon the unimproved value of the land. We would suggest to Mr Ballance that, as revenue is an object which must be kept in view, he should alter his graduated scale in such a manner that the same amount may be taken from the holders of big estates without touching their improvements. A tax of this kind will be an incentive to the improvement of the land—it will compel owners either to increase the productive power of their estates or cut them up. The property tax was vicious in principle because it discriminated unfavourably against the man who worked his land, and let the speculator off almost scot free. A graduated property tax simply intensifies the evil of the impost which preceded it, and which Mr Ballance and his colleagues are pledged to remove.

Another feature in the Budget that will hardly commend itself to the country when fully understood is the proposal to levy upon incomes derived from trade a tax quadruple

that imposed upon incomes of equal amount accruing from salary. If we read the Financial Statement aright — and its terms appear to be perfectly clear and explicit—a storekeeper, manufacturer, or tradesman of any other description, who, by dint of his own labour and aided by the capital he has invested in his business, succeeds in earning ,£SOO a-year, will be taxed at the rate 01 one shilling in the pound, while a Government official, bank officer, or other lucky individual occupying a snug billet, secure from the vicissitudes of trade, which yields him a-year, will pay an income tax of only threepence in the pound. The proposition, upon the face of it, is so monstrously unjust that we hesitate to believe that this can be the true interpretation of the Treasurer's proposals; yet, as we have already observed, the terms of the Statement are so explicit that we can place no other construction upon them. We think we can recognise in this extraordinary distinction between income from trade and income from salary the clever device of some Under-Secretary to protect the interests of his class. To anyone but a man occupying a snug berth it would surely have been manifest that the precarious income derived from a tradesman's labour and capital combined ought, if any distinction were desirable, to be more favourably treated than income derived from labour alone. The Ministerial proposal not only outrages the elementary principles ot equity, but involves such an extraordinary disparity between the tax on salaries and the levies upon traders and men engaged in developing the manufacturing industries of the colony, that we are curious to hear what possible plea can be urged in favour of the scale they have submitted. Were it not'that the glamour of officialism has proved so effectual with Ministers, we should regard it as inconceivable that so preposterous a proposal could by any chance obtain the endorsement of the House. It is well, however, for the Chambers of Commerce and Industrial Associations throughout the colony to be on the alert with reference to a proposal Which seems to be pervaded by a spirit of wanton animus towards mercantile and industrial interests. If the necessary public revenue cannot be obtained by imposing upon all classes of income the graduated scale which the Treasurer proposes in the case of salaries, the scale must be raised. We are convinced that public opinion will never tolerate an unjust discrimination between incomes derived from trade and manufacture and incomes obtained from professional fees or salaries. We view with considerable suspicion the proposal to negotiate for the

purchase of private estate:; for settlement. It would, v/e believe, be utterly impossible to prevent gross jobbery and undesirable pressure upon Ministers under such a system! no matter how honsst the intention of the Government may be in establishing it. With a sound system of taxation, there would be no-lack of suitable land ior settlement. Owners would be compelled either to cut up or cultivate their lands.