GROWTH OF TAXATION.

Auckland Star, Volume LIX, Issue 33, 9 February 1928, Page 9

GROWTH OF TAXATION.

AN INCREASING BURDEN.

NOT SOLELY

RESPONSIBLE

SCHOOL OF ECONOMICS

INVESTIGATION.

The Canterbury Chamber of Commerce has just issued a bulletin containing some interesting facts concerning the growth of taxation in New Zealand. This bulletin was prepared by the department of economics of Canterbury College. Reference is made to the fact that taxation has increased considerably in nearly every country in the world since 1914. The bulletin says that expansion in both prices and population does not in itself change the real burden of taxation. Given a sound and economical system of taxation, it would be futile to complain of increases in the burden. It is, however, emphasised that in New Zealand since the beginning of the present century the taxation has been increased at a rate much more rapid than can be accounted for either by growth of population and price inflation, or by abnormal causes such as war.

The statistics furnished in the bulletin show that for 1925-2(3 the war charges totalled a little more than £5,000,000, including interest, sinking fund, and war pensions, while the total State taxatio?i yielded nearly £17.000,000. Omitting the amount collected to meet war charges the taxation totalled nearly £12,000,000. This represents an increase of about 112 per cent above the taxation of 1913, £5.61 millions. The growth of population and the rise in prices combined account for an increase of only 101 per cent. It appears, therefore, that, even excluding the taxation necessary to meet war charges, the State is now imposing a heavier real burden of taxation upon the people than before the war. The heavy war charges, which must necessarily be collected, do not appear to have succeeded in stimulating greater economy in other departments of State expenditure. * The bulletin also refers to the fact that for many years past, and particularly since 1920, both the State and local bodies have borrowed extensively, and this extensive borrowing appears to have been accompanied by lavish expenditure in almost all departments. The following table of the growth of gross debt and annual charges of State and local bodies is significant:— Gross Debts and Charges ( £ millions). At March 31, 1900. 1913. 1920. 1926. State debt 47.9 90.1 201.1 238.9 Local body debt 8.1 22.2 30.5 60.2 Loan charges— State debt 1.75 2.72 7.25 9.34 Lotil body debt .45 1.10 1.63 3.74 The question is then put whether the State in the past or at present is getting adequate value for money spent on socalled developmental services. It has always been hoped, too, and often promised, that as population increased public services established out of loan money would become increasingly , profitable, and that the burden on the taxpayer might be lessened. The event seems to indicate that, as population and public services increase, the burden of taxation per capita increases too.