COMMENT ON BUDGET.

Auckland Star, Volume LX, Issue 182, 3 August 1929, Page 13

COMMENT ON BUDGET.

ECONOMIST'S APPROVAL. LAND TAXATION DEFENDED. PRIMAGE BIPOST A HINDRANCE. "While a deficit in one year should not be such as to cause panic, and has perhaps been taken too seriously, it is wise policy to ensure as far as possible that it should not recur," said Dr. H. Belshaw, professor of economics at the Auckland University College. Much talk had been made of departmental economics, he continued, and there was no doubt that something could be achieved by diminution in departmental expenses. On the other hand, it was not likely that a sufficiently significant reduction in such expenses could be brought about within a short space of time. . ; , The proposed increase in land taxation ,in the form of a supertax on large estates, or of an income tax on farmers and farm partnerships with holdings of an unimproved value of £12,500, with provision for a set-off, seemed on right lines. Minor anomalies, however, might appear in practice. . The extent to which the large farmer had escaped contributing his full share .to .the revenue of the country was one of the outstanding anomalies in our tax system, while the rate of graduation of land tax had been too small to achieve, the purpose of breaking up large estates. The proposal to increase the primage duly on imports from 1 to 2 per cent, was one to which Professor Belshaw said he was not favourably disposed. On general grounds he objected to any additional hindrance to imports, but he did not think the scale of tax sufficient -o [warrant any considerable heart-burnings. Graduated Taxes. "I would have preferred to see the same amount of revenue raised ,by an addition to the incomd tax through a somewhat steeper graduation in the upper ranges," he said. The proposed taxing of State trading departments was, he thought, wise, ■where they were in competition with similar concerns in private hands, but there was no sound reason why imports by the P. and T. Department should be charged a Customs > duty. 'Sir Joseph Ward-appeared to suggest that a vigorous policy of land settlement would provide a permanent cure for unemployment, but Professor Belehaw considered such a policy, while advantageous to the country, was not a panacea of itself for the general problem of unemployment. It was too slow in its operation ,to be a satisfactory means of compensating for variations in "the demand for labour. _ In any case a vigorous policy of this kind carried with it two dangers. Firstly, it might lead to a recurrence of la,nd inflation, and, secondly, it might cost a great deal more than it was worth. In view of the increasing competition of motor traffic; the professor considered the . policy in regard to short branch lines sound, especially as they had fulfilled their purpose of opening up the country. Settlers in . districts where ;• branch line was running as a loss might be given the option under the Local Railways Act-'of. 1914 of taking ; oyer such lines themselves.'; The suggestion to co-ordinate transport policy was wise, but, if it were to b? considered, the sooner the better, since every year additional and powerful vested interests were being established. Apart .from public control,' or, at.' lea>t,- regulation,: it was difficult to see how the co-ordina-tion of road and railway policy which Sir Joseph Ward spoke of could be brought about. , | . . •,