RESERVATIONS.

Auckland Star, Volume LXVII, Issue 184, 5 August 1936, Page 8

RESERVATIONS.

BUSINESS OPINIONS. ORTHODOX FINANCE. CRITICISM OF LAND TAX. A feeling of relief—with reservations —is in brief the opinion on the Budget proposals expressed this morning by Mr. A. A. Ross, president of the Auckland Chamber of Commerce. Mr. Ross criticises several aspects of the proposals, like the land tax, but he says the community will be relieved at the orthodox methods used bv Sir. Nash. '

"The first feeling of the business community with regard to the Budget is a sense of relief that the Minister has relied on orthodox methods of finance associated with a balanced Budget in order to meet the extra commitments involved in carrying out the Government's policy," said Mr. Ross. It wai his opinion particularly, as in view of the recent Reserve Bank legislation, there had been some grounds for fearing that unusual financial expedients might be adopted. "The simplification of the taxation system is also a good thing," he added. "In saying this I am not by any means fully endorsing the taxation and expenditure proposals contained in the Budget. Indeed, the Budget to a large extent does not bear out the Prime Minister's statement made on election night that no one had anything to fear from the change in Government. The increase in total taxation as compared with the last Budget is some £0,000,000, which represents an extraction of a like amount from the pockets of the people, though it is true that some of this increase is to be returned to the people in the form of social services."

Unemployment Might Result, The business community, he added, would have to face up not only to in- , creased rates of income tax, hut also, • in the case of such concerns as are land-holders, to a very substantial increase of land tax. Those increases, , coining at the close of a long period of depression and right on the top of the introduction of increased labour costs ■ arising from both higher rates of wages and curtailed hours, were likely to endanger the expansion, development, and (in some cases) the continuation of existing businesses. To that extent the employment of large numbers of people might be prejudiced. "As regards the land tax, the provisions violate one of the fundamental principles of taxation, in that the tax bears no relation to ability to pay," Mr. Ross said. "The Minister has stated that the object as applying to city properties is to ensure that values accruing through public activities and increased population should come to the State; but it is an actual fact that in a very large proportion (if not the majority) of cases the present holders of property have already paid for such accretions of value. "With the reintroduction of the graduated land tax it should be stressed that the item should be allowed as business expenses and rendered deductible from income for income tax purposes. "The Minister's comparisons of taxation on different incomes as between Britain and New Zealand apparently need to be accepted with some caution, as it would seem tllat they do not allow for the fact that unemployment tax (which is universal in New Zealand and additional to income tax) has 110 close counter-part in England. l 1 or this reason some revision of Mr. Nash's figures is desirable. i "The question of what criticism may be necessary in regard to the largely j increased Departmental votes must be deferred until the detailed figures and particulars are available." As president of the Free Kindergartens' Union for New Zealand, Mrs. Alfred Kidd said this morning that she was delighted with the allowance of £GOOO for " kindergarten work, and that the Government was recognising its responsibility towards kindergarten education. In the past years there had been 110 slight struggle to maintain the standard of "work, and wonderful efforts had been made by the various ladies' committees and the mothers' clubs. The Government's allowance would considerably - e-.jc the burden and allow the movement to advance in a nTbre rapid and progressive wr.y.