"STAGGERING."

Auckland Star, Volume LXVII, Issue 185, 6 August 1936, Page 8

"STAGGERING."

NEW TAXATION. CONCERN EXPRESSED. CHAMBERS OF COMMERCE. " ROAD TO INFLATION ? " (By Telegraph.—Press Association.) WELLINGTON, this day. "The association views with ti'2 greatest alarm the increased and staggering taxation. The proposed taxation is, both in total and in amount pei' head of population, greatly in excess of the taxation during any previous year, the war years included." So reads, a statement on the Budget issued by the Associated Chambers of Commerce. "The Government," says the statement, "claims to be -following in the footsteps of Scddon, but oil the per capita basis the position is that the citizen to-day is to be called upon to pay in taxation nearly five times the amount, he was called upon to pay during any year of the Seddon Government. "Income tax rates proposed will seriously hamper, and may, indeed, cripple industrial and commercial activity and expansion. "The association deplores the fact that the Government proposes not only to adhere to the present inequitable system of company taxation, but also proposes to increase the rates of company income tax. The Government seems blind to the fact that the income tax, as proposed to companies, is a tax on paper profits, not dividends paid. The tax takes no account of the fact that profits may not be distributed, but may be required in business.

"The statement says that, in connection with the comparison made with England, if the unemployment tax was taken into account the result would show clearly that New Zealand taxation is in oxcess of taxation in England. Land Tax Criticised. "The Government's proposals as to land tax seem to have no regard to distinction between rural and urban lands. Of the latter it cannot be said, as the Minister implies, that they are held in many cases for speculative profits rather than for production. All this land is put to full commercial use. To impose upon such companies the burden of a graduated land tax, in addition to the increased income tax, will .seriously handicap present business and stifle expansion and extension. In some cases it may be that the land tax will be indirectly passed on to the general public, and thus swell the rising tide of the cost of living. In other cases it will turn reasonable commercial profits into losses.

"The statement is couched in optimistic terms . and appears to be based upon', the - belief, that . the policy -of the -Government ■'■is the main factor governing the'- prosperity of the Dominion. Little count appears to be taken of the fact that the capacity of the country to find the money to. pay for the proposals the Budget is chiefly... dependent upon the amount of British"' in exchange for our ' principals At the present. -tijpethis couifti'yr is; benefiting from the.: Very;tea'vy expenditure of Great Britafoi jipon rearmament, which has greatly -jlie purchasing power pf the" working people of Britain and stimulated the demand for our wool, meat, butter and cheese. Our present prosperity may therefore be but transient, and care should be'taken to conserve our resources against time of need. The Government has adopted the opposite,policy. ; Not a Guaranteed Price. •"The ■ Associated Chambers ' lias on previous occasions stated its objections to the principle of guaranteed prices, and would point out that what the Cabinet lias .done is not to guarantee prices but- compulsorily to appropriate dairy produce at a fixed price. , Q?his; is even more objectionable. The asso-: ciation does not consider that any prifce's fixed by the Government would give satisfaction to the producers and at the same time preserve the general community from loss.

"It is noted with concern that votes to Government departments arc to be increased by close on £5,000,000 above the previous year. In addition, approximately £10,450,000 is to be devoted to public , works; of this latter sum, £5,940,000 will be provided out :of borrowed moneys and the balance from revenue. In view of the Minister's statement that the moneys required for this financial year for the expanded programme of public works are available without any loan issue to the public, we assume that tiie money is to be obtained by the issue of Treasury bills. How and when does the Minister propose eventually to repay these bills? Is this the first step on the road to inflation ?"