STARTING SOON.

Auckland Star, Volume LXXI, Issue 152, 28 June 1940, Page 8

STARTING SOON.

NEW NATIONAL TAX

MR. NASH'S ANSWERS

EFFECT ON MODEST INCOME

EXCESS PROFITS DEMANDS.

(By Telegraph.—Parliamentary Reporter.

WELLINGTON, this day.

Several points in the Budget that are of immediate concern to the public, and about which many questions are being asked, were brought under the notice of the Minister of Finance, the Hon. W. Nash, in an interview to-day in order that they might be amplified.

Mr. Nash stated that the new national security tax of 1/ in the £ on income and wages will operate as far as current income is concerned as soon as the necessary legislation has passed the House. The form this legislation will take has not yet been determined, but it is possible that it will l>e contained in a finance bill. The Minister indicated that there will be a* little delay as possible in introducing the legislation.

As far as this new Wages Bill applies to unearned income, it will probably be based on a proportionate amount of the social security charge, paid during the current year, on last year's income.

Whether stamps will be used to designate the next tax is a detail that has yet to be determined.

Effect on Moderate Incomes. What the effect of this extra tax on the amount of a moderate income will be was referred to the Minister. He pointed out that it was proposed to amend the Social Security Act to meet cases of hardship. At the present time the family benefit of 4/ per child applied only to the second child where the income of the family was under £5 a week. It was intended to make it apply to the first child so that when a man had three children and his income was under £5 he would get a family benefit of 8/ a week, though he would, of course, have to pay his 5/ a week itational security charge.

The question of the operation o£ the proposed excess profits tax was also referred to the Minister.

Mr. Nash said that the complete procedure was being worked out, "and it was likely that the procedure adopted by the British Government recently would be followed. The original proposal in Britain for the taxation of excess profits during the war was to strike an average of profits for the previous three years and to take the percentage of the income in excess of that average. The British Government had decided to acquire by taxation the whole of the excess income and devote it to war purposes. It was probable that this would be the procedure favoured by the New Zealand Government.