£10,000,000

Auckland Star, Volume LXXII, Issue 138, 13 June 1941, Page 3

£10,000,000

FOR RESERVE BANK

TAXATION CRITICISM

IO.CO WELLINGTON, this day. Criticism of the country's heavy burden of taxation was levelled at the Government by Mr. Lee (Democratic Labour, Grey Lynn) in the House of Representatives yesterday during the debate on the Imprest Supply Bill. He drew atteotion to the reduction of the Reserve Bank overdraft by £10,000.000 and contended that the policy being pursued was deflationary. Since September of last vear the £10.000,000 had been paid off. When the taxation screw was turned hard last year and taxation was levied on a lower level of income than anywhere else in the Empire the country was led to believe that the money was required to equip the army and to sustain the war effort.

A heavy burden was placed on the manufacturing industry at a time when the industry was being called upon to expand, continued Mr. Lee. Far too much was being taken from homes that required food, while food was being placed in stores and possibly would be turned into fertiliser. The war was being used to reduce the country's indebtedness. The State had taken not only the money that was necessary for administering the Dominion, but £10,000.000 in addition. "Why this staggering weight of taxation imposed on the lower incomes?" he asked. New Zealand had engaged in a deflationary procedure to an extent unparalleled in any other part of the Empire and taxation was imposed to an extent also unparalleled the Empire over.

Mr. Dickie (National, Patea): Don't you believe in paying off debts?

Mr. Lee: Not £10,000.000 of overdraft at the expense of women and children who are not getting sufficient to pay for food that is reduntant. There is no inflation in giving the people an abundance of the food produced in this country. Mr. Xash Replies

Replying to Mr. Lee. the actingPrime Minister, Mr. Nash, said that the Reserve Bank balance usually went down because it was the policy of the Government to take money to pay the accounts of the country and when money was available* from taxation at the end of the financial year the bank was repaid. In other words the State had an overdraft at the Reserve Bank and that overdraft had been as high as £23,000,000.

Mr. Nash said there was £4.500.000 in sterling due to the United Kingdom for outfitting New Zealand troops and that had not been paid yet. The Government could only pay it by taking it from the people and by refraining from purchasing goods from overseas. The original arrangement was that Britain should equip our soldiers and the money was to be repaid in a year. There was now no limit for repayment and only £1.600,000 had been repaid. He would pay it tomorrow if he could do so without causing hardship in New Zealand. The United Kingdom was carrving a sufficient load without asking that part of ours should be carried also.