TAXATION.

Press, Volume LXV, Issue 19611, 6 May 1929, Page 10

TAXATION.

ADJUSTMENT ESSENTIAL. PRIME MINISTER'S STATEMENT. (raass associatiox txugeah.) HAWERA, May 4. The crowd of about 1000, which packed to overflowing the Winter Show Hal] at Hawera, accorded a rousing reception to Sir Joseph Ward a£ the civic welcome given him this evening. The speakers were the Mayor (Mr K A. Pacey), Messrs H. G. Dickie, M.P., R. Masters, J. B. Murdoch (chairman of the Hawera County Council), and W. Morrison (chairman of the Waitotara County Council). In reply, Sir Joseph Ward touched on political questions, paying particular attention to the Budget and the Railways. He referred to the recent announcement that the financial statement for the year just ended would be about £579.000 short of the amount required to balance the ledger. "That," he said, "is not sufficiently large to cause any -serious alarm regarding property or business, but it is big enough to indicate that the conditions giving rise to it cannot be allowed to continue. We must square the yards and I hope to be able to place before Parliament in the coming se&sion proposals which will bring about the reniedv."

There would have to be an adjustment of taxation, it being essential to secure more revenue than had formerly accrued from certain quarters. No country could claim it was in a satisfactory oondition when the financial balance was on the wrong side, and I an adjustment of the Dominion finances was the mission oa which he was at present engaged. Customs tax- '< ation was between £300,000 and £400,000, and income tax between £60,000 and £70,000 short. Ab a primary producing country, New Kealand was boundto look principally to the land for its prosperity, and in the small holding settlement scheme, together with the careful regulation of immigration, lay the solution of the unemploy. ment problem. The Government had stated that it would go ahead with work on long railways, but it would not consent to expenditure on short lengths, which he contended could not hope to compete with motor services. On such lines as the Taranaki to Auckland, Napier to Gisborne, South Island Main Trunk, and Westport to Nelson, the Government wa* prepared to incur expenditure as would pay interest on expenditure. Side by aide with land settlement the Government wanted to complete the long distance . railways, but would stop for ever the short fragmentary line* which were a burden on a country. Last year the iosse*. on the smaller lines were £770,000. This was a direct charge against the Consolidated Fund, and had been largely responsible for the Budget deficit. But for that charge there would not have been a deficit. During the next session he proposed to ask Parliament to adjust the system of railway accounts so a* to do away with that system. The stoppage of the Palmerston North deviation wa* one direction in _ which the Government was endeavouring to check, unnecessary expenditure, but the amonnt involved was trivial in comparison with the toss on small lines. The Palmerston North deviation was stopped because the Government believed it was not wanted. The Government would also stop any other work concerning which a similar conviction was held. He and his colleagues believed that the RotoruaTaupo line should never have been started. The policy of the Government was that it would not undertake any railway work which would not return at least interest on the capital outlay. "Millions and millions and millions are being borrowed every year," said Sir Joseph, again referring to finance. "Million* and million* and millions are being expended every year, and some of it is being thrown away every year. What we have got to do now is to ask the member* of Parliament to share with us the responsibility of focussing and limiting the expenditure of these million* that are not required, at the same time pushing the country on at a reasonable speed, yet keeping the safety valve on." Referring to the 84 miles of line refuired to link the Bouth Island Main runk railway to Picton, Sir Joseph said it would allow a saving of 6| hours on through passages from the extremities of both Island*, a* more direct connexion would be afforded in crossing Cook Strait he believed the completion of the line to Picton with its facilities for through traffic would prove in the beat interests of the country just as through services between the principal centres in the North Island hau been.