PARLIAMENT Mr Watts Seeks Reason For Higher Taxation

Press, Volume XCVII, Issue 28700, 25 September 1958, Page 14

PARLIAMENT Mr Watts Seeks Reason For Higher Taxation

(New Zealand Press Association) WELLINGTON, September 24. The Government had never fully explained its reasons for the great taxation increases announced on Budget night, said Mr J. T. Watts (Opposition, Fendalton) during the third reading debate on the Customs Act Amendment Bill in the House of Representatives today.

The bill increases taxes on beer, spirits, tobacco, cigarettes and petrol.

“I have never clearly understood the reasons for these savage increases,” said Mr Watts. “Does the Government want to reduce consumption, create a surplus, or save overseas funds? It seems a pretty tough way of doing so by putting the cost of petrol out of the reach of the ordinary man.”

The taxation would have an adverse effect on the hotel industry and also on the internal tourist industry, he said. People would pay more for their beer and also in hotel tariffs when they went on their annual holidays The Minister of Customs (Mr Boord) had said the situation was going to improve, but did this mean people were going to start drinking beer in larger quantities? If so. was this a good thing? "This is a body blow to the tourist industry,” said Mr Watts. A new tourist hotel in Auckland had been “pretty close,” but he thought the plan would be abandoned now. Also, there were many hotels in the important Auckland area which needed renovation This would be delayed and the small country hotel particularly would suffer.

“From every way it is looked at, I see trouble,” said Mr Watts Supporting Mr Watts. Mr R. M. Algie (Opposition, Remuera) said the taxes were not wanted by the public. They were not for revenue purposes, but to fill up the gap that the Government had itself created by its income tax rebate.

Explaining to Mr Algie why motor-cycles had been exempted from increased sales tax, Mr Boord said not much revenue was

involved and motor-cycles were not large users of petrol Today, the danger the country faced was not inflation, but that of deflation and unemployment, said Mr Boord. The money supply at the present time was less than at this time last year. No tax was ever popular, but the money was needed to offset lower revenue from income tax and Customs duties, higher interest charges, additional health and education expenditure, and “£5 million plus” for the farmers. The taxation was designed to save overseas funds and provide money for the running of the country. Mr Boord said earlier remarks about improvement which he had made had referred to tobacco and cigarette consumption. There had been heavy advance buying of these items, but consumption would rise, again r ‘in a week or two ’* The taxation was required not only this year, but also in the years that lay ahead, he said. The Opposition had consistently voted against every taxation measure that the Government had proposed, but it had not offered any alternative as a responsible Opoosition should have done. The bill was read a third time on the voices and passed.