The Press TUESDAY, JUNE 16, 1959. Mr Nash and the Taxpayer

Press, Volume XCVIII, Issue 28922, 16 June 1959, Page 14

The Press TUESDAY, JUNE 16, 1959. Mr Nash and the Taxpayer

ixpayers should probably not xtake too much to heart the recent comments on taxation by the Prime Minister (Mr Nash).

• They were made during his address .supporting the latest '■Governfhent were part ofkis explanation why remarks 2 by the Minister of Finance (Mr .. Nordmeyer) should not be taken as a taxing threat. This turned —out, as Mr Nash put it, not to be a threat at all but a matter of simple arithmetic. In drawing this fine distinction, Mr Nash •was moved to shy something about the social value of taxation. In his view, it seems, last year’s heavy taxes (“a little more taxation ”) prevented business stagnation, unemployment. and “ lowered purchasing “ power for the necessaries of v “ life ”. We had always believed the Government’s justification was rather different—that heavy - taxing was to reduce internal spending power and thus de- > mand for goods that our overseas income could not fully pro- . vide, a demand stimulated by Labour’s quite contrary election policy. Few New Zealanders will believe that their purchasing power was maintained last year by the Government’s taking a larger slice, except those who . might have profited on balance from the large increase in the family allowance* Businessmen who saw their turnover reduced and men who lost their jobs will not feel that high taxation protected everyone. In fact, the best thing that can be said about last

year’s Budget was that, surprisingly, its imposts did not prove quite insupportable. If the economy had, indeed, suffered

from the “ economic stress or “ stagnation ”, to which Mr Nash referred, the way to relief was lower, not higher, taxation. The diagnosis was, of course, different, and so was the prescription —too drastically different, as it turned out. Mr Nash was back on more familiar ground when he ascribed positive virtues to taxation. Tax collections, he said, were not destroyed, or wasted,

or made idle. Mr Nash could surely not have meant that if the extra amount collected last year had been left with the taxpayers it would have been destroyed or left idle. New Zealanders are not, by nature, hoarders who keep their money in an old sock in the garden.

They either spend it freely or invest it, thereby providing someone else’s income or someone else’s capital. Mr Nord-

meyer’s complaint about the falling off in small savings is evidence of another view of New Zealanders. But “ wasted ”? That perhaps was what Mr Nash was really talking about. Taxpayers sometimes spend their money on things of which he does not approve. It is only a few years ago that Mr Nash was suggesting that he could spend the taxpayers’ money better than they could spend it themselves. Now he is repeating himself.