TAX REDUCTIONS CONTROVERSY

Press, Volume XCIX, Issue 29246, 2 July 1960, Page 12

TAX REDUCTIONS CONTROVERSY

Auditor-General Admits Error In Report

(From Out Own Reporter? WELLINGTON, July 1. . The Auditor General (Mr A. D. Bums) tonight admitted that his report, which was presented to Parliament last Friday, may have been incorrect. Statements made in the which formed the major debate topic in the House of Representatives this week, were not strictly correct, he said. He had decided this after hearing from the deputy Leader of the Opposition (Mr J. R. Marshall). Until he conferred with Mr Marshall, be had been under the impression that the present Government had been the first one to use the Customs Amendment Act, 1921, to bring about general taxation reductions. He did not now believe that. It now seemed that the National Government had used it in 1951 for similar purposes.

Mr Burns said these were purposes for which the act was not intended, and which, according to lis report, do not on ' with the general principle that Parliament, an 4 Parliament alone, has the right to impose taxation or to reduce it. Mr Burns said he now believed that the National, Government in 1951 had used section 12 of the act for general taxation changes. He believed this had been to reduce the price of petrol—a move on which his report challenges strongly similar Labour Government action last year. The Opposition sought to move an adjournment of the House of Representatives last week to debate the matter. The motion failed.

On Wednesday night, the Minister of Customs (Mr Boord) accused the Opposition of doing the very same thing when it was in power, for which it was now attacking the Government. Tonight. Mr Bums said he

now believed this to be so., He had not had time to check. His annual report said: “It would ppear . that the ' section was intended to operate only in special circumstances and not to enable general reductions in taxation. As far as the Audit Office is aware, this is the first instance where the 1921 legislation has been so used”

Mr Burns said ’ tonight that the act had been used previously to protect and help local industry, which was its intention.

It had been used to help apple and cement industries and to cut the price of tea. "That is all right and innocuous.” Mr Burns said. “Even on tea the tax take is negligible and is hardly a general tax reduction. The act had not been used to make general tax reductions until 1951. While a cut in Customs tax on tea could not be described as a general tax reduction, one on petrol could be.”