PARKIN SON'S SECOND LAW

Press, Volume XCIX, Issue 29264, 23 July 1960, Page 3

PARKIN SON'S SECOND LAW

[Reinewed bu N. L. M.l The Law And The Profits. By C. Northcote Parkinson. John Murray. 185 p.p. One worker in every six in New Zealand is employed by the State or by a local body. These organs of government absorb in taxes and rates one-third of the product of our labour. Those statistics suggest the need for local study of the applications of Parkinson's Laws. The first of these, enunciated two years ago, is now famous: “Work expands so as to fill the time available for its completion.” The second law, “like the first, is a matter of everyday experience, manifest as soon as it is stated, as obvious as it is simple; Expenditure rises to meet income.” professor Parkinson’s first illustration of his second law will be familiar to all wage and salary earners: the salary earner still finds himself barely in credit--“and often in fact with a deficit which has actually increased” — after a rise in salary. So it is with .Government departments, Professor Parkinson argues. War-time calls for selfsacrifice persuade the taxpayer to accept higher taxes, but war-time increases in taxes are never followed by commensurate reductions when the emergency has passed. Tax levels rise, in a 'succession of plateaux. Can this progression be maintained indefinitely? What forces can arrest it? The New Zealand reader will find no comfort in Professor Parkinson’s answers.

•‘With peacetime taxation amounting to over 10 per cent of the national income, capital, will begin to migrate,” he says. “If its flight is prevented, whether by circumstances or by legislation, taxes can rise to 20 per cent, but against a stiffening opposition which takes the form of tax avoidance and evasion carried to the utmost lengths of determination and

skill." New Zealand's rate of taxation (including rates and licence fees levied by local bodies) has varied between 30 per cent (“obvious decline in national influence > and 35 per cent (“visible decline in freedom and stability' > of national income in recent years. Do these descriptions fit New Zea-

land? It so, the country is not far from “disaster, complete and final, although not always immediate,” reached at 36 per cent Countries which have recently exceeded the bounds of safety are listed by Professor Parkinson. They are, “in order of extravagance,” the United Kingdom, France New Zealand, Japan and the United States. If more recent or more complete figures had been available to Professor Parkinson he might have placed New Zealand higher on his list

“The Law and the Profits” has several fine chapters, which will stand comparison with any in “Parkinson’s Law.” The chapter

on “The Avoidance of Tax,” for instance, contains this observation: “ . . . income is subject to tax and capital subject to death duties. It is therefore the object of the tax avoider to have no income (but merely capital) while he lives, no capital (but merely income) when he dies. The tax collector’s point of view is exactly the opposite.” There are, inevitably, chapters which pander to the publisher’s wish to present a book of booklike length. It is scarcely to be wondered at, however, that a second book from the same pen should seem to fall short of the standard of “Parkinson’s Law.”

I take notice of the fact that when you have got people with a belief that you might think is an obsession, you have to disregard the fact that a certain amount of nonsense may be talked about it — Mr Justice Davies.