The Press FRIDAY, NOVEMBER 15, 1963. Mr Nordmeyer’s Small Print

Press, Volume CII, Issue 30289, 15 November 1963, Page 14

The Press FRIDAY, NOVEMBER 15, 1963. Mr Nordmeyer’s Small Print

The Leader. of the Opposition (Mr Nordmeyer) has indignantly denied that he promised in 1957 that there would be no tax increases. The then leader of the Labour Party (Mr Nash), who did make that promise, qualified it with the proviso, * in normal circumstances ”, which appeared, as it were, like the fine print on the back of a different kind of policy. Is Mr Nordmeyer following that example with his own proviso that some or all of his party’s 1963 promises depend on an increase in national production sufficient to justify them? This is a curious kind of electioneering. A party should be prepared to stand behind the manifesto it issues to electors, or else why issue it? If it is not fairly confident of being able to perform meet of W'hat it lists categorically, why make specific promises? The proper place to make anj’ qualification clear is in the policy manifesto itself, not in verbal additions. Mr Nordmeyer’s proviso is particularly important in its application to the Labour policy on income tax. This policy, which chiefly benefits individuals on very high incomes, is not calculated to pul] the Labour dissidents of 1960 back into line. But its reduction of 2s 3d in the £1 in the rate on the higher brackets (worth about £ 400 a j’ear to a man receiving £4600) is so great in degree that it becomes almost a change in kind, suggesting a swing away from taxing incomes towards taxing expenditure. Some of the gap the huge reduction will leave in Treasury revenue is preaumably to be filled by higher maximum rates of

company tax; and the companies will certainly try to pass this on to consumers, making it, in effect, a concealed increase in indirect taxation. If Labour really contemplates such a fundamental change in the taxation system, it should riot nullify its intention by a flat escape clause of doubtful relevance. It is not something that depends on greater production. While social services take so large a part of the national income and so large a proportion (8s in the £1) of tax revenues, New Zealand Governments have little scope for tax reductions. Nevertheless in a developing country reasonably prudent administration can profit from the economies of larger scale; and it is this factor that has enabled the National Party to reduce some rates of taxation in 10 of the 11 years it has been in office and to make a modest promise to continue this policy. The Labour Party has consistently, if that is the word, followed a different course, making spectacular reductions in taxation on rare occasions and spectacular increases on others. In the tax reduction promised on higher incomes this year it may only be running true to form, for no foreseeable increase in production will provide the Government with the increased revenue it will need at the lower rates. It might, however, be a different matter if the intention is to establish a new basis for collecting revenue. Some further explanation should be given by Mr Nordmeyer of his policy proviso generally, and of its application to income tax in particular.