Constitutional Soc. Wants Tax Change

Press, Volume CV, Issue 31042, 23 April 1966, Page 20

Constitutional Soc. Wants Tax Change

Sir Matthew Oram, president of the Constitutional Society and a former Speaker of the House of Representatives, favours a complete review of the taxation system and a switch from taxation on production to taxation on spending.

He attended a private meeting of the Christchurch branch of the society on Thursday evening to discuss the future policy of the national body. Sir Matthew Oram said the Constitutional Society wanted the whole system of taxation reviewed. “The proportion of direct taxation is too high,” he said. “New Zealand is among the three highest in the world. “Production and expansion is what this country needs, and the emphasis of taxation should be on spending rather than on production.”

Asked if this would not place a greater burden on the wage-earner, Sir Matthew Oram said that if the switch was made from production taxation to spending taxation, there would be increased production and the spender would get more. “The whole country would benefit,” he said.

The Constitutional Society was also pressing for the removal of the excess profits retention tax from private companies, to put them in the same position as public companies. Private companies needed their extra profits for development, he said, but at present they had to either pay them out in dividends or pay the retention tax.

Death duties should also be abolished. They provided only a small proportion of total taxation, and their abolition would be the boost to production that primary industry needed.

“Farmers need an incentive that they can understand and appreciate,” he said, “and no single action would give greater impetus to increased primary production than the abolition of death duties.

Attracting Capital

“It would have the side effect of attracting capital to New Zealand—capital which is needed for general expansion and increased production.”

Sir Matthew Oram said he agreed wholeheartedly with the view expressed in a leading article in “The Press” on Tuesday that both the legal and accountancy professions should strive for simplification of the tax structure.

“Taxation should be simple and able to be understood,” he said. “An examination of the whole question is desirable, and there is no question that it is very desirable to have simpler tax laws so that the principles and mechanics of assessment can be simplified. They should be made perfectly clear and easily understood."