Government Attacked On Taxation Policy

Press, Volume CVI, Issue 31154, 2 September 1966, Page 3

Government Attacked On Taxation Policy

(New Zealand Press Association)

WELLINGTON, Sept. 1.

The Government was accused by

Mr R. J. Tizard

(Opp.,

Pakuranga) in Parliament today of “running away” from taking measures to restore a balance in the economy.

He said the Government had made no provision to take fiscal measures this year and claimed that the establishment of the committee to review taxation was only a step to defer as far as possible any prospect of taxation adjustments.

Instead of lowering taxation rates, as promised, the Government had shifted the burden of taxation from the shoulders of those best able to pay to the shoulders of those on lower incomes, said Mr Tizard.

He said the Prime Minister (Mr Holyoake) had stated in 1960 that the Government was taking too much of the people’s earnings. He added that the Government had promised to reduce the rates of taxation. “Ever since then it has taken more,” he said. Mr Tizard was speaking during the second reading debate on the Land and Income Tax (Annual) Bill, which sets the rates of land tax, income tax, social security tax, excess retention tax and bonus issue tax. He said that the “man on top” with a greater income was still paying the maximum rates of taxation, but many people on lower incomes were now paying substantial rates of taxation, although they were earning only enough to keep pace with the rising cost of living. Mr Tizard claimed that the Government “under this bill and its general policy is avoiding the consequences until after November. “It is trying to give the impression that all is right,” he said. Veiled Threat The Under-Secretary to the Minister of Industries and Commerce (Mr Adams-Schnei-der) retorted that all the Opposition member had managed to get over was “some sort of veiled threat” that the incidence of taxation would be changed by a Labour Government. He said the only implication that could be drawn from Mr

Tizard’s statement was that [the Labour Party would in- [ creaSe taxation if they got into office. The increases in Government expenditure were being financed this year without any increase in the rate of taxation, he said. Even though there had been increased expenditure on defence, on pro- , duction incentives and public ; works, there had been no ’ extra taxes levied. Mr Adams-Schneider said 1 that the total amount of tax- . ation must increase with in- ( creases in population and productivity. i Mr S. A. Whitehead (Opp., ! Nelson) said that no taxpayer i in the country would be com- ’ forted by Mr Adams-Schnei- ) der’s speech. ’ “We are now at the end of ' six years of this National ’ Government—six years in t which each year the Government has gathered more in : taxation from the people of 1 this country.” 1 Minister Blamed • “I am putting the blame ’ on the Minister of Finance (Mr Lake) and the National Government. The working people are not in a position to pay more income tax,” he • said.

Every person who wanted to build a home would have to pay more because of the actions of the. Minister of Finance, he said. Next year electricity charges would go up because of provisions made by the Government. The Parliamentary Undersecretary to the Minister of Finance (Mr Muldoon) said

that during every estimates debate this year the Labour Party had demanded increased expenditure. He claimed the Opposition’s call for fiscal measures would involve just the “cut, slash and chop” by way of increased taxation which the Opposition had used “last time.” Mr M. A. Connelly (Opp.. Riccarton) claimed that there was a rumour that the Government. if re-elected, would immediately introduce a supplementary budget to increase taxation. Mr H..J. Walker (Govt., St. Albans) said more tax was today being collected through direct taxation than before — but the people were more prosperous than ever before, and rates of taxation had not been increased. No Incentive Mr A. J. Faulkner (Opp., Roskill) said that nowhere in the bill was there any incentive or any reward for the farmers to attempt to do what the Government wanted them to do and what the country needed them to do. All The farmer would get from this legislation was a bigger tax bill. He asked the Minister of Finance if he would give an assurance that he would not increase taxation. Mr Faulkner claimed that the farmers would not benefit from Government policy on land tax. It was the big land investors who would benefit. Being Taxed Less Mr W. W. Freer (Opp., Mount Albert) said the Labour Party believed that people in the higher income bracket were being taxed comparatively less today than they were a few years ago.

“Why is it that the National Party believes that

incentives have only to be given to the higher income people and not to the wageearners?” he asked. Mr Freer said there was no provision for a taxation reduction in the bill and there would not be a reduction. Mr J, R. Harrison (Govt., Hawke's Bay) said it would be irresponsible for the Government to reduce substantially taxation at the present time. It was the intention of the : Government to use methods of taxation to stimulate pro ! duction. “1 feel confident that we can look forward in the future to more reductions in taxation as further incentives to increased production.” “Like Circus” The Minister of Finance, in reply, said it appeared that the Opposition’s purpose in staging a debate today was purely a political one. “We’ve had almost a cir- . cus performance,” he said. The “second eleven of the Labour Party” was trying to tell Parliament and the country that the Government had not reduced rates of taxation in the years it had been in office. Many members were interrupted by the Speaker (Sir Ronald Algie) for introducing irrelevant argument, Mr Lake pointed out. The debate was interrupted for the adjournment debate.