Call For Less Direct Tax

Press, Volume CVI, Issue 31335, 4 April 1967, Page 20

Call For Less Direct Tax

Demands by the Federation of Labour for greater emphasis on direct taxation based on scales of income were contrary to the best economic opinion in the world, said Sir Matthew Oram, president of the Constitutional Society, in a statement Successive Ministers of Finance in New Zealand had spoken In favour of a movement towards more Indirect taxation and in many other countries the principle had been widely adopted, said Sir Matthew Oram. Even Britain's Labour Chancellor of the Exchequer had within the last few days announced plans to switch from direct to indirect taxation over the next four years as the main source of revenue.

New Zealand had long had an unenviable reputation for having one of the highest ratio of direct taxation in the world and the position had deteriorated recently until indirect taxation accounted

for less than 30 per eent of the total collection, he said. “At a time when the Government is trying to dampen down consumer demand and to increase production, it would be folly to increase the proportion of direct taxation," said Sir Matthew Oram. “Our present system notoriously encourages spending and discourages production.

“We have always maintained that taxation can be fashioned into a scientific instrument for the development of a sound economy. We do not advocate drastic overnight changes which could create hardships for certain sections of the community. However, we urge the Government to stop the drift in the wrong direction and to start using taxation to arrest the recent spending spree and to give incentives for greater production. This would do much to correct our economic problems,” he said.