LOWER-BRACKET INCOMES Tax Relief Promised By Labour Party

Press, Volume CIX, Issue 32078, 28 August 1969, Page 18

LOWER-BRACKET INCOMES Tax Relief Promised By Labour Party

(New Zealand Press Association)

WELLINGTON, August 27. A Labour Government would ensure that people on low incomes received taxation relief, said Mr P. A. Amos (Lab., Manurewa) during the resumed second reading debate of the Land and Income Tax (Annual) Bill, in Parliament tonight.

The present incidence of taxation, together with the erosion of purchasing power under the National Government, meant salary and wageearners were in a worse position than in l%o— last year of the second Labour Government, Mr Amos said. “The only effective way of giving taxation relief to those on low incomes is to raise the exemption and this a Labour Government would do ” Mr Amos said that people on lower incomes were paying more individual taxation as well as a higher proportion of total taxation. It was obvious, he said, from statements made by Government members during the debate, that the National

Government if re-elected in November would move towards indirect taxation. “If this happens those on lower incomes will pay a greater share of the taxation burden." “OUT OF LINE” I The Minister of Finance (Mr Muldoon) said the state-j meat by Mr Amos was out of; line with what other Labour Party members had said. On July 20, the Labour spokesman on finance, Mr K. J. Tizard (Lab., Pakuranga) had said that under a Labour Government property tax was a possibility, and that capital gains tax was “almost certainly out.” “I hope the farming community noted what he said about property tax," Mr Muldoon said.

“And his statement on a capital gains tax is a definite softening of the Labour attitude. When the member for Island Bay (Mr A. H. Nordmeyer) was leader of the Labour Party, he said a capital gains tax definitely would not be introduced. Now it is only ‘almost certainly out’.” the leader of the Social Credit Political League. Mr

iV. F. Cracknell (Hobson) said that taxation as a percentage of gross national inicome was rising steadily. I It had increased from 26.2 iper cent in 1958 to 31 per cent in 1968, he said. The 'Government was virtually .'taking one-third of a person’s [income. I Total taxation a head of

J population bad also increased lan alarming amount in the | last 10 years. from $2lB to $370. : All taxation. Mr Cracknell said, ultimately went into 1 costs and was therefore a significant factor influencing the 1 country’s continuing inflation. I “NO SOLUTION” Mr A. J. Faulkner (Lab., Roskiil) accused Mr Crack- , nell of presenting a problem , but refraining from giving a ' solution or a constructive alternative to the Government's ' present policy. Asked by Government mem- 1

bers if he was defending National Party policy, Mr Faulkner replied that he was merely criticising Mr Cracknell. Earlier in the debate, Mr E. S. F. Holland (Nat., FenI dalton) had denied Labour 'claims that the National Government was helping only the; ' rich and ignoring the average Iman, and that it had done nothing to increase small savings. Mr Faulkner said he did not care who became wealthy, but he and the Labour Party believed that the people who produced the nation’s goods and services should get their just reward, and this was not happening under the present Government “STATE CONTROL” Mr H. E. L. Pickering (Nat., Rang!ora) said that the Labour Party was “lumbered” .with a policy of higher taxation.

' “They must have these 'taxes to implement their socialistic policies of State control and direction.” The National Government, he said, had achieved a higher standard of living for New Zealanders by incentives and its taxation policy. But Mr J. A. Wai ding (Lab., Palmerston North) said it was this very policy which was responsible for a large number of young people leaving the country. The chief Opposition Whip, I

Mr H. L. J. May (Porirua) said the Government had changed the basis of taxation so that people in the lower income brackets had to bear the burden of Mr Muldoon’s "mini-Budget” on May 4, 1967. The present bills did nothing to give these people relief. LOWER INTEREST Mr Muldoon said that the figures used by Mr Cracknell were misleading. In 1959-60 a more comparable year—• taxation as a percentage of gross national product was 26.3 and in the current year was only 24.9 per cent Labour speakers had criticised interest rates, he said, but New Zealand’s official borrowing rate had decreased marginally while world interest rates had gone sky-high. “We have kept the official Government borrowing rate

down to 5.5 per cent This compares with 9.385 per cent in Britain where they have a Labour Government,” he said. “Government economic policy has been successful," Mr Muldoon said. “We achieved a surplus in overseas funds and we maintained that surplus and reduced unemployment” The Land and Income Tax (Annual) Bill, and the Land and Income Tax Amendment Bill were given second readings.