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Economy Waits On E.E.C. Position

(New Zealand Press Association)

WELLINGTON, June 25.

The time for Budget “handouts” would be after Britain’s position concerning entry to the Common Market was known, the Minister of Finance (Mr Muldoon) said on national television last night.

Interviewed in the N.Z.B.C. “Gallery” programme, Mr Muldoon was asked why there were no “handouts” in the Budget in view of the improved balance of payments.

“We have a potentially inflationary situation, and we must keep the strongest, healthiest economy possible until we find out about Britain going into the E.E.C.,” the Minister said. “The time for handouts will be after we know, certainly not this year.” Asked what the Budget would do about rising prices, Mr Muldoon said the main effect of the total of revenue

and expenditure would be to dampen down the economy, and take pressure off wages and prices. More Cars “Bringing in more cars will mop up excess purchasing power,” he said. More would be taken into Government loans from financial institutions, and by means of the payroll tax. The payroll tax was preferred to sales tax because it spread the total amount of indirect tax more thinly. Some of it would be absorbed, and to this extent would not put prices up.

Questioned on the need for more immigration. Mr Muldoon said that 1600 people had responded after the recent policy changes, and

there was no point making further moves at this time. Saving Incentive

Asked whether the ordinary person had any real incentives to save Mr Muldoon said people on lower incomes had the bonus bonds scheme which was proving very successful.

The Opposition finance spokesman, Mr R. J. Tizard. said on the programme that reduction in Income tax at all levels was required. Labour would not have “given away” land taxes on property. “There is nothing in the Budget to touch prices or cure inflation,” he said. “There is a switch from private spending to Government spending, but unless the Minister is going to put something away in a sock and have a big surplus, it will not have much effect on inflation." Sales Tax The payroll tax would increase prices, although perhaps more slowly than a direct sales tax.

“This Budget will only add to costs for the wage-earner,” Mr Tizard said. “It could have been used to restructure the tax system. The concessions should have gone to the direct producers of income.”

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Permanent link to this item

https://paperspast.natlib.govt.nz/newspapers/CHP19700626.2.102

Bibliographic details

Press, Issue 32333, 26 June 1970, Page 14

Word Count
404

Economy Waits On E.E.C. Position Press, Issue 32333, 26 June 1970, Page 14

Economy Waits On E.E.C. Position Press, Issue 32333, 26 June 1970, Page 14