Budget Good In Parts -Mr Nordmeyer
Mr Muldoon’s Budget, like the curate’s egg, was good in parts, a former Minister of Finance—Mr A. H. Nordmeyer—said last evening. Mr Nordmeyer approved the payroll tax but said that the fiscal measures would fall unevenly on the community.
Farming incentives, he! said, should have been designed to divert production away from the dairying field.
The monetary measures announced by Mr Muldoon had been' necessary to meet the rapidly worsening inflationary pressures on the economy, Mr Nordmeyer said from Wellington in a telephone interview with “The Press." The effects could not be accurately assessed at this stage, but it appeared that some persons would enjoy substantial income tax concessions while others would have to bear a heavier burden because of the decision to treat income from dividends (with some exceptions) as ordinary income. Mr Nordmeyer said New Zealand was particularly hard on the middle-income group of taxpayer, and he thought it would have been better to give a smaller reduction to the top-income group and bring more relief to the middle section. While he was rather surprised that Mr Muldoon had introduced it, Mr Nordmeyer said the payroll tax was a
Igood measure to damp down the economy and relieve the imbalance caused by the shortage of manpower. He thought the tax would help to direct labour into more productive areas, and tend to make manufacturers look round for more modern machinery to replace man power.
The farmers had been particularly well treated, Mr Nordmeyer said. If these comprehensive concessions caused or contributed to higher land prices, they would be of doubtful value in the long term. The land tax change, he said, would be of great value to the very large holders of farmland, but not to anyone else. And he was strongly critical of the lack of discrimination in granting farming concessions.
“Here we are.” said Mr Nordmeyer, "dishing out concessions to all farmers. Is it of any advantage to ask the
[dairy farmer to increase production when his products are already a glut on' the market? The Minister should have concentrated on concessions which would have given incentives toward other forms of farming.” A former chairman of the Monetary and Economic Council (Dr G. B. Battersby): The Budget ensured that the Government would have access to the savings required to finance public sector capital expenditure, but the removal of dividend tax would make it more difficult for companies in the private sector to attract funds. It would produce many anomolies, particularly for private companies. The effect of the change seemed to conflict with the need to increase the finance available to the private sector to meet the National Development Conference targets. A move of this kind should have been accompanied by a reduction in company taxation.
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Bibliographic details
Press, Issue 32333, 26 June 1970, Page 1
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465Budget Good In Parts -Mr Nordmeyer Press, Issue 32333, 26 June 1970, Page 1
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