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Company Effect

The president of the Associated Chambers of Commerce (Mr A. R. Simm): The payroll tax seems to be a raid on company profits. The business concerns which will suffer most are those on low-pro-fit margins, and these were the concerns the Government might have been expected to encourage.

The president of the Canterbury Chamber of Commerce (Mr J. M. Tocker): The new payroll tax and higher dividend taxes are being used to prop up the farmer at a time when he needs it and the country needs him. The payroll tax can hardly avoid increasing prices in many fields. The higher dividend tax will strongly discourage private companies through the effective maximum tax rate of 75 per cent on company income paid to shareholders, compared with the maximum of 50 per cent on the income of individuals.

The president of the Manufacturers’ Federation (Mr J.

S. Osborne): Manufacturers were agreed that measures had to be taken for some restraint in the economy. We recognise the Budget as a courageous effort in restructuring the tax system. However, the payroll tax will have uneven effects on manufacturing and these will be serious for the more labour-intensive industries. An aspect of the Budget which seriously concerns us is the $134 million increase in Government expenditure. Mr J. D. Bull, president, Canterbury Manufacturers' Association: I think this is a terrible Budget. If farmers are given an incentive to use motor-cycles on their farms, why not a taxation exemption on pedal cars used to and from kindergarten? Seriously, this is an ineffective and complacent Budget. While the investment allowance has been restored, it is still only half that offered to Australian manufacturers, and the export incentives are also less than those enjoyed by Australians.

The secretary of the Employers’ Federation (Mr P. J. Luxford): The payroll tax I would undoubtedly affect ; employers, especially in the (more labour-intensive indus- ! tries such as the service j industries. It would ease the (labour shortage by acceleratI ing the trend towards the . installation of labour saving equipment. Mr A. F. Crothall. president Canterbury Employers’ Association: All employers would be dismayed at the payroll tax, which was a disincentive. Labour-intensive companies would be hit the hardest, but . very few would escape the penalty. The tax would affect employers’ reactions to wage demands, as whatever was given would carry a 2 per cent premium. Obviously the Government was leaving it to the employers to carry the burden of damping down wage demands. (Professor Philpott: Leader Page)

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Permanent link to this item

https://paperspast.natlib.govt.nz/newspapers/CHP19700626.2.17

Bibliographic details

Press, Issue 32333, 26 June 1970, Page 1

Word Count
417

Company Effect Press, Issue 32333, 26 June 1970, Page 1

Company Effect Press, Issue 32333, 26 June 1970, Page 1