Policy Of Govt “Totally Unfair”

Press, Volume CX, Issue 32382, 22 August 1970, Page 44

Policy Of Govt “Totally Unfair”

(N.Z. Press Association) NEW PLYMOUTH, , August 21. Government policy, as shown in the Budget, was totally unfair and “a blow below the belt,” said Mr L. B. Smith, general manager of the Farmers’ Co-operative Organisation Society of New Zealand, Ltd, in an address to the annual meeting at New Plymouth today.

“Since March 31,” said Mr Smith, “some important factors have arisen which are a matter of grave concern to management at all levels and to you as shareholders —the

Budget with the introduction of the payroll tax, the unprecedented increase in award rates of pay, and compulsion to invest’ 30 per cent of the funds of the private superannuation scheme in Government stock. "The budget in itself is disturbing to me, to the extent that the Government has adopted a policy of further taxing companies and institutions, who as such do not have a vote,” said Mr Smith. This was a very clever political manoeuvre, but one that was totally unfair, and therefore “a blow below the belt,” striking at the root of institutions which provide employment and essential services to the community, he said.

One aspect of the P.A.Y.E. taxation system had had the effect of the employer be-

coming the “big bad wolf” because of deduction of tax at source. “In the main, the employee looks only at his net or takehome pay,” said Mr Smith. “Whereas in the past the Inland Revenue Department got the stigma as the tax collector, now the reverse is the case. The employer is the unpaid tax collector and thus unwittingly receives the blame for the take-home pay packet. “Is this one of the causes of pressure for increase in award rates of pay?” Mr Smith asked. On the refund side, the Inland Revenue Department got all the credit and was now looked upon as “Father Christmas” at the end of the tax year, when refunds were received by the employee from the department

“Now we have the further imposition of the payroll tax,” said Mr Smith. “Taking the remuneration of employees at the figure ruling at March 31 last, this society would require a turnover increase to yield §51,346 to meet the payroll tax in order to obtain the same net result as at March 31 this year. “Because of escalation of award increases since that date, and with more, to come, we estimate that in the future for a 12-month period of trading with the increase in award rates plus the payroll tax on such increases the turnover of the society .would need to increase suf-

ficient to yield §365,000 just to hold the profit available, as shown in your balancesheet today. “It is a case of doing more

and more in order to stand still.” It seemed that the Government, by its policies or lack of them, was on a course likely to kill the goose which laid the golden egg—’and if this occurs then the jobs of all our people will be at stake through economic collapse,” said Mr Smith. “The wage-cost spiral is also seriously eroding the profit margin of farming, and will similarly have the disastrous result of the golden egg being reduced to the size and worth of a peanut,” he said. In other sectors of industry, said Mr Smith, there were signs of a clamour from primary producers and consumers the signs of a clamour for a return to co-operative-owned institutions.