PERSONAL TAX REBATE Minister not as confident

Press, Volume CXI, Issue 32539, 24 February 1971, Page 1

PERSONAL TAX REBATE Minister not as confident

(New Zealand Press Association)

AUCKLAND, February 23.

He still hoped to remove the 10 per cent personal tax surcharge in July—the date he had promised when imposing the tax last year—the Minister of Finance (Mr Muldoon) said today, but he was “not as confident” about this as he had been last year.

Mr Muldoon made these remarks during a luncheon address given to the Auckland Creditmen’s Club. Whether the tax came off depended on the state of the economy at the time, he said.

Mr Muldoon said that] the Government’s objective was to restore a reasonable rate of growth to the economy, and to restrict inflation.

The proposed wages-ceil-fng legislation was aimed at reducing the wages growth from 15 per cent last year to 7 per cent in the coming financial year. He said that the Government had been “very patient”

jin trying to bring employers and unions together to discuss spiralling wages. Mr Muldoon said that cuts were coming in the amount of money spent on public works. He mentioned as one of his problems “that terrible headache of Government spending.” "Government spending is going to be up by 15 per cent for the year that is now ending,” he said. One factor that helped bring about this percentage was the dry summer which had enabled works to forge ahead in many cases. Wage increases There were also wage increases for the 210.000 people who received their pay from the Government; and, in addition, special increases in education with teachers getting “very good” wage increases. He thought that many people tvould agree that the teachers should have the increase. “Now you and I have got to pay for it,” Mr Muldoon said. He was going to try to hold Government spending ip the coming financial year to 4 per cent plus normal cost increases. “I will also be sitting down with the Minister of Works, shortly, going through the works programme to see where we can wield the axe,” he said. The cuts in spending would not mean that projects would not be carried on, simply that they would be delayed. “We have got to hold Government spending.” He said that the Government would have a reply to the Federated Farmers' scheme for a sloom assistance plan to farmers “in time for the Budget.”

“We are analysing it and looking at it seriously,” he said. It was remarkable that Federated Farmers had not studied the effects the plan would have on the country’s economy or its over-all effect on farming. “If w agreed to it as it is, there would be a lot of loose money around in the hands of the farmers. “It couldn’t all be used up in farm development—or in restocking.” Not much attention had been paid, either, to where the money would come from, said the Minister.

Tax sources Illustrating briefly what the impact of raising another sloom could be, Mr Muldoon said that a payroll tax of 8 per cent would do the job on its own.

A 15 per cent surcharge on personal incomes would achieve the same result, or perhaps the bill could be spread further on commodity taxes.