‘Rapacious Budget' says Mr Muldoon

Press, Volume CXIII, Issue 33252, 15 June 1973, Page 2

‘Rapacious Budget ' says Mr Muldoon

(New Zealand Press Association) WELLINGTON, June 14. “Mr Rowling has now taken over from me, in six months, as the most rapacious tax gatherer that this country has ever seen.” This was one of the first comments made by the former Minister of Finance (Mr Muldoon) on the Budget.

Mr Muldoon said the Budget was a “political ' document which could have been said in about two-thirds the words if the political comment had been left out.” ; He said: “The most import- , ant single factor at the present time is the requirement to contain inflation. The only thing in this Budget that bears on that requirement is the proposal that if excessive wage increases are granted, then they can’t go into prices. “That is a Federation of Labour policy that was put up to the previous Government over two years ago, but was not accepted because it would not work. “As far as I can see that is the only policy in this Budget that bears on the prime requirement to contain inflation. “Mr Rowling is going to collect more tax from the people this year than I ever did.” Mr Muldoon said the estimated 17.4 per cent increase in Government spending was excessive and inflationary. “Before I left office I had authorised a 3 per cent increase, plus the amount of inflation. That would have been well below this 17 per cent.” Mr Muldoon was sharply critical of the treatment of pensioners. “He has shortchanged them. I estimated, based on the increase in prices, that the pensioners in this Budget were entitled to $2 for a single beneficiary and $3.50 for a married couple—and that wasn’t generous.” IMPACT “MODERATE” The Budget steered a course between the Government’s stated aim of planning for long-term economic growth and an accelerated social welfare programme, said Mr L. N. Ross, who was chairman of the Governmentestablished Tax Review Committee in 1967. “While everyone will not be happy with some of the measures proposed, the overall impact of the Budget on business activity and confi-' dence in the economy should ( be moderate,” Mr Ross said. > Although measures were ( expected to discourage pro-* perty speculation, the 90 per cent—reducing to 60 per icent —tax on excess realisations of property sold within two years of purchase i were more severe than would I generally have been expected. “While this will certainly discourage short-term speculation. it may also discourage desirable development unless the legislation is very carefully framed to avoid this (effect,” Mr Ross said. He said the introduction of- ■ a rebate system instead , of (the personal, wife and other [exemptions was a sound (move. FARM “DISINCENTIVES” The Budget provided disincentives for the earners of more than 90 per cent of New Zealand’s overseas exchange—the farmers—and did nothing to stimulate pro-| I duction and growth, the

Dominion president of Federated Farmers (Mr W. N. Dunlop) said. . ” “It has increased the prices to the individual farmer of essential farm input items such as fertilisers, weedicides, and pesticides,” he said. “Farmers were looking for measures to increase confidence and control inflation. They will be disappointed in this Budget.” OTHER COMMENT Mr F. Turnovsky, president of the Manufacturers’ Federation: “This is a Budget for development. It establishes a climate for industrial growth, export expansion and the achievement of higher productivity As such it will be welcomed by manufacturers. “The greatest threat to these goals is inflation, but. the Budget offers the chance to contain it by placing emphasis on growth. However, there will be considerable reservation about the technique of using price control to contain wage escalation. “Manufacturers await with interest further details of the worker participation scheme.” Mr A. F. Crothall, presr dent of the Employers’ Federation: “The Budget will maintain confidence in the economy which has been apparent recently. The measures to reduce inflation, in particular that only 5 per cent of wage increases be passed on, put the responsibility squarely on employers and unions. If the employers and unions cannot agree on wage increases there could be industrial strife, but if both sides work together for the benefit of the country it could be very successful. “The proposals on em-

ployee investment in their companies are quite a radical approach which need close examination, but they could give long-term benefits by providing staffing stability. The abolition of the payroll tax gives incentives to companies to absorb increases, and could even lead to the reduction of costs in some cases.” Mr F. L. Onion, chairman of the Dairy Board, termed the Budget “liberal and forward looking.” He said it had a “novel and, one may hope, an effective approach to the critical problem of bringing inflation under reasonable control.” He was pleased with the Government’s evident determination to help the pastoral industries achieve fast diversification of production and trade. “I think there is overemphasis of the potential of industrial export growth, compared with the far greater potential of growth in the primary sector,” Mr Onion said. Mr T. E. Skinner, President of the Federation of Labour, said on television that trade unions might have to alter their bargaining techniques as a result of the new 5 per cent guide-line on price rises after wage increases. He feared employers would use the 5 per cent as a basis forj future wage negotiations, and predicted industrial unrest if this was so. Mr Skinner said there already appeared to be a mis-| conception that the Budget ( contained a guide-line on( wages. “There is no guide-, line on wages,” he said. Mr Skinner described the Budget as “a constructive and honest attempt to stimulate the economy,” but said he was a little disappointed by the limits on controlling; property speculation.