Mr Rowling attacks Govt over ‘confused distortions’

Press, 26 July 1978, Page 2

Mr Rowling attacks Govt over ‘confused distortions’

PA Wellington Both the Prime Minister (Mr Muldoon) and the Associate Minister of Finance (Mr Templeton) had made “totally incorrect” statements about Labour’s tax package, said the Leader of the Opposition (Mr Rowling) yesterday. He described the Ministers reactions to the package, as “pathetic, confused distortions.” Mr Rowling said he was amazed that both Mr Muldoon and Mr Templeton had reacted with superficial and incorrect statements, rather than any considered argument against the Labour scheme. Replying to Government criticism that. the scheme was grossly under-costed, Mr Rowling said the costing had been done by independent economists. “On all estimates it fell below S4OOM. The Labour Party was confident that

most of this could be met through the massive boost that the injection of spending power would give to the economy,” said Mr Rowling. He denied that the foreign exchange levy could be illegal: “Like devaluation it is an across-the-board move, affecting currency value. This is accepted in the inter, national community as a legitimate area of Government activity.” He also denied claims that the levy would wipe out the tax benefits through import costs. He said the effect of the levy would flow through into everyday costs, and would be only a fraction of the benefit gained through the full taxation scheme. . “If people want to spend heavily on imported goods and waste foreign exchange, then they should expect to pay for it, that is their choice,” said, Mr Rowling. “The cost difference would mean a real incentive for

people to ’buy New Zealand' and boost local industry.” ■ The Prime Minister's statement that a single-in-come family with young children would be “worse off” under the Labour scheme, was wrong, said Mr Rowling. “These families will be considerably better off, unless they are in the ven? high income bracket. In addition they will keep the child benefit, as long as their children remain dependent. They will not lose it as their children, grow older.” Mr- Rowling said that the single most important aspect of the tax package was that it would get New Zealand back to work. “The argument is not really so much about taxation. It is about a choice between 100,000 people out of work, SIOOM a year thrown away paying people to rot on the dole, factories closing down, and shortened hours — and a scheme that will boost local industry, put people back into jobs and encourage productivity,” Mr Rowling said. The leader of the Social Credit League (Mr B. C. Beetham) said in Dargaville on Monday evening that Labour’s proposed tax reforms were, a shift of emphasis, .not a tax saver. While there was much to be said for a redistribution of the tax burden, he said, what was really needed was a tax reduction. Labour’s finance spokesman (Mr R. J. Tizard) said in Mastertdn on Monday

that increased taxation through a foreign exchange surcharge on imported goods, would not only revitalise New Zealand factories but would also cut the unemployment figure and release more taxable money into the community. “What we are proposing gives us room to manoeuvre and to get regional development going again,” he said. One of the points of using a foreign exchange surcharge was to give a lift to local industry: “This will make overseas prices a little bit higher. People will get them — but they will pay a bit more, said Mr Tizard. The Opposition failed in a bid to force a snap Parliamentary debate on the Labour Party’s new tax proposals, yesterday. The Deputy Leader of the Labour Party (Mr Tizard), in moving the adjournment of the House, said that the proposals required the immediate attention of Parliament and involved the Ministerial responsibility of the Government. f ' ' * However the Speaker (Mr J. R. Harrison), declined the request. He said that the Government did have a responsibility for taxation but not for taxation proposals put forward by the Opposition. The whole matter could and should be debated during the second reading of the Government’s Income Tax. Amendment Bill which was at present in tenth position on the Parliamentary Order Paper, the Speaker said.