Exchange surcharge ‘not permanent’

Press, 20 October 1981, Page 7

Exchange surcharge ‘not permanent’

PA Wellington Labour’s proposed foreign exchange surcharge would not'be a permanent measure, says the party’s Associate Shadow Minister of Finance, Mr D. Caygill. Addressing a meeting in Wellington, Mr Caygill said that -as soon .as an annual growth rate of 3 per cent was attained, the surcharge would be removed. However, he warned it could take some time to move from zero to 3 per cent growth. ' Mr Caygill concentrated on Labour’s tax programme. He said substantial tax cuts, such as Labour promised as a boost to production, was an increasingly respectable economic doctrine. “It is being tried right now

in France. It fascinates me that the United States not long- ago approved substantial tax cuts without any substitute form of tax revenue.

“Both sides of the American political spectrum accepted the argument that tax cuts would flow through into spending and saving, both in turn increasing production and business turnover and hence business earnings available for expansion and investment." Mr Caygill said.

He said that the difference between ■ Labour’s programme and President Reagan's was that New Zealand was not spending huge amounts on armaments, and the tax cuts proposed by Labour would help those who most needed them.