The Dominion. THURSDAY, AUGUST 5, 1920. THE BUDGET DEBATE

Dominion, Volume 13, Issue 267, 5 August 1920, Page 4

The Dominion. THURSDAY, AUGUST 5, 1920. THE BUDGET DEBATE

The sudden collapse of the Budget Debate is in sonic respects disappointing. Although the Government naturally will be glad to proceed with the work of the session, some time might have been devoted very profitably to the discussion of the extraordinary financial problems by which the Dominion is faced. Apparently the members of the Opposition have little fault to find wjth the Government's, financial administration and policy, but in the principal debate of the session they might have been cxpected to contribute something in the way of helpful criticism and suggestion. It is much better, however, that anticipations of this .kind should bo disappointed than that any further time should be wasted on such lame and ill-considered speeches as were made on Tuesday by Messrs. Wilford and Forres—the only Oppositionists who took part in the debate. Both members made it particularly clear that they have hardly begun to consider the problems of national finance on which they touched. They agreed in the extraordinary assumption that tho policy of rapid debt-redemption which has been inaugurated in Great Britain ought to be adopted and applied in this country of sparso population and incomplete development, and the detail proposals they advanced are interesting in thoir disregard of practical considerations if in nothing else. Thus Mn. Wit,ford advocated a levy on capital, and had something to say about tho arguments for such a levy used by British statesmen. Evidently he regarded it as unimportant that, although Britain is committed to a bold policy of oxtromo taxation with a view

to the rapid reduction of debt, the idea of imposing a. capital levy has been abandoned in that country after exhaustive investigation and consideration. The opinion reached by tho Government and financial experts in .Britain is that a levy on capital would do less to produce revenue than to unsettle business and destroy credit—that is to say, to destroy sources of revenue. These considerations are certainly not of less weight in New Zealand than they are in the United Kingdom. Mr. Forbes went one better than his Deputy-Leader in urging that taxation should bo doubled, without increase of Customs duties. This was truly a hold flight, hut evidently the member for Hurunui did not realise where it landed him. One of his_ own colleagues (Mr. Myers) pointed out some time ago that under the existing 1 scalc some large taxpayers in this country are paying thirteen shillings in the pound or more in taxation on their annual income. Any approach to taxation on the licroic scalc advocated by Mr. Forbes would evidently entail very much moro than doubling the demands now made on payers of income, land, and other taxes from the bottom of the scale upwards. It is hardly necessary to point out that taxation short of the point airily suggested by the member for Hurunui would hopelessly cripple tho country by destroying the financial stability upon which productive enterprise depends. Although he hardly made himself clear on tho point, Mil. Forces" was apparently under the impression that people of wealth pay a, relatively smaller share of taxation in this, country than in Britain. _ The cxact contrary, of course, is the case. It is true that somo British taxpayers pay as much as 15s. 6d. in tho pound, but this is accounted for by the existence of much greater aggregations of wealth in the United Kingdom than in this country. On the other hand, heavy taxation is imposed in Britain on incomes that are exempt in this country, and on a per capita basis Customs and Excise _ duties are considerably heavier in Britain than the corresponding levy of Customs taxation and beer duty in New Zealand. The leading contention of the Opposition speakors—tbiit the early and heavy reduction of debt ought to be the essential aim of financial policy in this country—is so obviously unsound that it is difficult to understand why it was raised. There is an absolute contrast between our national circumstances and thoso of Great Britain. This is a developing country, which for a long time to come must continue to Sorrow money, internally or abroad, in order to develop and tap resources at present lying idle and unproductive. _ In the circumstances ample provision is made for debt redemption in the sinking funds provided for the ultimate extinction of war and other debts. The contention that the Dominion ought to concentrate on the speedy reduction of debt implies that it ought, meantime to abandon, or at all events limit, the policy of development b,v _ the extension of transport facilities, the generation of water-power, and all the activities that afford extended scope for settlement and for an increase in population and production. Any child will perceive that by concentrating on development ana making moderate provision for the gradual extinction of public debt tho prosent generation will pass on to pos-1 .ferity a far richcr estate and lighter! burdens (in relation to population and developed wealth) than if the rapid reduction of debt were now made tho chief object of financial policy. A great part of the existing debt is offset by reproductive works and investments, and it is evidently by broadening and enlarging its developed resources that tho Dominion will best and most speedily set its financial and economic affairs in order. While they disregarded these elementary and basic considerations of our national finance, the Opposition spokesmen showed themselves as little in effective touch with the adjustments of taxation which are possible and advisable. In closing the debate the Prime Minister touchcd on the- taxation of unimproved land held for speculative purposes and other features of progressive' pdicy, but from this standpoint, as in other respccts, the Opposition speeches were barren of helpful or constructive, suggestion. The poor standard set liy th<! Opposition on this occasion definitely limits any regret that otherwise would be felt at the early termination of the debate.