NATIONAL FINANCES

Dominion, Volume 18, Issue 220, 11 June 1924, Page 8

NATIONAL FINANCES

PRIME MINISTER’S REVIEW REDUCTION IN TAXATION FORECASTED FURTHER CONCESSIONS (BY telegraph— Special correspondent.) Auckland, June 10. A reply to certain financial criticisms levelled against the Government was made by the Prime Minister when speaking at a banquet in honour of the Hon. C. J. Parr at Mount Albert last night. Mr. Massey said that there was need to emphasise that the fact that the national finances were very closely associated with the prosperity or the country. At this tune there were a number of people going up and down the country decrying the credit of the Dominion in order to “get at” the Government. Que of these Jeremiahs was at Pukekohe the other evening, and Mr Massey said that he had since received a message from some of the electors there that they had now heard all that could tie said against him and he would be safe for the Franklin seat and the Premiership as long as he lived. (Applause.) , „ , „ . , In spite of these doleful financial critics, the best judges in the world, those who controlled the London money market, had recently shown in a remarkable fashion the estimation in which New Zealand was held. He recently had gone on the London market for a loan of £5,000,000, and instead of that sum he had been offered £20,000.000, and that on the most favourable terms obtained by any Government in the Empire it’, the last twelve months. (Applause.) That showed how sound the credit of the country was, according to the most competent judges. . , , The Government had been criticised because it ended the year with a surplus. “Heaven onlv knows,” said Mr. Massev. “what the critics would say if wo had a deficit.” (Laughter.) In the present position, with a heavy expenditure to be faced, it was necessary to have a surplus. No one was more strongly impressed than the Government with the necessity for reducing taxation. .No country could prosper with .taxation imposed out of proportion to its means and ability. Last year, as Minister of Finance; he had been able to reduce taxation considerably. This year there was a surplus of over 1} millions. “I do not know by how much I can relieve taxation burdens this year,” said the Prime Minister, ‘but I hope to induce Parliament to make very considerable reductions within the next few months.” (Applause.) Dealing with the necessity for financing on the surplus, Mr. Massey explained that the financial year ended on March 31. Four or five lean months followed, little revenue was coming in and receipts from exports were small. That was where the surplus came in. to fill the financial hiatus. By July last year the expenditure since March 31 was £2,533.000 in excess of revenue. If there had been no surplus, where could the Government have obtained money to carry on ? There were a whole lot of financial exports criticising the Government, but they took not the slightest account of that annual problem. Mr. Massev referred to reductions in taxation which had been made since the war. The man with a mortgage used to be taxed on his debt, hut Cabinet agreed to remedy that. The exemption from tax on mortgages up to £4OOO was the right thing and showed that the Government was concerned with the small settler struggling along with a mortgage. “Some ncople.” he continued, “say that we are- not Liberals. Wo are more Libei al than they could ever think to be.” As far as the reduction in taxation last year was concerned, remissions on supertax income tax on land and income tax totalled £1,175,000. There were ether remissions in the amusement tax and he might get all this tax off shortly, though he was not quite sure yet. Remission in tea duty’ and nostage brought the total to £,1,563,000, and that could not have been done 12 months ago, except for the surplus. Tie hoped for a corresponding reduction in taxation this year, and if that happened no one would be better pleased than himself. The exports for the last financial year totalled £51,652,606, and it had not been a particularly good season. Imports as a mile followed exports, and they were quite satisfactory. A word of caution was advisable, however. He was quite certain that they were going to have keener comnetion in the overseas markets. Ho believed that the trade of New Zealand per head of population was higher than in any other country. In spite of all that, people were going about saying that the country was going to blue ruin. A voice: A Jeremiah. Mr. Massey: Jeremiah was not in it.

A great deal was sometimes made, continued Mr. Massey, of the rate of taxation in this country compared with that in others. A return made to the House of Commons, in the compilation of which an error had occurred, made New Zealand compare unfavourably with Australia. These comparisons could never be quite just, as there were varying conditions in different countries. Australians envied New Zealanders the reductions of taxation recently enjoyed. A representative of a large Australian firm recently informed the speaker that his company’s income tax was 12s. 6d. in the £. “When an opportunity offers I am going to ask Parliament to reduce taxation still further,” declared the Prime Minister amid applause. His attention had been turned to the fact that the country owed a tremendous amount of money—£2lB,ooo,ooo. While that amount was certainly owed what were the interest-earning assets? There was 1 £156,000,000 under this head. He might have made the figures much better than that, as he had not taken into account public buildings, harbour works, tourist resorts, State forests, Samoan Crown Estates, and cash to the value of another £51,000.000. “There is no sounder country in the Empire from the point of view of finance and of general prosperity than that to which we are privileged to belong,” concluded Mr. Massey.