THE BUDGET

Dominion, Volume 22, Issue 264, 3 August 1929, Page 12

THE BUDGET

reception by country CONDEMNATION AND PRAISE PRESS AND OTHER OPINIONS Expressions of opinion In various parts of the Dominion on the Budget indicate that nearly all the leading proposals have liad widely varied receptions. The increases in taxation are regarded by some newspapers as inconsistent with election promises, and aimed at the farming community, while others praise the Prime Minister’s courage. Business men have expressed objection to the raising of the primage, PROTEST FORESHADOWED CHAMBERS OF COMMERCE When asked for his opinion of the Budget, the president of the Wellington Chamber of Commerce (Mr. E. Salmond) stated yesterday that he would not care to express a personal opinion until the Government’s proposals had been reviewed by the council of the chamber. “This much, however, you can say, declared Mr. Salmond, “there will be a strong protest forthcoming from the combined chambers of commerce concerning the doubling of the primage duty on imports. When the last Government imposed a tax of 1 per cent, on imports, it was stated that this could not be handed on to the public, and it was not handed on, but now that the tax has been doubled there will be a great temptation to add 2 per cent. As to the other items, such as a super tax on land, they were just what was expected.” MANUFACTURERS’ VIEWS “The wiping out of a deficit of £577,252 and the providing for increases in expenditure in almost every department is a problem that demands very careful consideration,” said Mr. F. Campbell, of the New Zealand Manufacturers’ Association, when asked for his views of the Budget. “The hopes of any reduction in taxation have been dispelled at the cursory examination of the figures as presented in the BudS “The increases in taxation suggested in this year's Budget will meet with the usual opposition from those who will have to pay the increase. Taxation is never popular. From a brief and somewhat hurried consideration the proposals are no more than the Government of the day could expect to collect and no less than they could safely ask for to carry on the business of the country. “The proposals to place Government trading concerns somewhat nearer, as far as taxation goes, to private concerns, will be universally endorsed. I think the manufacturers of New Zealand will agree that the proposals are reasonable and should not interfere with the prosperity of New Zealand.” Mr. Campbell concluded by saying that the exemption of land and income tax up to £12,500 was perhaps a trifle on the low side, and he thought this might have been raised by another £5OOO. It did not take much land at from £7O to £BO an acre to total £12,500. PRESS _OPINIONS AUCKLAND NEWSPAPERS “INCREASING THE BURDEN” Dominion Special Service Auckland, August 2. Dealing with the Budget, the "Herald” says editorially:— “The adjustment of taxation forecasted by the Prime Minister with the announcement of a deficit in last year’s Budget has been entirely in the direction of increasing the burden. The Prime Minister has not given any estimates —in fact, he has frankly admitted that the effect of his proposals cannot be calculated—so that it is quite likely the actual increase will be more than £914,000. A.II this constitutes the first instalment of the programme of reviewing the incidence and reducing the burden of taxation. Instead of reducing the income tax, an increase of £440,000 is proposed through the agency of a new levy on land; instead of placing all foods on the dree list, the Government proposes to collect £446,000 more in Customs duties on all imports into the Dominion.” "Difficulties Courageously Faced.” The "Star” says:—“Sir Joseph Ward's first Budget after his return to office is one of the most important of recent years. Admirably compiled and lucidly worded, it presents a most valuable analysis of the financial situation, gives the publie a clear idea of how the country stands, and faces courageously the difficulties of the time. Its proposals to increase taxation (especially proposed increase in land tax), to promote land settlement, to push on railway construction, to write off eight millions of railway capital, to consider the closing down of branch lines and to study the whole question of railway and motor competition, mark this Budget as a document of quite exceptional significance. There will, of course, be disappointment at the announcement that taxa tion is to be increased and not reduced, but previous statements of the Prime Minister had prepared the country for this news. Nothing would have pleased Sir Joseph Ward better than to reduce taxation, but he inherited a deficit and he has to balance his Budget, In defence of his proposals, he explains that the charges on the taxpayer are largely rigid and that scope for administrative economy is very much smaller than is popularly supposed. That may be so, but the country will certainly expect the Government to explore every possibility of economy. Seven months has not been sufficient for a thorough overhaul of the expenditure.” “Pathetic Anti-Climax.” The “Sun” to-night says:—“There is an Irish saying from other days that the devil after shearing the pig observed that there was mighty little wool for so much squealing. This Satanic simile might well be applied to the first Budget of Sir Joseph Ward as supreme Minister in a meagre and immature United Government, and if the metaphor be pursued only a little farther it can be said fairly that the latest political shearing process has yielded nothing better than bristles. It is impossible to find any cause for congratulation or commendation. There are flaws in all the Budget proposals, until the whole thing looks like a South Island road riven by big earthquake cracks, depressions, upheavals. Such is Sir Joseph’s Ward's attempt at fulfilling his wild promises to mnke the Do minion not only safe for New Zealanders but more attractive than ever for thousands of immigrants and a multitude of small farmers. The Prime Minister has reversed an old couplet to make it read : ‘The things be vowed he would get done arc the things he cannot do’—a pathetic anti-climaj. J -

COMMENT IN CHRISTCHURCH NECESSITY FOR HIGHER TAXES DOUBTED Dominion Special Service. Christchurch, August 2. Commenting on the Budget proposals, the “Press” says : —“The only proposal affecting everybody, tho,.„h it does not, of course, affect all equally, is the doubling of tne primage duty on all imports. The Government’s other proposals are directed wholly against farmers. The truth is that it makes the burden a class burden exclusively. If it is necessary to increase taxation the burden should be distributed over the whole community, if only because the whole community will then be made to realise the necessity of public economy, but it has not been established that an increase in taxation is necessary. . . . The Prime Minister blames motor transport for the decline in passenger revenue, and gives a clear indication that very substantial handicaps are to be applied to motor transport services for the purpose of giving the railways a better monopoly of the passenger business. It is, of course, utterly wrong that the Government should assume the right to impede or extinguish the development of modern motor transport in order that the State railways bearing most of the weaknesses of State enterprises should be freed from legitimate competition. Sir Joseph Ward’s suggestion that public expenditure should be withheld from highways near railways is quite amazing, and indicates a strange disregard for the rights and welfare of all except the Railway Department.” New Land Settlement Policy. The “Christchurch Times” says: “The Budget as a whole is the most interesting and probably the most provocative we have had for the past thirty years. Apart from the strictly War Budgets it proves that Sir Joseph Ward retains the quick mind and courage of his younger days, for it needed courage to introduce such a Budget in a House so evenly divided among the three parties. Its reception in Parliament is likely to be more friendly than otherwise because the critics would be hard put to it to devise fairer means of raising the necessary new taxation, and none of them will be anxious to figure as an opponent of progressive land settlement. The outstanding feature of the Budget is, of course, the new land settlement nolicy of the Government. The boldness of the proposals recalls the big days of the ’nineties of last century when the Liberal land settlement policy was the subject of unprecedented bitterness in Parliament and of unrestrained recrimination in all the organs of Conservatism. Like every other addition to taxation the scheme is open to criticism, but one’s first impression is that the Prime Minister is placing the burden where it is least likely to disturb the economic conditions.” “MISLEADING” ELECTORAL PROPAGANDA Dominion Special Service Dunedin, August 2. The “Otago Daily Times” discusses Sir Joseph Ward’s Budget editorially under three headings, the Financial Statement, the borrowing policy, and the State railways. Speaking of the Finance Minister’s proposals to balance the Budget, it says: “ It is very probable that there are a number of landowners who escaped over-lightly under the system of taxation that has recently been in force, and in that case a readjustment of the incidence so that they may bear a larger share of the burden of taxation is not only not unjust, but is also reasonable.” Dealing with Sir Joseph Ward’s references to the £7.090,000 loan raised in January, the “Times” says: “The Budget announcement • amounts, it will be seen, to an admission of the misleading character of certain electoral propaganda.” Commenting on the railway proposals, the newspaper says: “The proposal to spend ten millions of money upon the construction by an enormously costly method of lines that will never un'lpr existing conditions secure traffic sufficient to meet the interest on the capital cost is so remarkable as to be explicable only on grounds of present political expediency.” Land Policy Likened to Labour’s. The “Evening Star,” commenting on the Government’s land policy, says: “Sir Joseph Ward’s strong faith in closer settlement is exhilarating after the obstacles that have been declared prohibitive to that policy in recent years. His arguments are surely unchallenged, and the policy laid down bears a sufficient resemblance to that which Labour has set forth to suggest that it will not meet with any insuperable obstacles from Parliament.” DISASTER PREDICTED TAXATION PROPOSALS CONDEMNED DUNEDIN OPINIONS Dominion Dunedin, August 20. Most of the Dunedin business men who were this morning invited to say what they think of the Budget replied to the effect that they would like to peruse the Finance Minister’s speech at leisure before venturing definite opinions on tlie subject generally,- but there was common consent on one [mint: the increase of the primage duty on imports from Ito 2 per cent. It is severely condemned. An argument used by several as the root of their objection is that the extra 1 per cent, will be borne inequitably in some lines of business—the wholesale soft goods, for example. The 1 per cent, can be pass ed on, that was the procedure, so it is said, when the original 1 per cent, primage was imposed, and there was the same experience with similar charges during the war and many years ago. but how do the retailers stand? An importing firm adds 21d. in the pound on its sale of a fine to a shopkeeper, and the primage begins and ends so far, as the selling firm is concerned, by no more trouble than a bookkeeping entry. The buying retailer may, perhaps, if given to superfiicia! views, re gard the matter at first in the same light, and laugh off his responsibility. When, however, he has to do his re pricing he is in a fix. How can he pass on 1 per cent, to a customer who asks for a shilling article? One per cent is in that case incalculable. The tables put it down as a farthing, for the reason that a farthing is the coin of the lowest denomination. The 1 per cent, does not amount really to a halfpenny until the article is priced at 3s. 2d. The retailer has no recourse dealing in small sums; he has to stand the charge that is uncollectable because infinitesimal on one deal, but comes in the aggregate to the burden that the wholesaler calmly unloads with a stroke of the pen. Several thoughtful men suggest that with rigid economy in departmental expenditure the 1 per cent. now added could be done without, and ’hey point out that that is what many business managers have had to do. One rather audacious critic ventures on the proposition that Sir Joseph Ward could fight off the deficit in one wtroke by putting 10 per cent on all

motor-cars imported from places other than Britain. “Disastrous” Proposals. For the farming community, if the proposed heavy increases in taxation are enforced an appalling state of af'airs bordering on disaster is predicted by a leading stock and station agent in Dunedin. '' :dy prospects of success for the coining season’s production were poor and few had visions of making incomes, declared the speaker, whose associations are confined not only t rural activities but also to many of the big commercial undertakings of Dunedin. “The proposals are disastrous,” he declared. “Last year few farmers made any income above expenditure.” said the speaker, “and on the basis of the markets to-day, with wool down a further 20 to 30 per cent., .here will be furthei losses if last season’s produce is now being marketed. In consequence, these enormous increases in taxation are simply going to create disaster among the farming community. Under the present condition the aim of the Gov eminent to force the bursting up of the big estates by heavy increases in land tax is going to cause a slump in land. It is going to react on mortgages and everything and everybody else connected with the land. If the new taxation becomes effective the amount of land thrown on the market will be so great as to cause disaster in all directions. The actual position today is that the farmer’s prospect of making an income next year is so ex ceedingly slim that, even if the land Is not offered for sale and the farmers attempted to carry on, the present land taxation will cause financial dif Acuities all round. In any case, the Government will get very little out of the farmers in the difference between the taxation from land and income, he said. During the past year it lias taken a great many of the farmers all their time to cover expenditure, and with prices reduced since then, there is little hope for quite a large number of them making any income at all during the coming season. The excessive taxation will lead to an appalling state COUNTY COUNCIL PROTEST. By Telocrranh Press Association. Ashburton, August 2. Tlie Ashburton tint) Council re solved to send a -trong protest to the Prime Minister and Messrs. D. Jones. M.P., and T. D. Burnett, M.P.. against f’e Government’s policy of taxing the farming community to (he extent of £800.90(1 to help to meet a deficit of £900,000.