The Dominion FRIDAY, JULY 25, 1930. THE TAX-GATHERER RUNS AMOK

Dominion, Volume 23, Issue 256, 25 July 1930, Page 10

The Dominion FRIDAY, JULY 25, 1930. THE TAX-GATHERER RUNS AMOK

New Zealanders have never before been faced with such a Budget as is presented to them this morning. Not yet innured to the severity of the Customs imposts announced on Tuesday, citizens are presented with a fresh series of new taxes which will bear hardly on every section of the community. When details are set aside and the general result considered soberly, it comes as a surprise to find that there is no real evidence of economy. The national coat is not being cut according to the cloth, as Mr. Forbes undertook to do, but is being made to the same old measure. The Government is going to dress as well as ever it did and the cloth is ruthlessly taken from the taxpayer, however naked he may be left financially. Of course, if the Prime Minister’s Financial Statement be perused, there will be found talk of savings here and economy there. But what is the net result? Summed up, the figures as supplied by Mr. Forbes are as follow:— Actual. Estimated. 1929-30. 1930-31. Decrease. Revenue £25,350,000 £25,120,000 £230,000 Expenditure £25,200,000 £25,120,000* £BO,OOO ♦lncluding supplementary estimates.

Devoid of oratorical flourishes and stripped to essentials, the above is the unadorned truth of the Budget. After a great deal of talk about national thrift, the Prime Minister estimates that he will save £BO,OOO on expenditure totalling 25 millions or about one-third of one per cent. After professing to be greatly concerned to spare the taxpayer in a lean year, he budgets for £230,000 less revenue, a decrease of about one per cent. And, as will be stated more fully later, the revenue yield appears to have been much under-estimated. In raising his revenue, Mr. Forbes pretends he is placing taxation so as to cause as little hardship as possible. Actually he has imposed new levies on everyone and everything, a frantic scamble for money. Cloth is taken from every back regardless of ability to withstand the chill frost of taxation. To take one instance, all except farmers with land of less value than £7500 are to pay double taxes, income and land, although it is known they are already gravely prejudiced by the fall in commodity prices. Land valuations remain high; yet land tax is to continue on that artificial basis, plus the rate on earnings. In fact the farmer has to pay tax on income and the capital represented by his land. Business has already been hard hit by increased Customs and excise duties and now is to be further injured by higher income taxes, fewer exemptions, stamp duties and so on. Conditions were difficult enough prior to the imposition of these latest charges, the effect of which must be profound. It is not only that business will be affected, but also its servants and through them the whole community. Employment will be reduced, another addition to State problems and individual distress. Even more injurious, imponderable but none the less real, will be the psychological reaction to this panic Budget. New Zealand’s economic condition is essentially sound but, when the Finance Minister runs amok, the national consciousness is naturally unsettled. Mr. Forbes has accepted the chronically conservative outlook of the Treasury, lapped up its poisonous broth, and is involving the whole country in his financial convulsions. But the taxpayer, unlike Mr. Forbes, wi|l refuse to believe that all these new taxes are necessary. It is patent that the revenue has been under-estimated. Take beer, for instance. An extra halfpenny tax has been put on each gallon but Mr. Forbes estimates that he will receive, not more revenue, but £5OOO less—£6ls,ooo instead of £620,000. The new Customs duties are estimated to ptoduce £BOO,OOO, yet Messrs. W. D. and H. O. Wills after careful investigation state that £400,000 more will be got in a full year (£266,000 in eight months) from cigarettes alone, apart from tobacco, cigars, whisky and all the other increased dues which required six newspaper columns to summarise on Wednesday morning. Let it not be forgotten, moreover, that the Government under-estimated Customs last financial year by £500,000. The principal counts against the Budget are, therefore, that so many of the tax increases appear to be unnecessary and that it supplies no real evidence of economy. Because the Government has failed to control expenditure it is a weak Budget. Weak, also, because the Government has levied on a scale which appears to be higher than even its extravagant ideas 'justify. The result is that much hardship will be laid on all classes in a difficult year.