BUDGET SAVINGS

Dominion, Volume 23, Issue 257, 26 July 1930, Page 12

BUDGET SAVINGS

‘More Apparent Than Real’ EFFECT ON BUSINESS Non-recurring Items

“The Prime Minister has acclaimed saviugs of considerable amount, but these savings seem more apparent than real, since several of such items are of a nonrecurring nature,” said the president ot the Wellington Chamber of Commerce, Mr. D. J. McGowan, yesterday, when approached for his opinions upon the Budget proposals. “The proposals of the Government as embodied in the Budget and Customs duties are indeed drastic when considered from the point of the cost of conducting business in this Dominion,” said Mr. McGowan. “Businesses are not only being asked to face an increase in incometax rates by 10 per cent., and the withdrawal of the 5 per cent, deduction from land tax, but, in addition to this, practically every department of business is being called upon to bear an excessive burden. There are so many additional taxes proposed that it is impossible to review them all in their incidence without going into them more thoroughly than has been possible to-day in the time at my disposal. Chambers of Commerce are pleased to see the incqrporation of some items to straighten out inequalities between State trading departments and private enterprise, but these in the aggregate would not influence very greatly the forecasted deficit.

“The re-imposition of amusement tax upon the lower admissions has some justification in the present situation, but I think it was generally expected that the higher admissions, say, above 5/-, would have been mulcted in higher rates.

Motorist Severely Treated. “The motorist has been very severely treated in the taxation proposals, for not only is he asked to bear an additional 3d. per gallon petrol tax, but the highways fund is also to be denied assistance by way of Government subsidies, and this is a most unfortunate feature. Speaking of a case that comes immediately under my notice, the heavy traffic license fee for 5-ton motor-lorries remains at £75, which is most inequitable when compared with the fee charged in other directions for licenses to carry on other businesses and vocations. Business Men Hard Hit. “Businesses will be called upon to closely scrutinise all expenditures, and It seems the Government has set little example as to the directions which it has explored for economies in overhead. No one wishes to see the unemployment market expanded, but the Government proposals do not seem very helpful in this. For example, business firms may have to review salary and other increases, but no suggestions seem to have emanated from the Government regarding, say, deferment of annual classification increases in the Public Service for one or two years unt” the present situation has been overcome; nor does it suggest that the arbitrary rule of retirement in some departments after 40 years’ service should be extended and retirement instead carried to age 60 or 65. The taxpayer, overburdened already in these taxation proposals, not only still has to find provision for his own later years, but also has to subsidise the Public Service superannuation scheme. Not Tackling Real Problems. “As already stated, the proposals for increased taxation are so allyembracing that it is impossible to give more than a general and cursory review, but no doubt we shall soon know how individual businesses are going to be, hit, quite apart from the general aspect involved of throwing burdens upon business men. These burdens in many cases will no doubt be reflected in prices, and so in the cost of living, and the indirect nature of many of these do not make them easily assessable as to what the per capita cost will be. There is every indication that the present Government intends that the annual taxation is to be increased by several pounds per head, and it does not appear to be tackling the real problem, which is to effect economies more in accord with the reduction in the national income due to the decreased values of our main primary products. “As regards the Customs increases,” concluded Mr. McGowan, “the reciprocal treaty with Australia will require careful consideration if the adverse trade balance with the Commonwealth and exchange rates therewith are not to be affected.”