The Dominion WEDNESDAY, DECEMBER 10, 1930. THE LESSON OF THE LEVY

Dominion, Volume 24, Issue 65, 10 December 1930, Page 10

The Dominion WEDNESDAY, DECEMBER 10, 1930. THE LESSON OF THE LEVY

Every morning the news contains fresh evidence of quickened interest in the problem of unemployment. Partly this is due to the growing number registered as out of work, but chiefly to the fact that every adult male is being levied for cash to provide the means of relief. The individual at once feels that he has a stake in the fund and although he may never come on it for benefits he wants to see that value is obtained for his money. In this attitude of mind is to be found the best argument for direct taxation. As a matter of fact each adult male has for years been levied for the relief of unemployment. The tax was ■indirect, however, and he did not bother much about it. Indeed he may have been foremost among those who urged the Government to spend more and spend anyhow so that relief was given to the unemployed. But now he realises that it is out of his pocket that the State purse is filled and he begins to take a personal and critical interest in the spending. Someone may object that direct taxation is no new experience and thinks rather ruefully of income and land taxes. But the yield from these sources is not ear-marked for a particular purpose nor is it obtained from every adult male. A personal levy for a distinct purpose is a novel fiscal experience for New Zealand and seems likely to be a salutary one. It will wake up the individual to the fact that the Government has not some mysterious store of wealth out of which it meets the insatiable demands oi democracy but that, practically speaking, it must levy him and his like for every penny it gets. Suppose that the principle of a direct levy for a specific purpose were extended to other departments of State activity, it can readily be imagined how much keener would be the public scrutiny and the compelling incentive forced upon the Government to ensure administrative efficiency. Suppose, for instance, that the railway losses had to be made up, not out of, the Consolidated Fund which may be anyone’s money, but by a direct' levy out of your pocket and Tom’s and Dick’s and Harry’s. The result would be that the Minister of Railways would take infinite pains to avoid making any levy at all and, if he did have to confess a deficiency, he would keep it down as low as humanly possible. It is estimated that about 400,000 will pay the unemployment levy and that figure may be taken as a rough statement of those from whom most of , the annual tax revenue is drawn—the noble army of taxpayers. If Mr. Veitch had to make up this year’s railway losses (which will probably amount to about millions) by direct tax, he would have to levy each individual for £3/15/- Such a prospect would force him to put his house in order rather than face the irate 400,000. Another case in point is that of contemplated railways. If, instead of telling the public generally that the United Government’s programme of construction would cost when completed £737,000 annually in taxation to make up losses the Minister of Public Works said that these lines could be financed only by levying every adult male for 37/6 a year for untold years, then there would be no doubt about the answer.. The railways through the earthquake country between . Kawatiri and Inangahua or over the sand dunes and along the rock-bound and infertile coast between Ward and Parnassus, and other such expensive works, would never be undertaken. It would also surprise people, if the schools and colleges were paid for by special tax, to learn that although education is secular and compulsory it is certainly not free. In this case the annual levy on each adult male would amount to £ll or £l2. These arc but a few examples taken at random to show what we are paying indirectly and beside which the unemployment levy is comparative’y insignificant. It would contribute greatly to efficiency of government if all departments of State activity could be financed by the system of direct levy. The great objection, of course, is that the incidence would be unfair but the lesson for every taxpayer should be that it is not some vague organisation called the Government who pays but he himself.