TAX ON WAGES

Dominion, Volume 24, Issue 148, 19 March 1931, Page 11

TAX ON WAGES

Alternative to Cut SERVANTS OF STATE Counter-Proposals Made Counter-proposals in the form of a wage tax were submitted at the mass meeting held at the Town Hall last night, called by State Service organisations, to protest against the proposed salary and wage reductions. The attendance was about 2000, Mr. M. F. Buckie, DeputyMayor, presiding. The organisations concerned were the New Zealand Educational Institute, Amalgamated Society of Railway Servants, Public Service Association, au-d the Post and Telegraph Association Mr. Luckie explained that he was presiding as representing the Mayor, and would not express an opinion on a matter which was one between themselves and the Government. Mr. J. A. McKenzie, of the Post and Telegraph Association, referred to the last protest meeting held in 1922, when salary reductions were made which had never been restored, even though they had had a marked period of prosperity when restoration was justly due. When the cut was made they were told it would be restored when the financial condition improved, but practically ten years had gone without that promise being redeemed, and it was now proposed to make a flat rate cut of 10 per cent. In 1890 the Public Service was “higgledy piggledy” in regard to classification. Efforts were made to get better conditions, but it was not until 1913 that a Public Service Commissioner was appointed. Then the war broke out; the service recognised that it was its duty not to embarrass the Government, and so for some years did not move further. In 1919 a National Government made the service free of the conflicting interests of politics, and the Public Service gained its first improvement in the way of classification, grading and improvement in salaries. An adjustment in keeping with the cost of living was made in the following year and an agreement was also reached that the increase would be adjusted as the cost of living went up or down by ten points. When the 10 points increase occurred they did not get the adjustment, but later when the cost of. living fell 10 points below the 62 per cent., their salaries were reduced accordingly. “At Mercy of Politicians.” The rank and file had remained on the maxima line since 1922. Now a further reduction was proposed, and the service was going to protest against it beiug put through. They should not be subject to or at the mercy of any political party. The hardship provision had been brought forward again, but there was not a single case where consideration was given to any individual under the hardship proposal. Speaking .for the teachers of New Zealand, Miss M. Magill, of the New Zealand Educational Institute, said they were at one with the other organisations in regard to the proposed cuts. They were prepared to make sacrifices with the rest of the community if necessary and equitable. Speaking of the depression, Miss Magill said New Zealand was quite able to make a good recovery. The Public Servant had not the attributes of the economic man; he could not go and look for fortune or high adventure, but gave these things up for stability aud security, giving a specialised service for which there was no life outside of the Government departments. Miss Magill stressed how long the teachers had been looking for a revised salary scale which had been promised for so long. Teachers of New Zealand were among the lowest paid teachers in the world, while the qualifications demanded were of the highest. The country would not prosper when it starved education. Chased a Rainbow. “The Public Service chased the rainbow of salary improvements when the better times came, but did not succeed, said Mr. F. W. Millar, of the Public Service Association. They should not tinker with wage factors when dealing with a temporary situation, for the depression was just a cycle, and would disappear. Mr. Forbes wanted to do what others had not been able to do, to settle the cost of- living and to balance his Budget. He proposed to meet the deficit of £4,500,000 by making a 10 per cent, reduction of salaries in the Public Service to meet one-third of that amount, hoping the other would be met by a reduction in the cost of living. He also looked for an improvement in the price of primary products, but prices of primary products had governed the cost of living in New Zealand, and would continue to do so. If wages were reduced the employers might make a small saving, but against that was the great increase in exchange, the increase in postal charges—which would affeet commercial and busnics firms - substantially—and if they could read the writing on the wall, there would be an increase in income tax. There would be a decrease in the spending power in tbe Dominion of £263.000 a week. That would be the effect of I hut. The best, way to meet a temporary position was temporary taxation. Counter Proposals. The. counter proposals of the combined service organisations, outlined by - Air. Millar, were: — “(al A wage tax of sixpence in the £ on all salaries and wages paid throughout New Zealand, Ibis to be in the form ot stamp duty ("salary’’ to include that portion of the income ot a professional or business man which is drawn for living expenses ot biuiself or family). (l>) A special tax on unearned Income to provide for a similar taxation burden. (c) Income tax to be payable on all incomes of £l5O or over (instead of as at present £3OO or over), with an exemption In tlie case ot a married man of £l5O for a wife, together with tbo existing exemptions.” If the ten per cent. cut went through, said Air. Millar, in conclusion, tbe dead level man would find lie would be getting 8 per cent, more money for the same work that he did in 19.1-1, in spite of the fact that the cost of living was 56 per cent, above pre-war. Senior officers in the highest grade would receive less money for work of the same value. The cost of living would not be reduced one iota by the proposals of the Government. Speaking for the Amalgamated Society of Railway Servants. Air. L. Mellvride supported the previous speakers, saying there was no justification for the cut, which would reduce the spending power of the people still further, impoverishing the whole of the community. Railway servants had never been in receipt of the recognised standard of .191-1. If the now cut was made it would place a great number of men in the Civil Service ou the hunger line. Air. Mellvride moved the following motion, which was carried unanimously: “That this large, combined meeting of alt branches of the Public Service strenuously objects to the imposition of an additional reduction in salaries for the following reasons: — .1. The drastic reductions made in 1022 reduced salaries considerably below the cost of living al. that. time. 2. Despite (lie fact Hint tlie cost of living has not yet fallen to the point to which salaries have already been reduced, the cut of 1022 lias never been restored, although in the intervening period Budget surpluses up to £15,000.000 have been shown, and tlie justice and equity of service elnims to salary improvements have not been disputed b.v successive ndniinlslrations. ,’l. Since holding office the present Prime Minister lias stated (hut the salaries o.f Public Servants were too low, and Hie Leader of the Opposition made a similar statement in December, 1920. 4. The Government’s proposals will have the effect of depriving Publie Servants of the whole of the increase granted in 1920, when the cost of living figures were at practically the same level as obtains today. 5. For the same reasons stated above we are of the opinion tlirit the Government proposals regarding Publie Servants have no justification in equity, and are wrong in principle, by selecting them as a class for special tax-atlon besides calling upon them to pay all otheir taxation to which tlie ordinary eltiien is subject.'