NATION’S FINANCE

Dominion, Volume 29, Issue 257, 27 July 1936, Page 10

NATION’S FINANCE

Budget Will Soon Be Introduced DIRECT TAXATION More Equal Distribution of Wealth It is possible that this year's Budget, which is likely to be one of the most interesting for many years, will be introduced in the House of Representatives toward the end of next week. Otherwise, it will probably appear early in the following week. “The Budget will be a document that will bring about a more equitable distribution of this country’s wealth.” said the Prime Minister, Rt. Hon. M. J. Savage, on Saturday evening after an all-day meeting of Cabinet. “At present there is a lack of purchasing power among certain sections of the community, and it is our desire to see that power more evenly distributed.”

The Prime Minister said he was not yet in a position to state whether any specific taxes would be lifted or modified in any way, since before the Government could remove a tax it had to find some other means of getting revenue. The unemployment tax, for instance. was one that was always wrong, but before it could be done away with the Government had to find something else to substitute for it. “This year’s Budget will be the first step in effecting the change from indirect to direct forms of taxation,” continued Mr. Savage. “In 1922 the average income tax was 3/5, and seven years later it had been reduced to 2/1. indirect taxation, however, rose enormously during that time, bringing about a transformation in the wrong direction. We have got to start to put things right. Indirect taxation usually hits the man who can afford it least, and spreading the tax generally means that it is spread on the people with large families and small incomes. “All that has to be altered,” Mr. Savage continued, “but it cannot be changed completely in one Budget. Our ultimate objective is to substitute direct for indirect forms of taxation as rapidly as possible. We will make a start this year.”