FRIDAY, NOVEMBER 13, 1936. SOCIALIST FINANCE

Dominion, Volume 30, Issue 42, 13 November 1936, Page 8

FRIDAY, NOVEMBER 13, 1936. SOCIALIST FINANCE

In explanation of the New South Wales Government’s taxation proposals, introduced in the State Legislative Assembly last week the Minister in charge of the Bill, Mr. Spooner, said that the effect of the readjustments made with respect to company rates would be “to lighten the burden of taxation upon industry.” In comment curing the debate the Leader of the Opposition, Mr. Lang, whose Socialist policy when in office brought the State to the verge of bankruptcy, said that the Government “had done nothing but make concessions to the wealthy at the expense of the poor. This is the kind of emotionalism which, as demagogues nave discovered by experience, makes a ready appeal to the unthinking. But there is no sense in it. The more wealth is taxed, and the money exploited therefrom diverted into channels of doubtful productivity, the worse it is for the poor. The New Zealand Minister of Finance in his Budget speech last session declared that the principle guiding the Government when making its decision is that a first charge on the national income should be the care of the aged and ailing. By all means; but the national income has been raided for other purposes as well. The Government may not consider its industrial legislation in the light of taxation, but that is what it amounts to. Socialism in government involves the divorce of political power from financial responsibility. The end is sought without due consideiation of the means. For example, in his address to the Annual meeting of the Dunedin Manufacturers’ Association, the Minister of Industries and Commerce admitted that some manufacturers would be at a disadvantage as a result of a general rise in costs, and that the problem of finding a way out was not an easy one.. “We have agreements operating,” he said, as reported in the Otago Daily Times, “and anything we can do, designed to assist the manufacturers and protect them from overseas competition, must be done within the terms of those agreements. I was confronted with that after the passing of the legislation” [the Industrial Efficiency Bill]. What Mr. Sullivan should have done was to have examined this aspect of the question before, not after, committing himself to such a contentious measure. And while he is now searching for ways and means of satisfying the New Zealand manufacturers, his colleague the Minister of Finance and Marketing is now in London assuring the British manufacturers of his hope to exchange our primary products for their goods. A fact frequently overlooked is that taxation of industry jn the great tnajority of cases hits the small investor. In a discussion of this aspect of Socialist finance some time ago it was pointed out at Home by Sir John Marriott that the “Big Five” banks in the United Kingdom had between them over 275,000 shareholders with average holdings (nominal) of a little over £2OO. Lord Snowden on one occasion, when Chancellor of the Exchequer, confessed that he was “staggered by the magnitude of the contributions which are made by the working people of to-day, in one form or another, to provide for what we colloquially call ‘a rainy day.’ ” (Our own Prime Ministed should note that remark in the light of his recent observations on thrift.) These contributions went into investments of various kinds. The Government should therefore remember that in attacking rhe wealth of the country through taxation it may be attacking its own supporters. Sir John Marriott emphasised this point in his remarks on the subject: “The thrifty workman who has invested his savings in small house property, either directly or through a building society, or in a bank, railway, or industrial shares, knows perfectly well that his savings are secure only so long as the principle of private property is sacrosanct.”