TAX PROPOSALS

Dominion, Volume 33, Issue 2, 27 September 1939, Page 11

TAX PROPOSALS

Outline By Minister Of Finance ESTIMATED RETURNS Total Of £9,750,000 For Defence This Year “The expenditure which it is estimated will be necessary between the present time and March 31, 1940, will be £9,750,000,” said the Minister of Finance, Mr. Nash, when the Customs resolutions were before the House. “The beer duty is to be increased from 1/9 to 2/- a gallon, and there will be a 25 per cent, increase to the duty on tobacco. The gold duty is also to be increased by the payment to the State of 75 per cent, of the increase in the price between August 24 and the price on the day on which it is exported. The remaining 25 per cent, of the addition will remain with the person who wins the gold. The sterling price of gold on August 24 was 148/-, and it is now 180/-. The price in New Zealand currency on August 24 was £9/5/8, and so long as the price remains above that three-quarters of the difference will go into the War Expenses Account, the remaining one-quarter being retained by the person who procured it.

“The duty on wines and spirits will be increased by 15 per cent., corresponding with the Increase in the beer duty,” the Minister added. “The increased duty on tobacco will mean an extra 3d. a 2oz. tin, and another Id. a packet for a packet of 10 cigarettes. It is also proposed to Increase the income tax by 15 per cent., and death, gift, and succession duties by 33 1-3 per cent., operating as from today, September 26.? Last Year’s Income. Mr. Coates (Opposition, Kaipara): When does the higher income tax operate from?

Mr. Nash: It applies to last year’s income. It is no use getting the money next year to prosecute the war this year.

The proceeds of all the increased taxes would be paid into the War Expenses Account, which would embrace all funds needed for the prosecution of the war and would provide ail payments for war purposes, Mr. Nash said. The fund would receive the unexpended portion of the sums totalling £3,200,000 already voted for the army, navy, and air force, as well as the unexpended portion of the public works vote bearing on defence. Those two sums, plus the added death duties, income tax, and customs duties, as well as -an extra Id. for every letter posted after October 1 next, were expected to bring in £2,408,000 for the balance of the year. There would also Ik* in-' creased charges for other postal services, but these would be required to balance the normal accounts of that department. Outlining the estimated receipts from the various sources, the Minister said the extra death duties would bring in £175,000, the reason for the small sum being that these were not usually ■payable till about six months after death,, Income tax would bring in an-

other £1,440,000, postage in the six months £250,000, beer duty £lOO,OOO, tobacco duty £273,000, gold duty £llO,OOO, wines and spirits £60,000 —a total of £2,408,000. Those amounts would be over an'd above present taxation.

Estimated Receipts For Full Year.

Estimated receipts on the higher scale for a full year were given by Mr. Nash as follows: Death duties £700,000, income tax £1,440,000, postage £500,000, beer duty £200,000, tobacco duty £546,000, gold export duty £220,000, wines and spirits £120,000, a total of £3,726,000. The Minister then stated how it was proposed to raise the extra sums required to make up the £9,750,000 need'ed for the remainder of the current financial year. Amounts already voted for defence totalled £3,200,000, and the new taxation would bring £2,408,000, leaving a balance of £4,142,000 to be found, he said. It was proposed to see if some could be raised by loan, and in addition, where it was necessary, all the money required for war purposes would be obtained from the Reserve Bank. There would be an amendment to the Reserve Bank Act later on to enable that to be done, as the Dominion could not afford to be short of money at any time during the war. Mr. Dickie (Opposition, Patea): That is the worst tax of all. Mr. Nash: Normally we can only borrow what is saved, but we cannot afford not to go on with the war because the money necessary has not been saved. We have to provide credit and use all our available resources to that end. Borrowing in United Kingdom. “We have not decided what we will need by way of loan,” the Minister said. “There is another provision in the War Expenses Bill, which will be introduced later, for money required overseas. We take power to borrow from the United Kingdom Government without the usual security any money needed for any of our men overseas. The items I have outlined —particularly the £9,750,000 —cover expenditure in New Zealand only, and we have made no estimate of what it may cost if men have to go overseas. These are payments for equipment, the building of camps, the provision of uniforms, and the establishment and equipping of five air force training grounds so that we can give our people the maximum of security. “I think it may cost us £20,000,000 or £30,000,000 next year if the present circumstances continue,” Mr. Nash added. “I am sorry we have to talk of long periods, but whatever it costs we have to find it and go Tight on with it to the end.” Question on Economies. Mr. Holland (Opposition, Christchurch North:): Will there be any economies in other directions? Mr. Nash: We will still keep our men as far as possible in profitable work, but the major objective is the prosecution of the war. Mr. Holland: Will men still be paid £4 a week for chipping weeds? Mr. Nash: If there is a man with children who needs a certain amount of money a week to live he should get it. “We must produce commodities and conserve men,” the Minister said. “If we can take some of our men out of non-essential work and transfer them to industry, both: primary and secondary, the Government will do that right along. All surpluses that may be left over from various sources will automatically be transferred to the War Expenses Account.”