TAXATION

Evening Post, Volume CVI, Issue 137, 7 December 1923, Page 7

TAXATION

THE POLICY IN NEW ZEALAND

ADDRESS BY MR. A. A. GEORGE

Interecting reference to the question, of taxation, as It affecte the Dominion, was made by Mr. A. A. George in the course of his address before the annual meeting of the Te Ato Advancement Association.

"In my opinion," said Mr. George, "the fiscal policy of the Dominion must he altered; Taxation by way of Custom duties has reached a crushing height and is not only binding down the life of the community, but is adding enormr ously to the difficulties of trade and industry, and in the production of . the country's wealth,. Retailers throughout the country to-day are puzzling their heads how to supply goods commensurate with their customers' Jneahs,. but with ddties ranging from 25 to 40 per cent, on apparel, hosiery, boots, and a host of other things, it is quite imjxfesible to find a solution of the question. If buying was restricted to the protected and nigh-price homo market, the burdens of the consumer would, be tremendously increased and no doubt many of his wants would go forever .unfulfilled. The effect oi high duties is to lessen consumption, proauc&, slackness in trade, and so burden importations that, a profitable exchange abrba.d of bur surplus products cannot possibly be made.

"We. are essentially a producing country, therefore cheap land-, cheap materials, and cheap living is our best protection, and our greatest aid in developing the resources of this young and favoured country. It is clear to my mind that a chaiijje must be mada in our mode of raising revenue. The income tax, favoured by a large section of the community) imposes a tremendous weight on industry, and in the production of wealth^ If a man establishes a business, down comes the tax-gatherer upon him aa if he were a. public nuisance. We take away so much of his profits that the stability of his undertakings are undermined, and the extension of his operations made extremely precarious and Unwise. Not only does productive enterprise benefit those directly engaged in the undertaking, but- yields collateral advantages to others^ Therefore, I doubt very much indeed if the income tax is so equitable as many would have Us believe. Assessments are made under the complicated provisions of the Act that few can dieck or understand, but fortunately for the commiinity, we have in the Commissioner Of Taxes a. man of undoubted integ=rity. Simplicity, however, in the maf^ tei- of assessments is a right the public have tt> demand. Injurious and shockingly inquisitorial as the income tax may be, it is in all respects better than a tariff. When, however, a man is compelled to disclose 60 much of his business affairs to enable an assessment to be made of .his income it appears to me that the privacy of his undertakings afa no longer held in that respert which the freedom of the individual is justly entitled to.

"What seems to me the proper policy to carry out is to tax the unimproved value of liwid. Why the Government, in its desperate attempts to balance the exchequer, has not put this policy to the test, I fail to understand. If there ai'e nny administrative dimcifltiea in the way then by all means let us hear them. My own opinion is the Land and Income Tax Department -would gladly welcome such a method in the collection of Revenue. ;'A 'farmer even would benefit by a tax of this kind. At present he is taxed for everything he buys; for every improvement to his farm he pays a penalty. And when we consider that his living depends moire upon the cultivation of the soil than on the ownorship of land, how much better it would be to remove all taxes save that upon tho unimproved value of land. The city block owner would no doubt pay more than enough to make up what the farmer saves, and that would only be right. Why may I ask, should city blocks be worth so much and country laud so little. The answer is simply this—population; or, in other words, "people. ' Every child bom in the community adds value to all the land of tho community. Every pound gpent by the Government produces a similar effect. Who gets the benefit of this ?— the private landowner and the speculator. As business men when we borrow money wo cheerfully pay interest for its use, then why should we object to pay a tax, or interest, as we may call it, on the value added to our land by the community as a whole?

"How the Government of this Dominion allows so much speculation in land to continue I cannot possibly understand. No one should be allowed to hold land unless it was put to the best use, or its proper ground rent paid into the coffers of the State by means of a tax such as I now urge should be applied. To permit land to remain idle is an insult to our intelligence, to say the least.

I feel convinced that if direct taxation were applied to the bare value of land (and I have yet to learn that it would not be easily and cheaply collected), we should require no borrowed coin for Governments to spend in wasteful extravagance. . Artificial means of living would disappear, business would expand, our natural industries would thrive, more improvements would be effected, and fresh fields for labour opened up. In the absence of inequalities a closer brotherhood wouia exist, and no object is dearer, nothing more desirable than goodwill amongst men."