SALES TAX BILL

Evening Post, Volume CXV, Issue 38, 15 February 1933, Page 7

SALES TAX BILL

MEMBERS' VIEWS

SECOND READING DEBATE

SECURING REVENUE

The Sales Tax Bill came on for second reading in the House of Representatives last night. Six speeches were made, and the indication is that there are niany members who are de-' sirous of placing their opinions on • Tecord. Mr. J. A. Lee (Labour, Grey Lynn) said ho regarded the Bill as a further instalment "of deflation. The sales tax . was a definite 5 per cent, wage cut, as .it would decrease the spending power of the people by that amount. The \ cut would probably be more than 5 ■ per cent, in its-cumulative effect. Deflation would destroy the security on which money was loaned. The only alternative,was the creation of internal credits- and their distribution in ; the way. of increased .purchasing power. The present policy, would drive ' business men into, bankruptcy, and New Zealand was being brought to a state of chaos. The Government would be defeated by the system it was endeavouring to prop: up. RESPONSIBILITY ACCEPTED. Mr. W. J. ..Poison (Goyei-nment, Stratford) said he was prepared io face his share; of responsibility. in .having the Bill made law. If the Government attempted to bridge the enormous financial gap by income tax, industrialists' incomes would bo Tcduced till no1 incomes were,left. All taxation led ,to increased costs. In Argentina, one of New Zealand's competitors, a large amount of revenue was collected from a sales tax. He claimed that the disadvantages; of this system were not so great as the disadvantages of' the direct collection from • the consumer himself. Tho member for Grey Lynn had'said that-the value of securities was being rapidly; destroyed and that the country was getting ready for a first-class crisis. Such statements were alarmist statements and were not true; even if they were.true they should not be made in the House in the way they were made. .There was no. justification for endeavouring to create alarm about, the security of the, Dominion's securi- • ties.- Good security depended on good credit, and the Government was endeavouring to keep the country's' credit sound." If .New Zealand made default, who would trade with her? "We are not gong to make default," ho said. "We are going to continue to pay our way." Tho policy which was putting Australia on'her feet would'be successful in New Zealand. Before New Zealand could ask her creditors to meet her in regard to conversion of her debt she' had to show that she was doing her utmost to get out of the difficulties that were ahead. "RUINOUS POLICY." Mr. F. Langstone (Labour,-Waima-rino) described Mr. Poison's speech as a "wandering, wishy-washy : statement.,"- The Bill was to make good the damage which had been done by the raising of the -. exchange. It was another part; of the ruinous policy of deflation, .and meant less purchasing power. The Bill ineapt an increase in prices' without ah increase in purchase ing power. Direct taxation did not destroy purchasing power,. but was simply a redistribution of income. The Bill absolutely, violated all the canons of. taxation. ; One family was making, £10,000. per year out of the exchange rate and this money was going to be paid in part by the unemployed,.! who were now called upon. to. bear another bnrden. There was still plenty of- room for increased income tax. The classification of incomes, in the Official Year Book bore ■ out this contention. The people should pay taxation according to their ability and ' according -to the service and protection they received., from the State. The Government had forced the country into troublesome times because it failed to realise the difference between wealth and income. There was no lack of wealth in New Zealand, but income had fallen. The Labour Party's proposal was to restore and stabilise the inter-, nal price level, .and thus cure unemployment and get rid of commercial chaos. The Government did not consider the heart-burning of the working people, but was content to shield its wealthy friends.- The.Bill would create an army of inspectors; with inquisitorial powers, and it seemed-that the Government had rummaged the garbage tins of all the other countries in the world in order to place a new Act in the Statute Boob.: A run on tho banks was a possible' consequence of the Government's policy, which was leading to financial and economic collapse. The debate was adjourned on the _tiotion of Mr.-C. A. Wilkinson (Independent, Egmont), the House rising at 11.15 p.m. '" .'".''