SIX POINTS

Evening Post, Volume CXV, Issue 39, 16 February 1933, Page 12

SIX POINTS

LABOUR'S POLICY

STATED BY MR. SAVAGE

VERDICT OF THE PEOPLE

Labour's alternative to the Government's policy of taxation, especially in relation to the sales tax, was stated in concise form by tho Deputy Leader of the Opposition (Mr. M. J. Savage), when speaking on the second reading of tho Sales Tax Bill in the House of Representatives yesterday. Mr. Savage concluded his speech by placing before members the following six propositions:— ' 1. The Government policy of increased taxation, in any form, for the purpose of meeting abnormal payments on transactions, which at best cannot increase the Dominion income, but which must depreciate New Zealand currency, is not warranted. 2. Tho Government policy in maintaining a huge army of able-bodied men in questionable forms of employment, by means of taxation in any form, and especially in a form of taxation—as ih the case of the Sales Tax Bill and unemployment taxes—which is paid mainly by the poorer classes, is uneconomic and likely to lead to! wholesale default on the part of citizens. 3. Labour's alternative proposals -include the issue of credit and currency, within New Zealand, to an extent equal to tho amount of the inflation of exporters' credits in London—£lo,ooo,ooo or £12,000,000, such money to be used in reproductive employment. 4. To the extent that goods and services can be increased in New Zealand as a result of such employment there can be no inflation or' depreciation of the currency, as is the case with the Government policy. _ 5. In addition to providing remunerative and reproductive employment and guarding against any depreciation of the currency, such proposals would increase the amount of money in circulation in New Zealand, and could not possibly interfere with the exchange rate, Which should operate according to trading conditions. 6. Labour's alternative proposals would remove the necessity for taxation in any form for the purpose of guaranteeing the banks against loss and maintaining the huge army of . men and women who are being forced into the position of being liabilities instead of assets to the State.

A CHARGE ON ALL.

In elaborating his points, Mr. Savage said that the sales tax was a charge on all the people, and fell most heavily on the poor, because it was a tax on the necessaries of life. Taxation was already overdone, and was being levied for purposes that were quite foreign to, the ordinary routine of national economy and expenditure. No one would say that the huge-amount.at present being levied for the relief of unemployment came within the ordinary expenses of the State in maintaijiing public services. For many years it had been the policy of both parties to the Coalition Government to reduce direct taxation that was paid by the comparatively wealthy and increase indirect taxation paid by the comparatively poor. The sales tax was a contribution to that form of taxation. In view of the Government's policy in. raising the rate of exchange and its agreement to indemnify the banks, some form of increased taxation to make good that guarantee was inevitable.

A DEPRECIATED CURRENCY.

Mr. Savage declared that the increase in the rate of exchange had had the effect of depreciating currency in New Zealand to that extent, without in any Way increasing the incomes of the people as a. whole or increasing the amount of goods for sale. Instead of raising the exchange, the Government, under emergency conditions, ehould issue from £10,000,000 to £12,000,000 " of credit for the purpose of putting willing workers to work at reproductive work. The Hon. A. D. McLeod (Government, Wairarapa): Where is the reproductive work? Mr. Savage: SuTely there is any amount of reproductive work in a country like New Zealand. He went on to say. that to the extent that additional goods and services were created there could be no depreciation of the currency under Labour's proposal, as was. the case with the raising of the exchange. Labour's policy would fiiean that an additional £10,000,000 or £12,000,000 would be available in New Zealand for productive work, which would mean, that currency would not be inflated or depreciated. Mr. Savage challenged anybody to say that Labour's policy was not the right one for New Zealand under present conditions. . He was prepared to argue the matter on any platform in New Zealand and to accept the verdict of tho people. He believed Labour Would win out.