GRADUAL REDUCTION

Evening Post, Volume CXX, Issue 132, 30 November 1935, Page 10

GRADUAL REDUCTION

SALES TAX & EXCHANGE

A MATTER FOR EXPERTS

(By Telegraph—Press Association.) AUCKLAND, This Day. Both the sales tax and the 25 per cent, rate of exchange will be reduced gradually by the Labour Government. Mr. M. J. Savage made this clear today in an interview with a "Star" representative. "I want the people of New Zealand to understand we are builders," said Mr. Savage. "We are not out to smash things. Both the exchange rate and the sales tax must be dispensed with —there can be no question about that — but I realise as well as anyone in this country that their sudden removal would be ruinous. Business people can feel assured on that point." Mr. Savage was asked whether he would consider giving the public notice of the policy to be followed. His reply was that he was in full sympathy with that idea. It was possible there was something in the way of adopting this course, but apart from that consideration, which would have to be looked into at the appropriate time, he could not see why the public should not be taken into the full confidence of the Government. Mr. Savage said that reductions would be effected as gradually as possible. At the moment he was of opinion that periodic reductions of five per cent, would be too drastic. It might be that even 2£ per cent, reductions might be too severe. That question would have to be considered by experts. Perhaps reductions of 2J per cent, would be most suitable, all things taken into consideration, but nothing would be done without careful survey of all the factors.