A DEFICIT POSSIBLE

Evening Post, Volume CXXII, Issue 31, 5 August 1936, Page 12

A DEFICIT POSSIBLE

(Ey Telegraph.)

(Special to the "Evening Post.")

. CHRISTCHURCH, This Day. In its editorial comment on the Budget, the "Press" says:

"Mr. Nash's first Budget wil.l have a cold reception. It will disappoint the many hundreds of electors "-who voted Labour because they were dissatisfied with the existing, monetary system and because they were foolish enough to believe that Mr. Savage's promise of an 'intelligent use of the public credit' really meant something. Mr. Nash is nothing if not orthodox.' He uses the public credit as cautiously as his predecessors used it, and it might not be a rash prophecy to say that he is destined to be the Snowden of the New Zealand Labour Party. Criticism* of the Budget will be directed mainly against the increases in taxation and against the Government's failure to carry out its promise to reduce indirect taxation, particularly sales taxation. Mr. Nash will probably plead that the Labour Government cannot honour all its pledges in one year, but the?answer is that the opportunity to reduce indirect taxation which presented itself this year is not likely to be repeated in subsequent years of Labour rule. It is perhaps significant .that Mr. Nash did not even mention the subject of tax reduction. "A- second point on which Mr. Nash is open to criticism, having regard to his pronouncement in favour of balanced Budgets, is the smallness of his estimated- surplus, £13,000. His estimates of increased tax yields are more than generous and it will not be surprising if the present financial year ends with a substantial deficit. Finally, Mr. Nash's homily' on the purpose of the graduated land tax shows a lamentable lack of financial realism. The history of this tax in New Zealand shows-clearly that as an instrument of social policy it is quite ineffective: - The - reason- for its reimposition is, it-may be suspected, a sentimental one. It is merely an addition of one more complication to a taxation system that is already intolerably complicated."