HIGH TAXATION

Evening Post, Volume CXXIV, Issue 120, 17 November 1937, Page 14

HIGH TAXATION

REPLY TO CRITICISM

MR. SAVAGE'S STATEMENT

; Charging the Associated Chambers of Commerce with juggling with figures for the purpose of political propaganda, the Prime Minister (the Rt. Hon. M. J. Savage), in a statement made yesterday, replied to the Chambers' published reference to the causes of high taxation. He described the article as misleading.

"In their statement,1 the Associated Chambers profess to leave out the increased cost of social service benefits, yet actually in their table of figures they include the necessary administrative costs for carrying out these social services. Is not the cost of providing social services part of the services themselves? Surely it is not legitimate to separate them or to say they are not part and parcel of the social services provided by the Government. Of course it costs more to run social services than it did two years ago. The social services rendered by the Government are nearly a third as big again.

"The inclusion of one item, health administration, shows gross carelessness, if not deliberate misrepresentation. This item contains all the increase In health services as well as administration costs. Milk for school children, dental clinics, subsidies to hospital boards, Maori hygiene, and many other purely health services, are included in the table by the Associated Chambers, yet they state that social services were not included.

MAINTENANCE COSTS,

"Increased public work's maintenance costs have been included in the table. The statement itself admits the legitimacy of maintenance costs, and the fair thing would have been to omit them from the list. Actually maintenance costs on both public works and railways have gone up. The reason is not hard to find. As just one example let me quote from the annual report of the Marine Department, which was recently presented to Parliament: —

" 'Extra repairs and maintenance work held over during the financial depression have been carried out during the year. It is not a sound principle to postpone necessary maintenance work in lean years to the succeeding years, in that minor items become major repairs Jn the interim. There is no doubt, therefore, that Ihe next few years' accounts of this department will reflect abnormal maintenance expenditure, a portion of •which was* a legitimate charge to previous years.1

'.'What is true of the comparatively small works of- the Marine Department is true in much larger measure of the great public works of the country and the railways.- . Everyone knows that the pinching and scraping policy of the depression Government starved the property of the people, of necessary repairs, and we are having to pay today for the damage done then. This is largely why the maintenance of railways property is costing over £500,000 more than it did two years ago.

CAPITAL WORKS,

"The associated chambers infer that the inclusion of new capital works in public works maintenance is not legitimate, but it merely needs the works to be specifically mentioned—which they did not do —for the works to be fully justified.

"For. example, aerodromes and emergency landing grounds account for £313.804 of the increase in the item. The associated chambers are careful in drawing up their table to admit that defence expenditure need not be questioned, so why question aerodromes which are essential alike for civil and defence purposes? The associated chambers say, 'it could well have been expected of the Government that it would have examined this £4,000,000 of expenditure more closely." I wish these business men who ought to know the necessity for accuracy had spent a few minutes examining the figures themselves, and they would have found that, by the standards they themselves set, the total was nothing like £4,000,000. ..

"The frequent imputation by these gentlemen that the Government increased spending is not for social services is ridiculous. It is clearly the statement of the associated . chambers which does not bear investigation—not that of the Government."