AN EXHAUSTED SOURCE

Evening Post, Volume CXXXI, Issue 30, 5 February 1941, Page 6

AN EXHAUSTED SOURCE

Speaking at the Hutt carnival of demands on the Government for funds, the Minister of Finance said: "It has so many things to do, so many things that take money off other people, and consequently it is rather hard to suggest that the Government give it away. But there is one source that it feels it can take money from, and that is from those who have got 100 much. There is one direction in which that money can be particularly well spent —looking after those who are going away to defend the Dominion." If this statement summed up the Government's taxing and spending policy, it could be applauded. Unfortunately, it does not. Taxation has long passed the stage of taking from those who have got too much. There is now very little left in that locker that can be taken away without serious disturbance of the Dominion's economy. When individual taxpayers and companies have,to borrow heavily to pay taxes and compulsory loan contributions (which are in part capital levies), it is evident thai the source of "those who have got too much" has been exhausted.

Nor is it provision for Ihe Dominion's defenders that has been primarily responsible for the exhaustion of that source of State revenue and loan money. To be sure, the compulsory loan and certain of the taxes are earmarked for war expenditure, but of the aggregate expenditure from loan and taxation proposed in the Budget this year, almost two-thirds was for civil purposes. It is this initial heavy drain upon resources that is making war finance so difficult. It is not because taxpayers are having to pay for the war that they are compelled to cut their private expenditure even on essential things. It is because they have to make this payment on top of an exacting demand for funds to keep up an extravagant programme of State civil expenditure. Long ago that programme should have been severely pruned; but the pruning is very slow. That is why the taking of money from those who have too much has long failed to meet Government demands, and those demands are now cutting into the resources of industry and the means of those with modest incomes.