The Evening Post WELLINGTON, FRIDAY, SEPTEMBER 7, 1943.

Evening Post, Volume CXL, Issue 59, 7 September 1945, Page 6

The Evening Post WELLINGTON, FRIDAY, SEPTEMBER 7, 1943.

TAX BURDEN REMAINS

When moving the second reading of the annual taxing Bill yesterday, the Minister of Finance chose to ignore almost completely the strong case which has been made out for an immediate reduction in the heavy burden of taxation. Rather, Mr. Nash was at some pains to justify the retention of the present rates. He made much of the contention that what matters most is what the people have left after their taxes have been paid. This is really another way of saying that the Government is in a much better position to spend the-people's money than are the people themselves —an argument that will appeal much less to the taxpayer than it does to the tax collector. When Mr. Nash presented his Budget a few weeks ago we commented that the statement reflected the Government's determination to retain control of the people's money and spend it as it thinks fit. There was nothing in Mr. Nash's speech yesterday, or in the speeches of other members of the Government, to indicate that there has been any change of heart, in spite of the fact that since the Budget was introduced the war has ended and New Zealand, in common with other countries, has suddenly been brought face to face with the necessity of preparing to meet the problems of peace and national reconstruction. What Mr. Nash did yesterday was to state in the bluntest of terms that, the changed circumstances notwithstanding, the taxation rate for the current year would be the same as last year. There was scarcely a reference to the fact that the war has ended, and certainly nothing to suggest that the Government has any realisation of the retarding effect that high taxation must have on national recovery. How Mr. Nash can reconcile the ideals to which he gave expression in the Budget with the hard and unpalatable facts of the annual taxing Bill it is difficult to understand. -

. Having met with little complaint the heavy demands made on them for war purposes, the people were looking, as they were entitled to do, for the earliest possible relief from the pressing burden of taxation. We believe that the Government's determination to retain its grip on the people's money will give rise to feelings of dismay and frustration. While the relationship between purchasing power and the supply of consumer goods is out of balance, there are reasons why a sudden and substantial reduction in taxation would not be desirable, but the policy which the Government is following with such determination will have the-effect of delaying a restoration of balance. As Mr, Nash himself has said, New Zealand's greatest need today is production, both primary and secondary. Unless there is the maximum production—and to obtain maximum production there must be maximum employment—our living standards must suffer. Yet the Government, while recognising that fact in principle, is offering industry nothing more than a token incentive—represented by a small and deferred depreciation allowance—to get on with the job. While preaching the gospel of greater production and full employment, it is depriving industry of the opportunity of building up resources for development and is robbing it of any incentive to extend its operations, even if it had the means. It is little wonder that industry is becoming suspicious of the motives behind the Government's policy and is asking why it is that New Zealand is apparently the only country which is unable, now that the war is over, to assist it in a practical way to play its part in the overriding task of reconstruction.

Apart altogether from the retarding effect of high taxation on industrial development, there are other aspects of the Government's policy that give cause for the greatest concern. In the. amendment moved yesterday by the Opposition, special reference was made to the effect of existing rates of taxation on the family man. In an endeavour to prove that, the New Zealand taxpayer is in a much better position than the taxpayer in Australia and Great Britain, the Minister of Health quoted figures which at first sight might appear impressive, but Mr. Nordmeyer dealt almost entirely with the married man without children. Mr. Oram, who followed, presented quite a .different picture, and showed that both in Australia and Britain the family man receives much greater consideration than he does in New Zealand. In this country the married man with children receives little consideration for the contribution he is making to the welfare of the nation. This would be bad enough if it were confined to income tax, but in practically every other direction the family man finds himself up against it. Perhaps one of his greatest burdens is the sales tax, which the Labour Party once roundly condemned, but which it has adopted and extended as a remarkably simple means of swelling the revenue of the State. In Australia the Government has recognised the serious effect this tax has on the general economy of the country and in retarding industrial development and full employment. In New Zealand. Government spokesmen, while denying responsibility for its introduction, have justified it as a war tax. Now that the war is over, can it be any longer justified? There is a crying need in New Zealand today for a thorough overhaul, of the whole system of taxation. But, instead of facing up to that task, the Government, as evidenced in the annual taxing Bill, and as evidenced by the general attitude of the " members of the Government Party, is determined to retain its grip over the people's money and, by so doing, retain its grip over industry and the whole country-