SALES TAX

Evening Post, Volume CXL, Issue 60, 8 September 1945, Page 10

SALES TAX

INCREASE DEFENDED

Justification for the retention and increase of the sales tax by the Labour? Government was claimed in the House of Representatives yesterday by the Minister of Internal Affairs (Mr. Parry), who said the increase had been forced by the huge war expenditure. Asked why the Government, contrary to its election promise before it took office, had retained the sales tax, Mr. Parry said it was because of the extraordinary position in which it found itself —there were 60,000 unemployed, many homeless, and people shivering through lack of adequate clothing.

The Government had been compelled to tax, and when it increased the sales tax it also altered the incidence of it and gave greater relief to those buying the necessaries of life. For the most part sales tax today was on luxuries.

Mr. Parry said the Labour Opposition in the 1920-30 period realised that taxation should be used to meet expenditure, but the then Government allowed superfluous profits to go back to wealthy people, who subsequently used them in an orgy of speculation. Millions of pounds were lost in land gambling, with the result that the country was almost ruined. The Government reduced income tax but increased Customs duty, and the remarkable thing was that in those ten years £54,000,000 was borrowed in Britain. A total of 1643 farmers went bankrupt, and bankruptcies throughout the Dominion numbered 6914, or 691 a year. While the rich people were allowed to get away with the swag, pensions were increased by only £7349 in ten years, with a total payout of £450,000.