Greymouth Evening Star. TUESDAY, OCTOBER 4, 1949. The Standard Of Living

Greymouth Evening Star, 4 October 1949, Page 4

Greymouth Evening Star. TUESDAY, OCTOBER 4, 1949. The Standard Of Living

IN recent . years trade unionism has ' entered a new, phase to .which it has not yet adjusted its organisation or its psychology: Formerly the primary function of a trade union was to secure better wages and conditions for its members without further thought to the economic consequences. . Nowadays, with the share that trade unionism claims, and undoubtedly, exercises, in the responsibility for the formulation of public policy, it can no longer shirk the economic consequences. Too many of the demands of trade Unionists today are self-contradictory. Indeed, it is to be feared- that many of them do not care how they get what they want so dong as they get it. It is futile, for example, to demand at one and the same time higher food subsidies and reduced taxation without indicating how the higher subsidies are to be met. If the idea is that there are more “rich” to be “soaked” for such a purpose, this can only argue ignorance of the fiscal realities of today. A similar ignorance is revealed in the demands for stricter control of profits as exercised through the Price Tribunal. There is a complete unwillingness to acknowledge a simple economic fact—that undistributed profits form an indispensable element in industrial development for the maintenance of employment. The fact that all profits are already very heavily taxed is conveniently ignored, as also is the fact that this taxation is starving industry of funds necessary to maintain efficiency.

There was a time when the LabourSocialists, inexperienced in the responsibilities of government, proclaimed a policy of taxing the rich as a panacea for all economic and social evils. All sorts of benefits were to be conferred on the workers at the expense of those on the higher leyels of income. But the taxing of the so-called rich has now reached the stage where it is .defeating its own purpose. The point is that the worker’s share of the cost of every benefit he receives is far from inconsiderable. He pays direct taxation in a measure unknown before. In addition the very heavy burden of taxes on industry are inevitably reflected in higher prices. Indeed, taxation constitutes one of the principal factors in the high cost of living. The worker and his family not only pay direct taxes, but also indirect taxes in the form of higher costs and prices. They are, of course, told that subsidies paid out of taxation keep down the cost of living, but in reality this is not so. Subsidy payments are merely a subterfuge for hiding the real cost of living. It should by now be crystal clear that living standards cannot be maintained, let alone raised, by a policy of burdening with taxation the people in the higher-income groups. Living standards must be earned by the people who hope to enjoy them.