Grey River Argus TUESDAY, August 11th, 1961. THE BUDGET DEBATE.

Grey River Argus, 11 August 1931, Page 4

Grey River Argus TUESDAY, August 11th, 1961. THE BUDGET DEBATE.

The publie will have been able to discern clearly the attitude of jhut one Party during the finanleial discussion in Parliament.

| The other Parties are so preoccuipied with the prospect of the general election that, they have camouflaged their attitude, insofar as words can do it, on the subject of taxation. The Governjment is so palpably anxious to ikeep the Opposition, sitting on the rail that it is seared even to point lout the degree of responsibility ithat rests with the Reform Party [for the fiscal injustice that has (been done the masses of the comIniunity. The Reform Party Jias ipromised general support to the [Government, and yet it recognises the intolerable exactions involved Iby the alteration of the income (tax graduation without consideration for small taxpayers’ obligations. It is admitted by the Reformers that there should have been no such tax increase as that imposed upon moderate and small incomes. It has been universally held that graduation from the lower incomes upwards is a sound principle, whereas the Government has actually inverted this process, and, by lowering the.! (exemption to £260, made the taxa-j Jtion increases on lower ’ incomes ilgreatef than those on the higher ones in proportion! Another inconsistency is the complaint of - United members that the Govern- . ment they support has stood, and still stands, for a system in connection with public works estimates that had led to the loss of millions of pounds through the I cost being regularly and gravely

underestimated. Now there has been as yet no responsibility with jLabour for governmental policy in this country, but since 1926 the public works expenditure l has averaged about eight millions a year, so that if the loss is proIportionate to what the United complaint has cited in certain instances, it has been indeed, groat, and the blame rests equally with the Reform and United Parties. It is significant that Mr Forbes says he left the taxpayers to find only £1,800,000 towards [a budget balance whereas he says, I he began by facing a gap of seven [millions? Therefore, Wagej, salaries and the working class genlerally have been cut up pretty severely. To get about half of the £1,800,000 he went to the- Customs, which hits all classes evenly, leaving so much less to come from incomes, and of that lesser amount he has gone to incomes as low as £260 for a very large , proportion, leaving the high incomes [unaffected except for the general Increase of the surtax, instead of altering the graduation in a manner consistent with distributive justice. The pluck of the Government is shown by its conceal- 1

ment of the fact that it is going to close down on public works to, the extent of forty:per cent. The* only record of the fact was that given in the prospectus issued in | London recently for the loan, and ( it remained for an Opposition' member to. bring it to light with anl approving word. The way it is, put is that loan money outlay I will be this year cut by two-fifths, | leaving the poor to maintain the | poor' out of levy and wages tax., The Opposition assert, that there' has been reckless borrowing by the . United Party, stating that, only j for relief due to the war debt holi- ' day the debt charges on this year’s budget would have been over eleven and a-quarter m il-1 lions, compared with about ten ’ millions in 1928-29; but what j about the Reform record • From I 1921-22 to 1930 S'ew Zealand raised London loans totalling £54,000,000, and the expense of raising these was £3,600,000. The Bank of England and the firm acting as New Zealand agents both received 1J per cent., and there were many other charges to swell the country’s interest bill. It is true that one loan was issued as low as . £97 10s, and that the lenders received £l2O per share when the debentures wero converted info stock. A re-conversion increased New Zealand’s debt for that issue from £4,364,100 to £5,599,467, a rise of £1,235,376, or over 28 per cent. As to extravagance aforementioned, it is notorious, though no United members had the ! spunk to recall the fact, that the Mangahao hydro works were built without finding out if there Were ' enough water to drive the tur- i bines. Then the best part of £200,. 000 of the people’s money was spent on the “balloon loop’’ of railway near Dargaville, in Mr Coates’s own electorate. The loop, on which scarcely a train is tuning, cost £78,000 a mile, and the average cost throughout. New Zealand is about £38,000. Between Taupo and Rotorua public money has been spent in useless land which will grow no grass. The. Reform Party must share with the United Party the blame i for that.’ When Labour asks that the cuts be restored and standard wages paid, a Minister says it would cost thirteen millions, which, by the way, shows how much Ihe workers have been despoiled. From the way taxation has been spread, it would never be imagined that the latest, figures | show that 25,766 people in New i Zealand enjoy a total income of £26,000,000, whereas the 83,000 men. engaged in secondary Indus-, tries receive an aggregate of only I £14,000,000. ’ During the war in-

come taxation was increased, but the revenue has since been called on to the extent of £44,000,000 in returning those increases to the wealthy class. At the same time the Governments borrowed money. The non-Labour Parties’ idea is not to use taxation on the wealthy in order to obviate more borrowing, but to make the workers find the needful. It is emphasised by the Government that means of revenue which in 1921 yielded 55 millions, gave only 46 millions last year, and 36 millions this year, and that exports in the past year declined ten millions on 1930, while imports dropped 15 millions. It is a fact nevertheless, that while in 1919 the country’s total production was 851 millions, it was ten years later thirty millions greater in value—and yet in the latter year iharty people were approaching a condition of starvation. Even now the country is exporting more dairy produce than ever, while nearly

100,000 more bales of wool were exported last year than in the previous year. A sanctimonious tone is used by United and Reform members in reference to the present raid on reserve funds, made to save the wealthy from taxa*tion, but they doubtless recollect how Reform raided the accumulated surpluses of. fifteen millions to pay fancy prices for land to their friends. A Labour suggestion to meet contingencies such is the present—when the workers

are receiving Ten minions less than normally, meaning a total loss of 30 millions to the country — ; is that a .committee of representatives of Parliament, economists, farmers, business men and Labour should be set up to investigate the mechanics of the depression, iand that a national insurance fund might be established partly by an issue of currency. Such a fund would prevent the injustices inflicted on the workers and the destruction of reserves for other purposes. Mr Forbes says his Budget may prove historic, and Mr Downie Stewart says next year’s problem may be the lack of any reserves to raid. At anyrate, in that event, the big incomes will be no longer able to escape, and the electors have in the meantune a say in the matter. \