INTERNAL CREDITS

Grey River Argus, 16 February 1933, Page 5

INTERNAL CREDITS

INSTEAD OF TAXES Labour’s Policy ALTERNATIVE TO COALITION'S. (From -Our Parliamentary Reporter . I 'AR 1.1.\ MENT BUILDINGS, February 15. Six propositions were placed before the members of the House to-day by Mr M. J. Savage (Deputy Leader of the Labour Party) when discussing Labour’s alternatives to the Government’s toliey of taxation, anil especially in relation to the sales impost. An internal issue of credit and if currency amounting to £12,000.000 for use in reproductive work, was referred to The points outlined by Mr Savage iv ere:— (1) The Government policy of increasing the taxation in any form for the purpose of meeting abnormal payments on transactions which, at best, cannot increase the Dominion income, but- which must depreciate New Zealand currency, is not warranted. (2) The Government policy of maintaining a huge army of able-bodied men in questionable forms of employment. by means of taxation in any form, and especially in the form of taxation, as in the case of the Sales Tax Bill, and the unemployment taxes, which taxation is paid mainly by the poor classes, is uneconomic and is likely to lead to wholesale default on the part of citizens. (3) Labour’s alternative proposals include the Issue of Credit and .Currency within New Zealand to an extent equal to the amount -of the inflation of the exporters’ credits in London — £10,000.000 or £12.000,000 —such money to be used in reproductive employment. (4) To the extent that goods and services can be increased in New Zealand as the result of such employment, there, can be no inflation or depreciation of the currency, as is the case with the Government policy. (5) In addition to providing remunerative and reproductive employment. and guarding against any de preciaticm of currency, such proposals would increase the amount of money in circulation in New Zealand, and could not possibly interfere with the exchange rate, which should operate according to trading conditions. (6) Labour’s alternative proposals would remove the necessity for taxation in any form for the purpose of guaranteeing the banks against loss and of maintaining the huge army of mon and women who are being forced into the position of being liabilities instead of assets to the State. In elaborating his points Mr Savage said that the Sales Tax was a charge on all of the people, and it fell most heavily on the poor, because it was a tax: on the necessaries of life. Taxation, he said, was already overdone, and it was being levied for purposes that were quite foreign to the ordinary routine of national economy and expenditure. No one would say that the. huge amount at present being levied for the relief of unemployment came within the ordinary expenses of the State. In maintaining the public services for many years it had been the policy of both Parties to the Coalition Government to reduce the direct taxation that was paid by the comparatively wealthy and increased indirect taxation whch was paid by the comparatively poor. The Salos Tax was a contribution to that form of taxation. The increase in the rate of exchange had had the effect of depreciating the currency in New Zealand to that extent without in any way increasing the incomes of the people as a whole or of increasing the amount of goods for sale. As an alternative to this increasing of the exchange, the Government, under the emergency conditions, should issue from £10,000,000 to £12,000,000 of credit for the purpose of putting willing workers to work nt reproductive work.