The Grey River Argus TUESDAY, AUGUST 24, 1948. JUSTICE OR EXPEDIENCY?

Grey River Argus, 24 August 1948, Page 4

The Grey River Argus TUESDAY, AUGUST 24, 1948. JUSTICE OR EXPEDIENCY?

CONSIDERING the fact that employment has long' been at a maximum, and the demand for labour in excess of the supply, it must be conceded that this Government has fostered industry and production in an unprecedented degree. Compared with any preceding period, the past thirteen years have seen relatively the greatest output of commodities. Those, therefore, who contend that the budgetary policy has suddenly become adverse to the family are counting; only upon a degree of gullibility in some sections of the icommunity. The income tax concession is questioned on the ground that it has not sufficiently discriminated between the family and others, whereas a graduated concession would have favoured the wealthy, and an exclusive concession would have been a discrimination against many of the young people to whom the country must look for the families of the future. As things are, the faniily benefit in New Zealand compares more than favourably with any elsewhere, but those who talk of incentives for greater production have often in mind taxation concessions merely for the owners of the means of production and distribution. If the income tax concession means little for some, the reason is that they already are burdened little with income taxation. The suggestion that tax allowances should ignore family benefits implies that the source of these might be restricted, because in the degree that others on lower income levels would be taxed their capacity to contribute would be lessened. It is late in the day to find the family quoted by the Government’s critics for special consideration, when it is borne in mind that it has been since 1935 that the greatest consideration in this direction has been shown, alike in benefit-s and tax concessions. If the population increases now at a greater ratio, the reason is that the family has been specially favoured over a period of years. To say that youngpeople generally would devote any remission of taxation only torecreation is a very unfair imputation.

Even in the capitalistic camp ■there are those who declare that the bringing of our pound to par with sterling is a good thing. It is a just course, and when all sections of the people are comparatively prosperous, any other course would have an element of injustice, one which might have been less when exporters were hard put, but greater when they certainly are not. If there were any mere expediency in an exchange disparity, it would be when it was instituted —as it was in the dead of night, early in 1933 —and it is quite illogical to assert that restoration of value is. itself only an expedient. When a plea for families, which depend mainly on earned income, is accompanied by another plea that such income should be taxed on a par with unearned income, the question suggesting itself is whether the family is the real consideration, or rather one of the “incentives” that are quoted so often. It is on a par also with the suggestion that inflation is to be countered by reducing spending power,

which in this case spells wages. There is no guarantee that recipients of unearned income will not use it in an inflationary fashion. In preference to discriminating against young people in the matter of a tax concession, there is a case for it as regards people of larger incomes, despite the likelihood that this might be iregarded as lessening their incentive. The flat rate concession, taking everything into consideration, is probably as fair a thing as any. It certainly gives consideration to the largest number, and of that number the vast majority are people of moderate income.