THE H.B. TRIBUNE. WEDNESDAY, SEPT. 27, 1922. EASING THE LOAD.

Hawke's Bay Tribune, Volume XII, Issue 243, 27 September 1922, Page 4

THE H.B. TRIBUNE. WEDNESDAY, SEPT. 27, 1922. EASING THE LOAD.

The announcement made by Mr. (Massey in '.the House yesterday with regard to his taxation proposals will be hailed with welcome by all who have the prosperity of the country intelligently at heart—even by those who deem themselves very unfortunate in having no direct taxation to pay. The substantial nature of the reductions that are suggested in both land anil income tax wifi, we fancy, come ’as something of a pleasant surprise to most, but are fully justified by the conditions under which they are made. Indeed, it was quite obvious that only something that would make a distinctly appreciable difference to the overburdened taxpayers was worth while considering, and this, no doubt, the Minister has taken into account. The changes he now submits for Parliament’s approval consist of the complete abolition of the, existing surcharges of 20 per cent, upon income-tax and the reduction of that upon land tax from 20 to 10 per cent. In considering this distinction between the two forms of tax it has to be remembered that, when making his rebates last year, the Finance Minister allowed a discount of 10 per cent, on the land tax, but only 5 per cent on the income-tax. The position has now been reversed, and it may be easily enough argued that this is scarcely consistent. The incomes upon which tax will have to be paid have been very much diminished practically all round, in many cases disappearing altogether. On the other hand, the valuations upon which the land-tax is calculated have, speaking generally, remained A/here they were, although it is very manifest that the real values as gauged by capacity for making profitable return have in a great number of cases, indeed in almost all where holdings are concerned, fallen to a very serious extent. The land-tax this year will thus be levied on a false basis which operates strongly against the taxpayers.

However, it may not be wise to look over critically and analytically upon the concessions that are offered, and it may reasonably 7 be advanced that the remission in in-come-tax will have the greater effect in the way of restoring the industrial activity of the country and thus of benefitting the greatest number. It may not be that the effect will begin to show itself very speedily, 'for with most there is now a pretty long leeway to make up before we can as a community make a fresh start. But the actual relief now given, coupled with the hope of its being continued and increased, will without doubt prove an incentive to those who have for some time now been regarding the struggle as so well-nigh desperate as scarcely to be worth the making. Beyond this, we may entertain some hope that such loose capital as may still be available in the country’ will find some encourage-, ment to seek outlets in the extension of existing or the opening up of fresh development enterprise, while new money from abroad may

also be tempted to come our way. All this should mean that the spectre of unemployment that haunts so many’ should gradually be laid and general prosperity restored. Ere very long, too, the effect upon the cost of living should begin ito make jitself apparent, for undoubtedly the crushing taxation that has had tfl be met is one of the most serious factors in keeping up prices. It is not, of course, to be expected that the suggested reductions will meet with verbal approval all round. The Official Labour group of members, whose one idea is to tax private capital rapidly’ out of existence without holding out any rational immediate alternative means for the conduct of our industries, may be relied upon to attack the proposals upon the ground that capital is being relieved at the expense of labour. How far they’ may hold this view with any sincere conviction cannot, of course, be said. But it is a popular cry among those from whom they seek to secure votes, and so they are sure to give it voice. There cannot, however, be any- real doubt about the absolute necessity, as the world’s affairs are now carried on, that there should be some method of accumulating capital in such amounts as to provide the means for developing industries along broad and continuous and stable lines. Labour leaders, in this country at any rate, have as yet given us no practical indication as to how they would propose to accomplish this end.. The relatively’ feeble efforts that have been made in the way of co-opera-tive undertakings give no very great encouragement to think that they’ are capable of achieving much in this direction, while probably at the same time showing a want of confidence in them, perhaps only subconscious, on the part of their followers. For the time being, at any rate, whatever may be in store in the more or less remote future for a socially’ reorganised world, private capital will have to be nursed and encouraged to lay itself out to the general advantage. The present is certainly no time for experimenting in revolutionary reforms. These, if they are to come at all, will have a much better chance of working out towards ultimate success when general prosperity is revived. Meantime, the lifting of taxation will leave the more to be spent in wages, and so operate to the advantage of the worker as well as of the employer. In truth, the worker is the more likely to secure the earlier benefit from it, for it will take some little time for the average employer to work off ihe ‘ dead horse” which oppresses him. Even when the reductions take effect our maximum rate of incometax will still, we fancy, be the heaviest in the whole of the British Dominions, while the exemption in favour of the earners of small incomes is the highest. As for the land-tax, it is probably without parallel in the world, while here, too, the exemptions in favour of the smaller men are most liberal.