H.B. TRIBUNE FRIDAY, AUGUST 21, 1931 MORE TAXATION.

Hawke's Bay Tribune, Volume XXI, Issue 212, 21 August 1931, Page 6

H.B. TRIBUNE FRIDAY, AUGUST 21, 1931 MORE TAXATION.

The fact that the Current discussions of national finance in the Old Country are avowedly directed towards the “re-estab-lishment of Great Britain’s credit” in the eyes of the world lend them quite sufficient interest to be closely followed even <aut here. Whatever the eventual outcome may be, we may be sure that, according to its nature, it will work either to assist or to retard our own recovery. That is inevitable, for, though local factors have, of course, a great deal to do with our troubles, they are also in large measure a reflection of the evils that have befallen the Motherland. It is therefore worth while considering the further instalment of the British Government’s remedial proposals afforded us to-day through its official press organ, the ‘‘Daily Herald.”

In the first place, we may note the smaller “economies” it is proposed to effect, such as a sub. stantial reduction in the Ministers’ own salaries, and in those of the judges, and of the higher grades in the Civil Service, in State educational institutions and the police force. These, it is said, are to be followed by “a series of departmental economies,” the nature and extent of which are not yet indicated. It will depend very much on this latter category as to whether the economy side of the account, as so far revealed, will really have much weight in adjusting the balance. On the other hand, we find that the princial economy recommended by the parliamentary committee—a substantial reduction in the scale of unemployment insurance benefits—has been entirely rejected. As, according to the committee’s report, this was was to affect more than four-fifths of the “savings” at which the committee aimed, it will be seen that in this respect their report has met with very short shrift. So far as the “dole” is concerned the only relief that can be looked for is in the promised checking of the widespread “abuses” that have developed in the system. It may well be doubted whether a Labour administration, with a general election always threatening, will

take any very drastic action in that direction. Some five or six weeks ago an amending Bill was brought down by the Minister of Labour professing to deal with so-called “anomalies” in the Unemployment Insurance Scheme. But great care was taken to retain its application and operation in ministerial hands, which would no doubt deal very gently with prospective voters. It would look therefore as if the main feature in the Government’s proposals will be the extra taxation which they will have to levy in order to make up the still remaining deficiency. As to this the customary Labour recourse of increased direct taxation is apparently to take a prominent place. This will necessarily impose upon industrial undertakings a substantial addition to the heavy handicaps under which they are even now struggling to maintain their place in the race for the world’s limited markets. The almost inevitable result will be that some more of them will have to gp under. So the army of the unemployed will be swelled, thus calling for yet further taxation wherewith to sustain them. It is now hinted that the import duties, which were previously foreshadowed as having a place in the Labour Government’s scheme of “rehabilitation” and which might have afforded some protection and encouragement to home industries, will not mature into operation. A noteworthy suggestion is to impose a special tax upon “interestbearing securities.” This would presumably extend to all Government loan stocks, and there cannot but be some wonderment as to how this would affect Mr. Snowden’s plan, mentioned in yesterman’s message, for seeking a voluntary conversion of war loans at a lower rate of interest.

A cable received as we write speaks of the first ministerial conference with representatives of the other two parties, but it gives no information as to how the Government’s proposals were received, so that we have yet to learn what prospect there may be of any hearty co-onera-tion from those in opposition in Parliament. It can scarcely be expected that all the projected plans will meet with anything like cordial approval.