NATIONAL GOVERNMENTS TAXATION PROPOSALS

Horowhenua Chronicle, 7 October 1931, Page 7

NATIONAL GOVERNMENTS TAXATION PROPOSALS

Flat Rate of Foorpence and Tax on Unearned Incomes. ~ Graduated Land Tax Abolished. To Be Replaced by Farmers’ Income Tax. ' I Another Million a Year to be Saved in Public Services. S. ■ n ' I. ' The widely-discussed and anxiously awaited Supplementary Budget was introduced by the Finance Minister, Hon.. W. JDownie Stewart in the House of Eepresentatives last evening. Though not as revolutionary as. most , of the prophets had predicted the Budget imposes some additional heavy burdens on the taxpayer and provides for further economies in the public -service. . , The main items are:— /Abolition of the graduated land tax and further assistance :to primary .producers. Increased assistance to Hospital Boards. £1,000*00.0 economies in the Public Service. Flat rate tax of 4d in £ on incomes (with £SOO exemption); Additional tax of 2d per gallon on petrol and 8d per pound cut and plug tobacco. * , Emergency tax bn unearned incomes. Further unemployment tax (not yet specified).

WELLINGTON, Last Night., The' Supplementary Financial Stateimeht for 1931 was delivered before the .House of Representatives by Hoh. W .Downie Stewart (Minister Of Finance) this evening. Mr. Stewart said; “The necessity for a Supplementary Financial Statement, arises from the fact that conditions have been and are -changing so rapidly that it • is impos--eible to peg down as reliable .any estimates of revenue. -Hence, if the dm in our public finance is to be checked, remedial measures must be applied ■whenever it is clear that further delay .means further danger. “No one can say what will be the economic position six months hence, -•particularly in view of recent happenings in Great Britain. ‘ Many people think that conditions in the Old Wort have now reached a stage when farreaching measures of an international -character will be taken that will lead to a substantial recovery in prices. If -.so, our difficulties will be automatically -eased. But in < the meantime 1 must budget on the facts as I find them. “It will be remembered by honourable members that my predecessor, in the Budget ’presented to the House- on -July 30, was faced with the problem of meeting an estimated prospective deficit of no less than £6,850,000. Thissum, ,it was hoped, would be providr -for by stringent economies, reductions in salaries and wages and the use of reserves and other items amounting to £5,056,000, leaving £1,800,000 to be provided for by additional taxation. This ..additional taxation was to be gained ■to the extent of £730j000 by income tax, ,:and the balance was to be met by Customs and Excise duties and stamp duties.

found from .some source for this purpose. “The great problems with which the country is faced are, therefore, the precarious position ,of the farmer, |the position of the public finances and the jgreat and chronic problem of unemployment. These problems are inextricably interwoven and they constitute a menace to the whole stability of our social organisation.

“Although it is only about two months since the Budget was presented, it has since become fairly obvious that the shortages in revenue will be -.even greater than were allowed for by my predecessor, and it is, now clear that -the Budget will have .to be strengthened by a further amount. The Customs revenue for the first six months of the financial year is already about £750,000 the estimate on a proportionate basis. There is very little prospect of this deficiency being made good by heavier importations during ttye coming months—in fact, the 'shortage is more likely to increase. The increased duties imposed by the Budget and cal- • culated to yield about £900,000 are not likely to meet the position. “In addition to this drop in Customs revenue, it is probable that falling land values will affect death duties to a greater extent than was anticipated. Further, it' is now estimated that the revenue from lands-—interest on mortgages, rents, etc.—-will show a falling toff greater than was allowed for in the Budget. "Finally, I may say that the Budget estimates include £930,000 on account of interest on railway capital, but the interim figures so far available show that this item can only be realised by the most rigid economies and by attempts to fortify railway revenue. “It is therefore practically impossible •to form any proper estimate of what the Budget revenue will be when the financial year is finished; It is clear, however, that Substantial assistance w£p require to be found from somewhere if there is to be any hope of checking the present drift and- balancing the national accounts.

“Tlie only methods available for the purpose are further economies, further taxation and further recourse to any funds which are available. < “But over and above the Budget problem there- is imperative need - for rendering some assistance to the farmers if they are to stay on the land and if production is not to decline rapidly and, indeed, if we are to avoid a national disastser in a general breakdown of tbe farming industry. “While prices of primary products remain at their present level It is, of course, impdsslble to restore the farming Industry to a •condition of prosperity. But in so far as it is possible to assist the -fanner, it IS in the interests of tbe whole coimxiunity that funds be