TUESDAY, AUGUST 28, 1917. SIR JOSEPH WARD ON FINANCIAL POLICY.

Hawera & Normanby Star, Volume LXXIV, Issue LXXIV, 28 August 1917, Page 4

TUESDAY, AUGUST 28, 1917. SIR JOSEPH WARD ON FINANCIAL POLICY.

In another column we reprint a fuller report than that previously received of the speeoh Sir Joseph Ward mad* by way of reply tn justification of his Budget proposals. It seems to us to be convincing in respect of the main points upon which, the Budget ha« been attacked. [For instance, we ar© afraid that, equitable as the excess profiti tax may hare been in theory, one cannot longer contend that it should b« continued. Apart from the anomalies that were patent and which everyone agreed must be got rid of, though everyone did not agree that oh aooount of them the whole principle should be given up, there were other difficulties which had to be met. The report of the Commis eioner of Taxes sets out quite olearly some of these difficulties. In the firßt place he declares that } while taking into consideration proceeds which did not come to aooount last year, the estimate for last year of £2,000,000 may in the end be realised, so many modifications have been proved to be necessary that he is assured that a similar tax this year could not be safely gemmated to bring in even one million pounds. That, of course, ie a difficult hurdle for advocates of the tax to negotiate. The information will come as a great surprise, we have ne doubt, but the statement is accentuated by the declaration of Sir Joseph Ward later on in his 6peech that the large profits of which so much has been heard in general terms have not been realised in practical experience. The increased revenue from exports, he point* out, has to be considered as partly cancelled by the realisation of stocks. He further stated that the profits in certain activities which been generally thought to be phenomenal had really been of quite moderate percentage. It is difficult to realise this in view of the great advanco in prices, but jt ie juet one of those matters in respect of which. responsibility and authority rest with the Finance Minister, and his etatements must be regarded as conclusive. Then the Commissioner pointed out that the excess profits tax threw upon tho Department a great burden of labor and the exercise of a discretionary power which on principle it was undesirable for an administrative office ■to be clothed with. So, by reason of its insufficiency as a revenue producer, its inequitable incidence, and ife unsoundness constitutionally considered,

the tax failed to justify itself and had to go. Then as to the continuance of graduation of the income tax beyond the present limit of £6400, it seems it is simply impracticable unless the State is to kill the goose which lays the golden eggs. The tax on tea, it will be seen, was justified, and perhaps, despite all that has been said about the cost of living, we shall be fortunate if war finance does not yet necessitate an extension of indirect taxation similar in character. The question of mortgages and the landholders' liability to taxation is evidently complex and difficult, but nevertheless it cannot be just to tax a man on the value of the land he nominally owns and give him no relief in respect of the debt which he ! is subject to in respect of that land. Unless there can be amendment of the law here great hardship will be done to small landholders, and it will be but poor consolation to be to! 3 that they must be so taxed because the resources of the Government would not be equal -'to preventing evasion in other quarters if mortgages were exempted. On the general question of high taxation Sir Joseph was compelled to warn some of the "faddists" that their nostrums would be most harmful if adopted. The future as well as the present has to be considered, and one of the prime factors in the situation is that, while it is necessary to impose very heavy taxation, it is also most necessary to give capital due opportunity of fructifying so that it shall be able to bear the burden now and hereafter. He was able to assure the House that i the big taxpayers were not "squealing," but he might have added that, while they were showing this properly i loyal spirit, they could not be expected to do so if a time of difficulty were made more difficult by compulsory imposts deriving their inspiration from \ class hatred and envy or cheap "gallery" politics. The only conclusion to be drawn from the general tenor of | Sir Joseph "Ward's remarks is that, in his opinion, the whole financial posi- j tion needs to be handled with great circumspection. By courage and coolness the country will pull through | quite well, but if we are wise we shall j all take warning from Sir Joseph's speech that the present Budget may j not have made the last call on the re- ' sources of the community.