TAXATION SPIRAL

Hokitika Guardian, 12 August 1937, Page 2

TAXATION SPIRAL

COSTS OF GOVERNMENT

OUTLOOK FOR TAXPAYER

The gilt on the review by the Acting Minister of Finance of the substantial; increase in State revenue for the first quarter of the current financial year is taken off by the concurrent and substantial expenditure increases shown in the annual votes ? particularly 'under the heading of social services (says a statement by the Associated Chambers of Commerce of New Zealand 1. There is little satisfaction to the taxpayer in swelling State revenue with gruelling taxation, in the knowledge that h» has small prospect, of taxation relief, but is only preparing further rods for his own back.

ADDITIONAL PUBLIC SERVANTS

The Minister could have dealt much more fully than he did with the further expenditure. necessary to meet a full vear’s charge for increased {tensions, which, together' with a 'full vear’s charge for the restoration of Public Service salaries and wages, and reduced working-hours in various State setvices. will necessitate additional expenditure this year of something in excess of three ’a'uartcrs of a million nounds. The Minister could also have mentioned the taxation which will he neressarv to float the pending national health insu»*n,ee and national stfnoramination schemes. However, these things are not all. It is now reported to be the in+entjon of, the Public ißerrice Association to seek increased salaries in tbo Government service yas - soon as the present investigations into general regradin,r. are comn]eted. The official organ of the Association savs. “it has to he borne in mirnl that, the existing salarv scales are below the scale levels which existed in 1920. and that in .view of the mounting living costs, the restoration of 1920 salary scales would be fully Justified as a bare minimum.” Here is emerging another consequence' of recent legislation. Without entering into the merits of tbe Public Service claim, the position of the taxpayer is that he has bad. to par an extra £5,687.000 in taxation in 1936-37 over the previous year to provide' for expanded. Government services. Part of this money was needed to pay not only restored salarv and wages cuts, but also salaries and wages 't# a considerable number of the 3,700 additionad employees who were added to the State- par-roll. The PiibLo Service , Association, basing its ease on ■ mounting living eosts. i«. now preparing to secure improved salary scales. . which.; :p will, -mean another bill for the taxpayer.

Tn 3935-36 the total, salary and wages of tbe Government emnlovees, in round figures, was . £11,000.000, • Tn .1936-37 it went up to approximately 013.000,000. fill is .figure; (includes salaries and wages '-in - ''respect of Government departments which are no charge or. taxation-; such as the Post Office, Piiblie Trust'Office, Government •Insurance Office etc. Salaries and wages tactually- ebp£gdblc on taxation ’*i ] q 36-37 totalled approximately £5.,740,000 pet. Tn addition to this would, be a sum in • resnect of tbe ra i I wars, which do not pay'full interest on capp Taj. the balance beiivr a ebarce rib taxation. tTlie amount paid bv the ••nilwavs toward interest on ea.njt.nl .'»y i°36-37 was £147,000 jess than in 193536). ''; \/ . 3'; . ' \

TAX 'BILL UP 4() PER CENT

. All things combined, the taxpayer is being forced up the taxation spiral, and his prospects of relief are negligible .under the present rate of Government expenditure. As regards Public Service salary scales, the country must have a Public Service, and the members of it should be paid as well as" the country can afford in relation to the services rendered. The Public Service Association caii be expected to nut '‘•he case for the Public Service to the Government ably enough, but it should ‘hen be for the Government to consider very . seriously a few facts, namely, that : n 1921-22 Go which, vear the Public Service looks as regards salary scales), f bere was a considerable smaller Public. Service.; that the cost of Government- : u that year was £28.000.000. ns romnnred with £34,885, OCT) Vn 19-56-37; that the population of’ New Zealand has 1 ’ •nyreased bv, 25 per cent over .1920-21.: hut the amount raised in taxes has. increased bv 40 per,cen+. There is .a limit tr> taxation—-the Government said ’t bed been reached before even to-dav’s level was arrived at—and tbe posTtipn then is that if expenditure is increased 'h one-direction, it must be made un c nv a reduction in expenditure in some other direction.

The Public Service makes tbe plea that laws are tbmst on it bv the Government and Parliament to administer. and that this inevitably leads to •in exoansion of Government, in expansion of Government departments. There is no question as to “be validity of this anniment. but tbe Public Service Commissioner, in his annual report to Parliament in 1920, after saving that legislation and tbe work of post-war reconstruction had necessitated considerable expansion of staff, went on to state ; “In addition, there seems to be a tendaney on the part of some departments to endeavour to expand their operations apd staffs, the reasons for which are not so apparent;”