MR H. S. BOURN’S COMMENT

Lyttelton Times, Volume CXVII, Issue 17198, 19 June 1916, Page 9

MR H. S. BOURN’S COMMENT

MANY SATISFACTORY FEATURES.

Mr H. S. Bouni. president of tlio Canterbury Chamber of Commerce, expressed general satisfaction with the Budget. The surplus and the increase of revenue were satisfactory points and the. repeal of the mortgage tax and the imposition of further income also good features. He favoured the proposal to limit the raising of house rents and the proposal to establish a. commission to inquire into tho secondary industries of the Dominion. At the same time ho thought it equally advisable to consider means of fostering the primary industries of the 'Dominion, particularly wheat-growing. He did not favour the guarantee of a iixed price io growers, as that meant interference with the law of supply and demand, but a Government subsidy, so much per bushel, would meet tho ease, Ii would encourage production of a vitally important commodity, and if a large exportable surplus should ho available the resultant revenue wouhr benefit the Dominion as a whole. THE LOAN PROPOSALS. The now loans proposed were no doubt necessary for carrying on war expenditure. but in regard to tho proposed internal loan, he felt that every penny of the money available in tho Dominion should be used for assisting and fostering the resources of the country. An internal loan, in his view, would tnko money which could bo much better emplovcll for the purpose lie had indicated. fie did not agree with the proposal that two millions of profits should be invested in Imperial Treasury bills, practically putting the money into a reserve fund. This money should he used to develop the public resources of the country, either by way of pushing on with public works or fostering the industries of the country. Similarly, if a local loan were to be raised it should bo for public works or tho development of industries, using the profits of the Dominion within the Dominion for the benefit of tho Dominion. The money which would have to ha borrowed for war purposes might well be kept all in one channel.

Tho investment of the Dominion's profits iu Imperial Treasury bills set v.liat ho considered to be a wrong example to all big companies aiul wealthy individuals. Company balance-sheets and the banking returns showed that both companies and individuals were at present placing unprecedentedly

largo suras to reserve, and this at a time when the money could bo most usefully employed in the Dominion, Ho was sorry that the Budget made no mention of any plan for fretting these reserve funds and making them available for use within the Dominion. INCOME TAX EXEMPTION SHOULD m .cm The consistency of a large increase of expenditure, in the form, of increased pay for Civil .Servants was questionable, and bo did not favour the system now in vogue under which omnlovers were asked io pay higher wages on the seers of the increased cost of living, while at the same time paying war taxation to which the people who got the benefit of the 'increased wages contributed nothing. The income, tax exemption should bo reduced to .£l3O, as in .Britain, instead of placing the burden of war taxation on the shoulders of tho few. The earner of a small income was in no different position in regard to Customs taxation than before the war and could not claim exemption from war taxation on that score. The proposed "> per cent surtax on incomes should have been made a graduated oiu'. Its object was to raise money and graduation would have attained that purpose. Had the Government graduated the. suiifax and relied upon this method for getting at, war profits it. would have been working on more efficient, lines than tho methods which the Budget forecasted. DIFFICULTY OF TAXING WAR PROFITS. Tho proposal to tax war profits to tho extent of 45 per cent was easier to enunciate than to carry into practical effect. It would lie extremely difficult to gauge tho profits from primary products. If the difference between this year’s profits and the average of tho two preceding years were taken as the basis, the difficulty that would at once arise would be the fact that tho majority of. primary producers bad little accurate knowledge of their position prior to last year, and the authorities could hardly judge equitably unless they accepted mere estimates of past income.

So far as the farmer was concerned, the Income Tax Department had only commenced to call for details concerning liis transactions since the war commenced. and prior to the war the farmer was under no obligation to keep records which would dearly show, his nosition as required bv the new regulations. There was therefore no data available for a comparison of war profits with pre-war profits in the case of flic farmer. TAXATION ON AMUSEMENTS.

Ho favoured some taxation on amusements; not heavy, as in war time such enterprises played their part in alleviatin'! depression, hut it. must ho remembered that such a tax mould ho practically a voluntary one. Those mho d'd not want to pay ir need not attend the picture shorn, the theatre or other amusement.

Any limitation of tho amount of interest which could he paid or charged would ho dangerous and inadvisable,. ns it would interfere with the operation of the law of supply and demand.