THE ECONOMIC CRISIS

Manawatu Standard, Volume L, Issue 251, 18 September 1930, Page 8

THE ECONOMIC CRISIS

TAXATION OF LUXURIES. FARMERS’ PRESIDENT’S VIEWS. The urgent need for measures to reduce the costs of primary production was stressed by Mr W. J. Poison, M.P. for Stratford, and Dominion president of the Farmers’ Union, in a speech delivered at Levin this week. He outlined the causes leading up to the present economic position and the factors standing in the way of its improvement, chiefly among which he mentioned tlio wage standard and the high Customs tariff. Mr Poison offered suggestions to remedy the existing difficulty. He favoured removing the duties from imports which may be classed as necessaries of life and those which aided the business of farming, and recommended that the revenue thus relinquished be made good by the taxation of luxuries, and, in particular, amusements. There was a large attendance at the meeting. Mr H. Denton, president of the Levin branch of the Farmers’ Union, was the chairman, and Mr O. P. Lynch, president of the Manawatu executive, was also on the platform. “I am no pessimist,” stated Mr Poison in his opening remarks, “and I hope that nothing I shall say will be regarded as pessimistic.” Throughout the civilised world, Mr Poison continued, .a process of re-adjustment was taking place. After the greatest cataclysm in history, values were returning to their old standards. Farmers were actually in the position where their operating costs were 37 per cent above what they were prior to the war. This being the state of affairs, he would say without hesitation that farmers’ costs would have to be brought back to tlie pre-war level if they were to return to prosperity; if they could not produce cheaply enough they could not sell the goods. The prosperity of New Zealand as a whole was measured by that of her farming industry.

TAXATION NOT A REMEDY. Taxation was not a remedy for the difficulties that were now in sight. “YVe are,” said Mr Poison, “adopting to some extent the method which Australia is adopting, to keep our Budget balanced: YVe are increasing taxation. A very much better way is to increase our economies. Economy is the only cure.” The extent to which taxation was being increased in New Zealand was more considerable than most people realised. The amount of the general taxation last year was £19,700,000 —an increase of one and a-half million over the previous year. This year the country was budgeting for more than twenty millions of revenue from taxation, at a time when pAJfits would bo reduced and people would bo less able to bear taxation. This was not the whole of the story, because the local bodies were also increasing their taxation; they expected to raise in rates this year £6,347,000. The load of general and local taxation facing the country was much greater than in the good times, and the position was on© that must be ended. The time had come to set the house in order.

“1 am not going to imitate the. ostrich,” Mr Poison remarked, “and refuse to see these facts. 1 want to plan things so that, in spite of these prices, we may be able to carry on with our industry without undue barrassment, and weather tlie storm. It means a courageous policy ; that public men must stand up to their responsibilities; that the Parliament must give a lead to the country —and I do not see any indication of such a lead.

“This Government has not even the courage to say to single men, who constitute 40 per cent of the unemployed: ‘You will have to take less than 14s a day.” Wages of that kind must come down first of all. We have had an Unemployment Bill before us. It is not a good bill; it is a gesture* to Labour —an attempt to provide soma sort of palliative lor the economic troubles before us —but it is no cure for unemployment at all. It is there due to tlie fact that politicians have funked the facts and are throwing the responsibility for unemployment on the shoulders of yet another board.” Mr Poison contended that in New Zealand there was undoubtedly an artificial wage rate. POOR LANDS JEOPARDISED. The Government had increased the receipts by means of a surtax and had raised the protective tariff by 40 to 67 per cent on some articles. There would bo increased costs as a result of that increase. There had already been a demand from one section of workers to the Arbtration Court for an increase of wages, and one of the main reasons given was that the tariff increase had caused a rise in the cost of living. Thus the vicious circle was pursued. “We have to get down to lundamentals,” the speaked added. “It is no use patching a battleship with a postage stamp. We have to apply reemdies, however unpopular they may be. There is a good deal of marginal land in New Zealand — and some of it in this district—which can be successfully farmed when prices are reasonably good and costs reasonably low. With the fall in prices, a good deal of that land will go out of production. At present, on our farms, increased production is more than overtaken by increased costs. We have to tackle costs, and wages, to some extent, will look after themA LUXURIES TAX. In dealing with possible remedies for the position, Mr Poison stated that what he had sought to impress on Parliament was that they might substitute a scheme of taxation which was adopted in many foreign countries—the taxation of luxuries. He would remove the tariff from all the things that the common people needed and so reduce through the Customs the cost of living by something like 27 per cent on the goods that came in. He had found that nearly half the total of things used in ordinary life were imported. By the method ho proposed, the average reduction in the cost of living would be about 10 per cent. That reduction would immediately re-nct on wages; they would fall 10 per cent at once, and the worker would be just as well off. The effect of bringing down the productive cost through cheaper imports would mean a still further fall in the cost of living, and so the pendulum would be started swinging in tho right direction. As a substitute for the two millions taken off the customs, he would place a tax on every form of amusement. He would also tax the growing liquor sales of the hotels, which at present only contributed £4O a year each, the amount of their license fee. A penny on every glass of liquor would bring in over £1,000,000. He would increase the taxation on foreign motor cars because New Zealand should trade, if possible, with the Old Country, which took its produce. He was in favour of the tax on foreign films, the increased tax on the totalisator — steps which the Government had taken and which he had proposed six months ago.