NATIONAL FINANCES

Manawatu Standard, Volume LIII, Issue 63, 10 February 1933, Page 7

NATIONAL FINANCES

NECESSITY FOR ECONOMY

SOCIAL SERVICES COUNTRY CANNOT AFFORD:

Per Press Association

WELLINGTON, Feb. 9

Mr A. S. Burgess, president of the Associated Chambers of Commerce, in a statement to-day said: “We were warned that the sales tax was coming ’and therefore we are not surprised, but the taxation proposals of the Government are a bitter pill without any sugar coating. “The Chambers of Commerce have expressed strong opposition to the sales tax and their aversion has been by no means moderated by knowledge of the fact that the raising of the exchange rate has thrown an extraordinarily heavy burden on the Budget. The major part of this burden is now being transferred to the commercial and taxpaying community generally, and already the taxation requirements of the Government have grown beyond what it was stated recently would be required. The office routine of business houses was thrown into contusion throughout New Zealand to-day and this is the sort of dislocation following the exchange rate increase that is dangerously retarding business recovery. The sales, tax system is most objectionable. It is an overnight impost and the only thing than can be done now is to ensure that it is adjusted to commercial practices with as little disruption as possible, although a great deal of expense and inconvenience are unavoidable in this connection. The Minister of Finance has promised to consult with the mercantile and manufacturing communities when the Bill is introduced. That is a reasonable attitude which the commercial community will welcome as readily as it has sought co-operation in the past. “The course that is being followed in national finance, however, is disastrous. The question is not what extra burden business can stand in order to support this sort of financial policy, but what steps the Government can take to relieve trade, industry and commerce from restraints and burdens already excessive. That aspect has been completely disregarded. The sales tax has only one virtue and that is that the rate of the tax can be easily reduced. It is more than ever the bounden duty of the Government to go back to the report of the National Expenditure Commission and effect every possible economy and reorganisation in State expenditure, chief among which is the elimination of many social services that the country can no longer afford. Just as quickly as these imperative adjustments are made so will taxation generally be reduced . If these taxes do not come down, then the country will know what to think.

“On the subject of taxes, however, there are some that we invite the Government to impose,” continued Mr Burgess. “Now, if ever, is the time when all State and municipal trading concerns should be subjected to the same taxes, rates and charges as are required by their private competitors. This will give a rich yield of revenue as well as remedy a long standing injustice to private traders. For that matter it will also bring home to the people a realisation of where the taxes fall. It is an enigma why this source of revenue has been neglected for so long in face of the reports of a Royal Commission and the example of England and the repeated representations tha-t have been made, unless it be from sheer expediency. These measures are essential if we are to achieve equity and get out of the wood.”

INCREASED TAX ON MOTORISTS,

DEPUTATION TO MINISTER

WELLINGTON, Feb. 10. Expressing the view that the increase of 3d a gallon in the petrol tax bluntly meant that motorists were being singled out for taxation confiscatory in its extent and grossly inequitable in its application, a deputation representing the automobile associations of New Zealand waited on the Minister of Customs, Rt. Hou. J. G. Coates, yesterday. Speakers pointed out that the total tax now paid on every gallon of petrol was four times the actual cost of petrol in one of the countries of origin. “The Government obviously, lias determined on the imposition of a sales tax, and we think it should be reminded that in Australia the actual return from the sales tax exceeded the estimate by £2,400,000, and, therefore, it is reasonable to suppose that a similar result will bo attained in New Zealand,” said Mr W. G., Walkley, secretary of the North Island Motor Union. “We suggest: (1) That instead of bleeding the taxpayer white to meet next year’s Government commitments in London the Government could relieve the taxpayer by borrowing a proportion of' its requirements in London, thereby spreading the burden of repayment and at the same time avoiding the present additional cost of settlement due to the 25 per cent, rate of exchange. “(2) That to relieve the unemployment situation a comprehensively planned roading scheme be put into operation, and, say, £1,000,0.00 of the Unemployment Board’s money transferred to the Main Highways Board and used for the purpose. This would result in work of permanent value being done, and in useful employment being provided for a large number of men.

“(3) That the possibility of reducing the national interest burden by. a conversion scheme be examined.

“(4) That a tax on local body trading and power boards should be considered, because apart from equities suclr a tax would be spread equitably. The tax would require to be on tile capital invested because otherwise it could be evaded by reduction in charges for the services. This would yield £500,000.” Mr A. E. Ansell, M.P., who introduced the deputation, drew attention to the serious deterioration of the highways through lack of maintenance, and stressed the importance of the Highways Board’s revenue being applied to maintenance, as it was poor economy to allow the deterioration to continue. In addition to this regard must be had to the fact that bridges were requiring replacement. In reply, Mr Coates said that he fully recognised the necessity of maintaining the roads in a proper state of repair and arresting any further deterioration. He realised that in placing an additional tax on motorists for the benefit of the Consolidated Fund lie was inflicting a heavy burden, but it was necessary that steps should be taken to avoid a serious deficit in the national accounts. It might be, Mr Coates said, that there were other means of adjusting tax also so that the burden would be more equitably distributed, and he would undertake an investigation as soon as possible. He fully recognised the strength of the argument used in regard to the law of diminishing returns, and lie would keep a close watch upon the consumption of petrol

in the Dominion with a view to taking appropriate steps in the event of any reaction which would adversely affect the revenue and trade of the country.. WANGANUI RESOLUTIONS. Per Press Association. WANGANUI, Feb. 9. A mass meeting of 1400 persons gathered at the Opera House to-night, many being unable to gain admittance. The following resolutions were passed unanimously : “That owing to the recently imposed exchange measures putting an extra burden on the already harassed worker, by further restricting his spending power, this monster meeting of Wanganui citizens urges the Government to repair its bad breach of faith by introducing legislation to suspend the operations of this Act. The meeting also desires to record its approval of the attitude of the local member in voting against the Government on this measure. “In view of the fact that the newly instituted sales tax will impose a further burden on the people of the Dominion, this meeting desires to enter an emphatic protest thereto, and desires that our member of Parliament vote against any further methods of taxation, even though they may mean the defeat of thp Government. “That the establishment of a Central Bank in New Zealand is inimical to the future well being of the people, in that it would increase the machinery of banking without increasing the efficiency, endanger future prospects of coming generations, and be generally detrimental to the country. The meeting is of the opinion that the Government should resign for a mandate from the electors before proceeding with its programme. “That we are of the opinion that a monster petition should be circulated, forwarded to the Governor-G'aneral, praying him to exercise his prerogative, and to call upon the Government to resign.” _ ■