THE FACTS OF THE CASE

Nelson Evening Mail, Volume LXXI, 11 September 1937, Page 3

THE FACTS OF THE CASE

TAXATION AND PENSIONS

In a statement dealing with economic conditions in New Zealand the Prime Minister has had something to say about the yield of taxation and the purposes for which increases were made by his Government last year (comments the “N.Z. Herald”). With Mr Savage’s genera! proposition, with his denial that there are portents of immediate disaster, there need be no quarrel. But in referring to his readjustment of taxation he said it was deliberately designed to yield revenue sufficient to meet the increases in pensions granted by the Government. In this he was following a claim made in the last Budget, but it was shown then, and needs to be repeated now, that this was only part of the story. The Minister of Finance stated in the Budget that the additions to the pensions bill would cost £1,710.000, and he expected to obtain by readjustment of income-tax and land tax scales slightly more than £1.800.000 to meet this new demand. His complete estimates predicted a taxation yield £4.895,000 greater than in 1935-36, and of this total income tax and land tax combined were expected to contribute £2.260.000. The remainder, leaving these two out of account, would have amounted to £2,635.000. or more than enough to have covered the £1.710.000 pensions increase for nine months quoted by Mr Nash, or the £2.100,000 mentioned by Mr Savage presumably lor a full year. Actual results exceeded these expectations. The accounts for 1936-37 show that land and income tax returned £2.267,000 more than in the preceding year, ‘hat aggregate taxation was £5.335.000 higher and that, with decreases from some other sources covered, total revenue was £4,975.000 greater. Thus the increased cost of pensions, ns estimated, would have been amply provided for had no change been made in the method or incidence of taxation These are the facts of the case.