THE New Zealand Herald AND DAILY SOUTHERN CROSS. WEDNESDAY, SEPTEMBER 29, 1915. THE REVISED TAXATION.

New Zealand Herald, Volume LII, Issue 16035, 29 September 1915, Page 6

THE New Zealand Herald AND DAILY SOUTHERN CROSS. WEDNESDAY, SEPTEMBER 29, 1915. THE REVISED TAXATION.

The fear that a National Government, _. supported by an almost un-

animous parliament, would prove to be quite indifferent to reasonable

criticism has been happily proved mistaken by the alterations made in the Taxation Bill. The public received the general, scheme of increased taxation with approval, recognising that the problem was a difficult one and that in some way or other the revenue must be increased to meet unavoidable departmental losses anc\ enhanced departmental expenditure. As a matter of fact the dominating feeling has been that the taxpayer of the Dominion is for the time being at any rate escaping more lightly than was expected. It was, therefore, only the incidence of the

scheme which excited criticism, and this of the friendliest character. As though in reciprocity for the kindly

reception of its original proposals the Government has met reasonable objections in an equally reasonable way. The main objection was to the tax on kerosene and petrol, which was opposed not by users of pleasure motor-cars, who are generally quite prepared to pay, but on behalf of the industries to whom motors are power and oil is fodder. It was speedily made clear that during the past decade the employment of " oil-engines and motorengines has vastly increased and that innumerable facilities for production and transit, essentially economical and advantageous to the

'■ community, would be undeniably affected by the proposed fuel-tax. Fishermen and farmers, urban and rural carriers, with small industrialists of every description, would thus have been taxed in the oppressive form of an increased charge upon their actual operations. Sir Joseph Ward appears not to wholly accept these contentions, but acknowledges the feeling of the country. Even the compromise suggested has not been claimed; the entire fuel-tax proposal has been withdrawn in consideration of the impossibility of distinguishing between kerosene and petrol used for industrial purposes and for pleasure. The increase in telephone bureau fees has also been wisely waived. The threepenny fee is sufficiently high and the doubling of this would certainly restrict use, giving very doubtful results at the cost of public convenience. The proposed tax on non-alcoholic beverages cannot for the present be collected owing to lack of data and method. The very fact that the taxation proposals in the aggregate were not considered excessive is conclusive evidence that the public appreci-

ated the situation and that the National ; Government had teen exceedingly moderate in its demands. It, therefore, followed that since the Government absolutely required a specified increase in revenue to carry on the public business and to meet a portion of the war charges, the amount conceded in advisable concessions would have to be provided for by other taxes. Kerosene and petrol were estimated to yield £194,000, increased telephonebureau fees £20,000, and nonalcoholic beverages £20,000. The most genial Minister for Finance can only readjust burdens when he foregoes such forms of collection in deference to public opinion or' because of collection difficulties under existing circumstances. The adjustment is made by still further increasing the beer duty—which j many members advocated in the I Houseand which now is estimated to yield £78,000; by levying a 1 per cent, primage-tax on all imports, which may yield £200,000; and by a reconstruction of the mortgage tax and of the income tax as it affects mortgagees.

An important consideration in the revision of the proposals was the discovery that the amount to be expected from the extension of income tax to farmers had been over-estimated by some £80,000. Many who were assumed to be liable are found to be exempt, so that the anticipated £250,000 from this source is reduced to £170,000 which large farmers are expected to provide; the burden of the consequent readjustment is more than borne by mortgagees. An additional farthing-in-the-£ is added to the mortgage tax, an impost expected to yield £65,000, and precautions against any escape of mortgagees from paying full income tax are estimated to produce another £30,000, making £95,000 of additional revenue from this source alone. In commenting upon the revision we may point that the National Government has been compelled by force of circumstances to adopt half of Mr. Beauchamp's early recommendations in the form of the 1 per cent, duty on all imports, and may next year find it convenient to adopt its corollary of 1 per cent, on highly-priced exports. It will be interesting to observe whether the opinion that such a small percentage on imports will not be passed on to the consumer

is borne out by experience and in any case it is safe to predict that a 1 per cent, export tax on produce, which has been Increased in value by the war, would not be felt as in any way, oppressive. As the war continues and as the needs of national finance grow upon our Administration it is well for the public to become familiar with " other ; , avenues" of taxation so that the greatest possible revenue may be raised from time to time with the least possible disturbance of commerce and industry.