THE New Zealand Herald AND DAILY SOUTHERN CROSS. THURSDAY, DECEMBER 16, 1921. TAXATION AND WASTE.

New Zealand Herald, Volume LVIII, Issue 17965, 15 December 1921, Page 6

THE New Zealand Herald AND DAILY SOUTHERN CROSS. THURSDAY, DECEMBER 16, 1921. TAXATION AND WASTE.

Taxpayers have been looking anxiously for the overdue statement on Government. economies. This morning they.are confronted instead with the announcement of additional taxation. Mr. Massey has in a measure foreshadowed the increased amusement and racing taxes,. but his recent utterances have not prepared the country for income tax at ithe rate now proposed. Since the opening of the session he has frequently promised a " reduction " on inconio tax. This was very generally understood to be a reduction on paper only, but it was anticipated that the Government would endeavour to make it substantial. The highest rate of income tax so far paid in New Zealand is Is 6d in the £. Last year a new scale running up to 8s 9d was introduced, and the promised reduction, now put into concrete form, amounts to a waiving of 6 per cent, of this impost. The net result to the taxpayer on the highest scale is a tax in the neighbourhood of tenpence greater than last year. With this final decision in front of them taxpayers will be mare impatient than ever for an immediate announcement of the Government's plans for limiting expenditure. The time for vague generalities has passed. If the Prime Minister will accept a word of advice which is intended to be helpful he will reduce the vital facts and figures to memorandum form and so avoid the ambiguity which has clouded all his previous references to economy. The salient points on which the country desires information are the revised estimates of revenue and expenditure for the current financial year, with the anticipated surplus or deficit, the gross amount of the proposed economies, and the period within which they will be realised, and the figure at which ii is proposed to balance the Budget in a*"normal" year, that is after the economies have become fully effective. It is grotesque that all this information should still be lacking after eight and a-half months of the financial year have elapsed, and the discredit attaches both to Parliament for not demanding the facts and to the Government for not volunteering them. Mr. Massey has developed such a bad habit of making parenthetical and extempore references to finance, of avoiding details and specific figures, and of using the most casual and ambiguous phraseology, that few members Of Parliament how attempt to follow him'and no''one outside the Treasury could pass an elementary education on the public finances. Whether the Prime Minister has good or bad news to impart to Parliament he should at least endeavour to make the facts plain and dispel the fog in which the economy proposals are shrouded.

A comparison of some of Mr. Massey's recent references to finance will illustrate how hopeless it is to attempt to draw definite conclusions from them. In the Budget delivered six weeks ago he estimated the revenue for the 1 current financial year at £28,000,000, and the expenditure at £99,266,367, leaving an anticipated deficit of £1,266,367. The Finance Committee of the House has since reduced the estimates of expenditure by £260,116, involving the contraction of i the deficit to £1,006,251/ The Prime Minister now says! very definitely that he anticipates a surplus., Does he mean that the actual receipts for the twelve months will exceed the outgoings, or is he relying upon the cash balance of £4,920,294 available from last year to provide the "surplus]" Up to the end of October the expenditure exceeded the revenue by £4,346,659. At the corresponding date in* ttfe previous year the revenue was £653,346 behind, and the Treasurer finished with a surplus of £6,132,232. He had the benefit that year of a land and income tax yield of £9,937,923. The yield for this year was estimated in the Budget at £2,200,000 less, and Mr. Maseey seemed to

jconfirm this estimate last night by his statement that the 5 per cent, rebate represented £300,000. In any case the returns are in the Tax Department, and the Prime Minister has so much information at his hand that he need not leave the country for a day in doubt as to whether he is predicting a real surplus or a " surplus" resulting from the cash balance with which he commenced the year.

j Upon the vital question of economy I Mr. Massey's utterances are equally | confusing. The Budget estimated the expenditure at £29,266,367. A fortnight later the Prime Minister stated that economies totalling £3,295,361, presumably per annum, had been agreed upon, of which items totalling £1,500,000 were then I in operation. In addition Mr. ; Massey forecasted furthei? savings of ] £2,000,000, making a gross total of £5,295,361, and said that more was necessary. The Finance Committee of the House was able to'pare the ■ estimates of expenditure by only ,£260,116, leaving them nearly i £1,000,000 above last year's expenjditure, which suggests that despite ■ all the talk of millions the economies are perspective rather than actual. Mr. Massey's latest version of his : financial adjustments, given in the 1 debate on the Loan Bill on Tuesday, ! is that he plans to save £4,000,000 land increase the revenue by £2,000,000. The economies are j shrinking, and it is rather amazing : to find Mr, Massey forecasting such a large increase in revenue after all his talk of reducing taxation. The income tax, which falls to be paid a few weeks hence, is higher than ever before. Additional taxes ai> e being levied on racing

and amusements. The new tariff, mean's an extra £1,000,000 to the Treasurer, and ■ probably this esti-mate-shbuld tbe increased in viey of the later amendments to the schedule, In endeavouring to balance his Budget, Mr. Massey is piling up taxation, direct and indirect, without regard to the economic strain he is thereby placing upon the country. The war was oyer three years ago. Taxation should, at the latest, have been reduced when the prices of exports fell. Instead, it is being increased, in a haphazard and unscientific fashion, when the very crisis of the depression is upon us. This is the price New Zealand has to pay for the failure of the Government to grapple with the extravagance and waste which are still so rampant that the Prime Minister talks airily of saving £.1,000,000 or £6,000,000, according to his humour. It must be said, with all deliberation, that the country deserved better of its statesmen at this junoture of its history.