EXCESSIVE TAXATION.

New Zealand Herald, Volume LXIII, Issue 19372, 6 July 1926, Page 10

EXCESSIVE TAXATION.

The official return of taxation collected in the last financial year shows that there is ample' scope for the Government's professed policy of progressively reducing taxation, as a means of stimulating enterprise and reducing the cost of living, while both the .amount of taxation and the state of the national finances make it difficult to understand the suspension of that policy that was announced at the opening of Parliament. Taxes of all kinds have produced £17,255,000, which is higher than in any of the four preceding years, exceeding the average for that period by nearly £1,000.000 The total has been exceeded only once, in 1921-22, when customs receipts were inflated by abnormal importations to such an extent that part of that year's revenue was officially regarded as legitimately duo to the Budget of the following year Customs duties in that abnormal year were £8,408,726; last year they were £8,573,388 —or, excluding the special duty on tyres for main highways, £8,383,877, which is £814,488

above the total for 1924-25. The net result is that taxation has increased by 4s 6d per head of population to almost exactly the rate two years ago, ,so that the measures of relief proposed in the last two Budgets, modest to the point of timidity, have not really reduced the burden of taxation at all. The Government's decision that it would be unwise to make further reductions was attri buted to "the probability of a substantial fall in the revenue." That pessimistic view has dominated the financial policy for years ; the Government has always encouraged anticipations of lower taxation until the last moment, when it has as often discovered the danger of revenue falling. For this reason, promised concessions were curtailed in 1924 ; the revenue showed an increase of £682,630, and instead of the forecasted deficit of £292,000 there was a Burplus of £1,243,000. Again last year, the Budget promised at best balancing of the accounts; the actual result was a surplus of £1,150,000. A very fair estimate of the financial position may be obtained by a comparison of the last Budget and the Treasury accounts. The Minister of Finance forecasted that at' March 31 there would be a credit balance of £3,151,190 (nearly £1,000,000 less than at the beginning of the year). Although payments totalling £1,539,757 were njade in reduction of debt, transfer to Public Works Fund, and an entirely unnecessary gift to the Railways Department, the balance in the account was actually £4,428,092. It must be presumed that when the Government passed the Budget last year it was satisfied that a balance of £3,151,000 was a satisfactory provision against any adverse circumstances in 1926-27. Now that it has gained £.1,277,000 beyond its expectations, it is extraordinary that it should promptly claim that surplus as a reserve against intangible dangers, instead of immediately devoting it to the relief of the very real burden of taxation borne by the country. The very fears that the Government expresses should compel it to dispel the risk of depression by a bold policy of reducing taxation to the lowest possible, scale.