THE BUDGET SURPLUS.

New Zealand Herald, Volume LXV, Issue 19959, 30 May 1928, Page 10

THE BUDGET SURPLUS.

Presuming the equitable application of taxation, the weight is of greater importance than the method, and while variations in the instruments of taxation were proposed by the last conference of the Associated Chambers of Commerce, its representations regarding the burden of the present scale of ta2.es were not less urgent. The reply by the Minister of Finance to these resolutions was devoted chiefly to the administrative aspect, and, so far as it touched upon the major consideration, avoided an issue upon which an explicit pronouncement has repeatedly been sought. The Associated Chambers of Commerce directly challenged the continuance of taxation at a high level to produce surpluses for redemption of debt. Mr. Stewart simply replies that "the steady pursuance of this policy of reduction of deadweight debt" has produced certain results, ostensibly advantageous. He again evades the point whether it is either necessary or within the capacity of taxpayers to continue this policy. Mr. Stewart has always discussed the question in terms implying that the results he claims are due to the devotion of Budget surpluses to debt redemption, as though the statutory appropriation of revenue from taxation to that purpose were insignificant. Yet it is misleading to suggest that the Dominion's only provision for the discharge of deadweight war debt is the variable amount available in the Budget surplus. Why does the Minister not give equal prominence to such factors in maintaining the country's credit as the provision for the discharge of the Imperial funded debt by annuities out of revenue: the accumulation of £5,000,000 Of sinking funds against war debt, before the new redemption scheme was in-

fcroduced, and the fact that under the 'latter the whole of the balance of war debt will be discharged in less than 60 years by the application of revenue? The Budget includes nearly £1,500,000 for debt redemption annually, in accordance with statutory provisions that were carefully drawn, both to ensure the repayment of debt within a reasonable period and to secure to the present generation some relief from the burden of debt charges. Mr. Stewart's policy is to accelerate the rate of redemption and to maintain the dead weight upon taxpayers. For the first time he has admitted in this statement that there is a "question of what proportion of our capital requirements should be provided out of revenue." That alone does not convey much enlightenment. What is required is that the Minister should say explicitly how much more than the present statutory requirements ought to be drawn from annual revenue for debt redemption. If he would do that —and have his endorsed by amendment of the legislation—the way would be clear for determination of the amount of surplus available for the reduction of taxation.