EXTRA PRIMAGE DUTY.

New Zealand Herald, Volume LXVI, Issue 20324, 3 August 1929, Page 15

EXTRA PRIMAGE DUTY.

"THE EASIEST WAY OUT."

TAX WILL BE PASSED ON.

VIEW OF BUSINESS MAN.

"I think the commercial community should make whole-hearted and united protest," said Mr. H. T. Merritt, president of the Auckland Chamber of Commerce, yesterday, concerning the Government's action in increasing the primage duty by 1 per cent. Mr. Merritt said lie had discussed the new taxation with a number of business men in the city, and lie could not see the force of Sir Joseph Ward's contention that the increased levy was too small to be passed on to the consumers. "If the tax is so small that it cannot be passed on it will have to be borne by the commercial community, and, in that case, there is only one place where it can from and that is from profits," Mr. Merritt said. "Here trouble is encountered, for if profits are reduced, obviously the Government's receipts from the income tax will be less. The margin of profit that is prevailing now, particularly among wholesale importers, is so small that the addition of 1 per cent, to the primage will make a tremendous difference to their profit. If the tax has to be borne by the importers their profit, in many instances, will almost disappear. Anyone who today is making 2 per cent, or more profit on the net turnover is doing exceedingly well. Tax Becoming Permanent.

"It is obvious, therefore, that the added tax will have to be passed on to the consumers. And by the time the addition reaches the consumer it will not be merely 1 per cent., but anything up to 3 per cent. The addition cannot be split into tiny fractions in the retail trade. There is nothing to be gained by camouflaging the issue, for the weight of evidence is against the assertion that the tax will not be passed on. "Another aspect that we very much regret is that the primage which was put on as a war tax now appears to be assuming permanent form. We note the promise of the Prime Minister that the extra tax is for one year only, but that is only a promise, and one wonders what will happen if he is called on next to find ways and means of balancing the next Budget. It must be recognised, of course, that the Government has not been in power long enough to study thfc whole question of taxation with .a view to removing some of the anomalies that exist. Probably by the time the next Budget comes along, if the present Government is in power, it might have some scientific taxation proposals to make. At the present time it scents to have chosen merely the easiest way out." Government Trading.

Mr. Mcrritt added that the Chamber of Commerce was very pleased to note that the Prime Minister had decided to make the State Fire Insurance Office and the Public Trust Office pay land tax and to charge the Post and Telegraph Department customs duty on its imports. This would place some of the trading departments on a more equal basis of competition. with private institutions of a similar nature. The chamber was glad to see that the Prime Minister was redeeming his promise that the inequalities between State and private trading would be removed.

That the extra 1 per cent, in the primage duty might have the effect of checking imports, with consequent benefit to local New Zealand manufacturers, was the opinion expressed by Mr. George Finn, president of the Auckland Manufacturers' Association. He thought increased local production would reduce manufacturing costs and that the added duty was too small to pass on. In another quarter, however, it was pointed out that the only local manufacturers who would benefit were {hose who used almost exclusively raw materials produced in New Zealand. Imported materials would be subject to the duty.

MANUFACTURERS' VIEW.

"PROPOSALS REASONABLE."

[BY TELEGRAM. —PRESS ASSOCIATION'.] WELLINGTON. Friday.

"The wiping out of a deficit of £577,252 and the making of provision for increases in expenditure in almost every department is a problem that demands very careful consideration," said Mr. F. Campbell, of the New Zealand Manufacturers' Association, when asked for his views on the Budget. "The proposals are no more than the Government could expect to collect and no less than they could safely ask for to carry on the business of the country.

"The proposals to placo Government trading concerns somewhat nearer, as far as taxation goes, to private concerns will be universally ondorsed. I think the manufacturers of New Zealand will agree that the proposals are reasonable and should not interfere with tho prosperity of New Zealand."