THE TAXATION OUTLOOK.

New Zealand Herald, Volume LXVII, Issue 20537, 11 April 1930, Page 10

THE TAXATION OUTLOOK.

The announcement that six Ministers of the Crown will take an active part in the Parnell election contest raises expectations of a thoroughly comprehensive exposition of the Government's attitude in regard to various important matters upon which no enlightenment has been furnished for many months. The chief of these is, of course, public finance, and, for reasons that scarcely need elaboration, the Government will presumably not neglect the opportunity to indicate its intentions regarding borrowing and taxation. In respect of the former, reference may appropriately be made to the advice of Mr. Pembcr Reeves that the financial outlook "'requires resolution and prudence, but these will be forthcoming the moment the electorate calls for them." The Government may, however, be sufficiently persuaded of the necessity for caution to give a lead to public opinion rather than to await its pressure. Mr. Reeves has also offered counsel in regard to the raising and the spending of annual revenue, advising that it would be "more judicious to curtail expenditure in a moderate degree." There could not be a more dispassionate expression of the policy for which the electorate has been vainly calling for many years—that reduction of expenditure and relief from taxation which were among the "liberal promises" made by the present Government and in respect of which it has so greatly disappointed the electorate. To the remote observer it may appear that more revenue could easily be furnished by a community in which the standard of comfort is high, but closer investigation shows that the present scale of taxation is sapping the foundations of the country's prosperity. According to the returns of incomes liable for taxation, progress has been arrested in recent years. That is particularly illustrated by the taxable earnings of companies engaged in commerce trade or business and in industry or manufacture, the aggregate figures for the last five years having been as follows :

Commerce. Industry. 1924-25 ■ • £6,195,4.39 £5,027,066 1925-26 . . 6.847.729 2.748,654 1926-27 . . 6.444.067 3,207,325 1927-23 . . 5,872.255 2,808,774 1928-29 . . 5,917,824 2,758,522

There is nothing in these figures to suggest that commercial and industrial enterprise have made vigorous progress during the period ; on the contrary, they demonstrate a condition of stagnation, if not of retrogression—exactly the results which successive Parliaments and Governments have been warned would be

produced by the continuous exaction of onerous taxation. Its effects have inevitably been widespread, and, by judicious inquiry, the Government would discover a close relation between heavy taxation and unemployment. The United Party claims direct descent from the party in which Mr. Reeves played a leading part: now from the detachment of a London banking chamber he has sketched a financial policy for the Dominion's immediate needs. The election campaign will give the Government opportunity to say how nearly it agrees with this independent mentor and to expand the outlines into practical details.