THE FACTS OF THE CASE

New Zealand Herald, Volume LXXIV, Issue 22820, 30 August 1937, Page 8

THE FACTS OF THE CASE

i In a statement dealing with ! economic conditions in New Zealand the Prime Minister has had some- ! thing to say about the yield of taxai tion and the purposes for which j increases were made by his Government last year. With Mr. Savage's general proposition, with his denial that there are portents of immediate disaster, there need be no quarrel. But in referring to the readjustment of taxation he said it was deliberately designed to yield revenue sufficient to meet the increases in pensions granted by the Government. In , this he was following a claim made in the last Budget, but it was shown then, and needs to be repeated now, that this was only part j of the story. The Minister of Finance ! stated in the Budget that the addiI tions to the pensions bill would cost ; £1,710,000 and he expected to obtain J by readjustment of income-tax and { land tax scales slightly more than | £1,800,000 to meet this new demand, j His complete estimates predicted a j taxation yield £4,895,000 greater than in 1935-36, and of this total | income tax and land tax comj Bined were expected to contribute I £2,260,000. The remainder, leaving ' these two out of account, would have amounted to £2,635,000, or | more than enough to have covered ! the £1,710,000 pensions increase for j nine months quoted by Mr. Nash, I or the £2,100,000 mentioned by Mr. Savage, presumably for a full year. : Actual results exceeded these exj pectations. The accounts for 1936-37 j show that land and income tax re- | turned £2,267,000 more than in the j preceding year, that aggregate taxaj tion was £5,385,000 higher and that, : with decreases from some other I sources covered, total revenue ! was £4,975,000 greater. Thus the increased cost of pensions, as estimated, would have been amply provided for had no change been made in the method or incidence of taxation. These are the facts of the case.