UNEMPLOYMENT TAXES

New Zealand Herald, Volume LXXV, Issue 22966, 18 February 1938, Page 8

UNEMPLOYMENT TAXES

Payers of wages tax and levy will be interested to note that the Government collected in "emergency" unemployment taxes, during the nine months ended December 31, a sum of £1,039,153 more than was spent on relief during that period. Including the balance of £253,245 brought forward from last financial year, the fund was therefore in credit at December 31 to the amount of £1,292,398. The people, many of whom can ill afford the deduction of 8d in the pound from wages or to pay the annual levy of 20s, have a right to ask what is the Government's purpose in piling up these huge credit balances. If the idea were to build up resei-ves against a rainy day, it might well be approved. But the Government does not believe in saving, nor will it admit the possibility of harder times in the future. Why, then, does it continue to subtract purchasing power from the people, taking far more money than is needed 1 Part of the credit, a sum of £650,000, is invested in securities. This seems a strange way to deal with taxes supposed to be collected to meet "emergency." To judge by the figures recently gazetted, there is little doubt the full year will close with an even larger credit balance. With that in hand, the Government could well remit a considerable part of the "emergency" taxes. The levy could be abolished, involving the loss of £400,000 to £500,000 in revenue, and the wages tax be reduced to 6d or 5d in the pound, involving the loss of a further £1,200,000 to £1,800,000. Even so, the fund's annual income should exceed £3,000,000, or more than sufficient to maintain the few thousands that Mr. Armstrong asserts are all that are genuinely unemployed. In any case, any shortage could be meb out of the reserves, which at March 31 should exceed £1,500,000. The people can fairly and reasonably demand some such measure of unemployment tax relief. No present reason exists why the Government should continue to tax their earnings at the existing high rate.