TAXATION LEVEL

New Zealand Herald, Volume LXXV, Issue 23083, 7 July 1938, Page 15

TAXATION LEVEL

LABOUR DEFENDED PROBLEM OF REDUCTION MR. RICHARDS' ARGUMENT [BY TELEGRAPH —SPECIAL REPORTER] WELLINGTON, Wednesday The view that the Opposition was clamouring for reductions in taxation knowing all the time that they were impossible was advanced by Mr. A. S. Richards (Government —Roskill) during tho Address-in-Rcply debate in the House of Representatives to-night. All the arguments of the Opposition, said Mr. Richards, were based on the fear of staggering taxation and the menace of socialism, but in pleading the case of private enterprise they were telling only half the truth. They held Great Britain np as a model, but neglected to state that in five years the Baldwin Government had subsidised three industries to the extent of £.'5.'5.000,000. That did not inspire much confidence in private enterprise. Costs in Industry Opposition members also moaned about rising costs, he added, but the fallacy of their arguments was demonstrated by the fact that in manufacturing industries wages represented only Jo per cent of costs. It was a fact that in proportion to annual turnover business firms were doing better to-day than they had been doing for tho past 2o to .'SO years. "Opposition members talk about the crushing burden of debt and taxation," Mr. Richards continued. "The present Government is not responsible for that. Under the late Mr. Massey the public debt advanced from £84.000.000 to £227,000,000. Mr. Coates pushed it up to £2.51,000,000, and tnen Mr. Forbes gave it a further increase to £282,000,000. Question lor Opposition "The two major items of Government expenditure to-day," said Mr. Richards, "are debt services, absorbing 28 per cent of revenue, and social services, absorbing 21 per cent. The Opposition say they will not reduce expenditure in those directions. "Will they make reductions in the expenditure on defence, highways, maintenance of public works and services, civil service superannuation, assistance to private and secondary industries and returned soldiers' pensions? If they do not reduce expenditure in one or more of those instances they will not be able to reduce taxation by one threepenny bit in the pound."