DOMINION FINANCE

Otago Daily Times, Issue 21360, 13 June 1931, Page 12

DOMINION FINANCE

ro run editor Sir, —In your leading article on Dominion finance and the non-success of the loan in London, you state that our proximity to Australia was one of the factors against success. Is it not rather that the investors realise that, financially, we .are in as bad a position as Australia? Mr Forbes has promised us extra taxation. Why did he not delay the issue until hie proposals were known, so that the investors at Home would know if we were in earnest in our endeavours to balance the Budget? Promises from politicians are like piecrust, and investors are taking a leap in the dark while the Dominion’s finances are in their present chaotic state. Then you state that Australia’s conversion loan is a breach of contract. What greater breach is it than our Government’s 10 per cent, cut, when the cost of living index did not justify it? Or what about the breach of contract under the Unemployment Act? When that Act was passed it was implied to mean a full week’s work or sustenance would be paid. What do we find? The unemployed must work, and do not even receive as much as was promised in sustenance. At Home unearned income pays a heavier income tax than earned income, whereas there is no differentiation here. What a field for taxes! What an opportunity for Mr Forbes to justify his 10 per cent, cut! If the Government were to put a 10 per cent, tax on all existing internal loan interest, mortgage interest, etc., what an addition to the revenue we would have! There would then be no need to cry out for more ways of meeting the deficit, and the workers would have more heart to carry on if they realised that the 10 per cent, cut was general, and that they were not the only class to suffer.;—T am, etc., Dunedin. June 11. Scotty ■

[New Zealand is not in ne bad a position as Australia. The deficits of the Australian Governments for the current year are estimated at £31,000,000. On a population basis the New Zealand Government's deficit would be about £7,000,000 to equal that of the Australian Governments. In the year lately closed it was nominally £1,639,111, but the expenditure included a payment out of revenue of £1,207,058 in reduction of the public debt, and it included, also, advances to other accounts of £132,900. There, was no breach of contract in the 10 per cent. “ cut ” nor under the Unemployment Act, which has broken down simply because the Unemployment Board was not supplied with sufficient funds. “ Unearned ’’ income in New Zealand is taxed more heavily than earned. “ Scotty ”is greatly mistaken if he supposes that the 10 per cent, “cut” is not fairly general.—Ed. O.D.T.]