HIGH TAXATION

Otago Daily Times, Issue 23353, 19 November 1937, Page 10

HIGH TAXATION

INCREASED EXPENDITURE ASSOCIATED CHAMBERS’ STATEMENT REPLY TO PRIME MINISTER PERTINENT QUESTIONS ASKED (Special ro Daily Times) WELLINGTON, Nov. 18. “ The comments made by the Prime Minister (Mr M. J. Savage) on the statement in which we tabulated the numerous directions in which State expenditure has been increased are disappointing,” says a statement issued by the Associated Chambers of Commerce of New Zealand. “It is not, as the Prime Minister says, ‘ a plain case of juggling with figures for the purpose of political propaganda,’ ” the statement continues. “ First, there has been no juggling with figures by us, and, secondly, we reserve the right to criticise the actions of the Government. We have exercised that right just as fully with past Governments, as the Prime Minister well knows

“ The matter of the enormously increased Government expenditure and taxation is of prime interest to the commercial and general community, quite apart from questions of politics. As taxpayers, we set out to show that the increased and additional social service benefits were not the only cause of taxation and were not alone accountable for the increased expenditure this year. “ We thank the Prime Minister for pointing out that to preserve the purpose of the table which we compiled certain deductions should be made from the increase shown in the health vote on account of certain increased social benefits in this division. It would appear that these benefits are represented by a sum of approximately £295,000 (subject to correction by the Prime Minister). Viewing this amount in relation to the increased expenditure —a total which* we showed at £4,449,962 —we cannot take seriously the suggestion of the Prime Minister that we ‘deliberately misrepresented ’ the position for the sake of a sum equivalent to less than 7 per cent, of the total figure we gave. The Prime Minister says ‘ the total is nothing like £4,000,000,’ but he does not correct our figures in any direction other than the health vote. Question of Expenditure “On the adjusted total of £4,154,962 of increased expenditure covering 30 different departments and divisions, the only comment that the Prime Minister makes is in respect of public works maintenance charges and social service administration costs. In regard to the first of these, the Prime Minister speaks of the necessity for proper maintenance charges and with this we readily agreed in our original statement, as we agree now. The Prime Minister suggests that in fairness we might have deducted these charges from the figure given for increased Government expenditure. The only reason that we did not do so was because the table was for the purpose of listing the expenditure increases on items other than increased social service benefits, but, as we mentioned, both the maintenance charges and new capital expenditure were included.

“ In this connection we have not contested, and we do not contest the justification for expenditure on aerodromes and emergency landing grounds, which the Prime Minister mentions, but the question of financing arises. Must this expenditure have been charged against the Consolidated Fund? Could not the resources of the Employment Promotion Fund, estimated by the Government at £5,180,000 this year, have been called on instead?

“ Colossal Sum ” “ The Government is planning to spend this year the colossal sum of more than £ 18,000,000 on public works, financed partly from the Employment Promotion Fund —a programme which ought to be severely curtailed during the present time of prosperity and largely reserved for times of depression. Aerodromes and emergency landing grounds could be financed to-day at the expense of the less immediately necessary and desirable works and without the taxpayers being called on to the extent they are at present through the medium of both the Consolidated Fund and the Employment Promotion Fund, Taxation under one or other of these heads could surely be reduced, if a more modest public works programme was adhered to. “ Secondly, the Prime Minister objects to our including in our table the increased costs of administration in the social service departments, and says that it is not legitimate to separate these from the social service benefits themselves. It is surely of great importance to the public to know what are the growing costs of Government administration. • Is not the Prime Minister concerned about them? Be cause they relate to social services is no excuse for possible extravagance. That there is good ground for feeling that there is extravagance is shown by the fact that the cost of unemployment administration, despite the reduction in the number of unemnloyed and the relief which the Employment Fund has had in other ways, shows an increase of £127.600, or 63 per cent over what it was two years ago. while the number of employees has increased by 310. or 36 per cent. A Potential Danger “ The Prime Minister makes no comment on the increased costs, amounting to £3,447,000 (less cost of restoring wage and salary cuts), spread over the 24 other divisions listed. Is lie satisfied that the in creases /are justified and that economy is being observed, in view of the fact that the taxpayers have had no relief from the old taxes nor from the emergency taxes of the depression (except for reductions in the rate of the unemployment tax : n 1934 and 1935), nor yet from new taxes imposed last year? A widelyheld opinion is that the heavy structure of annual expenditure which is being erected by the Government represents a potential danger in the event of a fall in the export income of the Dominion."