FARMERS’ REACTION

Otago Daily Times, Issue 23884, 11 August 1939, Page 5

FARMERS’ REACTION

PETROL TAX COMMENT FURTHER BURDEN ON PRODUCER " POSITIVE ACTION ” MOOTED STRICTURES ON GOVERNMENT - There was no doubt about the attitude of the quarterly meeting of the ■ council of the Otago branch of the : New Zealand Farmers’ Union yesterday toward the taxation increases in the Budget brought down by Mr Savage last week. The meeting confirmed th. protest that had already been forwarded and adopted further resolutions, and it was most emphatic in its strictures on the increased petrol tax. It was maintained vigorously that the additional ~4d a gallon ’tax Was simply a further burden on the farmer artd the consuming public. There could be no hope ot any relief from such burdensome taxation' as long as the Government persevered with such ah extravagant, , public works policy, said the president (Mr R. S. Thompson), and among the motions /carried was one protesting emphatically against the fact that there was no indication in the Budget of anv retrenchment in the public works policy He suggested that, the farmers might be : forced to. unite in positive action to ■ save their industry. A Farcical Position v When the subject of the increased i taxation, was reached 1 Mr W. Lee started the ball rolling by commenting that the! Budget just showed how "farcical the whole, position was as it concerned‘the farmer The Govern■•ment had-appointed a Royal Commission „, to investigate the position of ■ - sheep termers and then added taxation -that hit the back-country, sheep men harder than anyone else. 1 On the' motion 'of Messrs .R. H. Michelle arid Af Spoor, the protest : which-had been, sent on to .Wellington was endorsed. It read as follows: a “The council; lodges an ■■■ emphatic protest against the, action of the.. Gov- ’ eminent in‘increasing the petrol tax by 4d a gallon grid thus further addr ing to tiae heavy burden of costs which farmers have' to; carry. Because of their iaolatiofi, many' fawners are absolutely dependent .upon motor transport and the new tax will bear upon them particularly ■>. heavily. Possibly no other class of the community except commercial users will be so seriously affected by the new tax. The extra charge, will also affect the costs of the many petrol-driven, tractors, stationary engines arid other farm- implements now; in use at a time when difficulty is already being experienced in making ends. meet. Crippling taxation and other increasing costs due "to Government legislation can be paiu only at the expense of such things as necessary repairs to buildings, fences, gates, or expenditure upon drains, moxious weeds, rabbit control, etc. To;day much of such necessary expenditure is being curtailed,. with . the re-: gult that the.-/farms concerned are wastirig assets and production will be reduced more than ever. “ This newimpost must inevitably lead to an increase in transport charges on lime and fertiliser, arid will further /adversely: affect the position pf farmers on second or lower class land and this again ; will tend . to reduce production. ‘'lncreased transport charge* will be forced oh County councils, 'wiiO will pass thii on In the form,, of higher taxation; to? the farmer. It appears obvious -.that the- Government is blind to the effect .which thyse increasing 'Costa .mwl yhayp on . the primary producer, who„|;i responsible, 'for the igreatiesi proportion of the couri;tr.y f s*: Thb'bbunfcil -Views”the position .With very -grave, concern randdesirea:io registeir .an emphatic ' protest f Effect of Petrol lax i To'illustrate the effect of the additions to' the petrol , tax, Mr. Spoof said (that a-few years ago the cost of transport, to his property at Pine Hill was ,75,. a. tori. .Eighteen months ago it went up to 10s, ‘arid, now he had been informed it would probably be 12s. > ’“ Who -is most affected‘by this petrol tax?*’ lie asked. “It is not those who use cars for luxury or the commercial people. The, latter pass it on, but the .farmer and -the consuming public cannot pass it any further.” A member: Aren’t you getting the guaranteed price? Mr Spoor: I am, not. ,If 1 were, I would sing out; for an increase quick end lively. Without 'a doubt -it was the farmer and the consuming public that had to pay, and no orib/else. '.Lee said. Positive Action by Farmers? “ In view of the position to-day, I’m afraid we are only at the beginning of extra taxation” said. Mr Thompson. “ Every farmer who has studied the Budget must . realise that mounting taxation'in this country is affecting and must continue to affect adversely his financial position* and that if the present trend is . not checked and every effort is-not to deduce considerably taxes that directly and indirectly bear iso heavily upon the primary producers, their future is not pleasant to contemplate. It would- appear that farmers throughout. New Zealand may be forced to, unite, to take some positive action in order to save their in- ’ -'; . ; .No one. had stated'the effects-of excessive, taxation better than-President Roosevelt, who said in October, 1932: “ Taxes are paid in the sweat of every, rnan who labours because they are,a burden on production and can be paid only, by production. If excessive, they are reflected in idle factories, tax-sold farms,.: and hence rthe hordes of the hungry tramping the ,streets and seeking jobs in vain/ Our workers may never see a tax bill, but they pay in deductions from wages, in increased cost-in what they .buy, or in broad cessation of employment. There is not an unemployed man—there is! not ,a struggling farmer—whose : interest in this subject is not direct and vital ” One-third of Production This year’s excessive State taxation of £41,000,000, Mr Thompson went on, irieant that •. about one-third. of the country's production would be taken from the people in taxes. How could the farming 'community' expect to be prosperous l under such conditions? The Government would take from the taxpayer money that could and would be spent to far better advantage by the individual himself. For example, no private individual could tolerate in these days the employment of -from 800 to 300 men making .tracks for hikers around Christchurch. By the end of this year, the National Debt of the Dominion with its 1,600,000 people would have reached £32o,ooo,ooo—equal to an average of £2OO a person, and the highest In the Empire. Australia’s figure for last year was £lB5, England’s £176, South Africa’s (for the white population only) £127 and Canada’s only £63. New Zealand’s State taxes for the Sear . 1913-14 totalled £5,918,000,: but iat had increased last year to the amazing figure of £37,787,000. The average taxation for. a family of four f n 1913-14 was £2l. but this year it would exceed £ 100—a fivefold increase in 25 years.. “The fact that farmers and stock and station agents owed £2.649,000 more to the banks in March of this year than they owed lit March, 1937. gives some idea of the drift that has taken place in the farming industry,” he went, on. “It is -a position that. must be, largely accounted for by excessive taxation and rising costs. - ' Bridging the Gap “ Last year’s ■ overseas exports, £57,887,000, were insufficient by £7.000,000 to!pay for imports costing £54;408,Q00, Plus debt and ..freight Charges of £10,500,000. This gap will be further wldexied by £6/00,000 required annually for loan repayment over"' tb« next five years, so that a

gap of £13,500,000 will have to be bridged by reducing imports, or by increasing returns from overseas exports, or by a combination of both. It is a commonplace that no good was ever derived in the long run from restrictions to reciprocal trade. Obviously New Zealand’s way out of her difficulties is to concentrate on increased returns from her overseas exports, and it certainly is not helpful to find the Government increasing the cost of production by raising the petrol tax by 4d a gallon. This must ultimately increase the cost of road transport; and. following the recent 10 per cent, increase on railway freights, is a. very serious matter for backblocks settlers.” When assessing the amount of taxation that the primary producers were able to bear, he continued, it had to be- .borne in mind that their produce was sold in open competition with the world’s produce. Further, the woolgrower had to face competition from artificial wool, now equal in quantity to the entire clips of New Zealand, Australia. South Africa and England, while the meat exporter was restricted in the quantity that could be exported to the United Kingdom. He fell that the unsatisfactory position of the primary producers justified the strongest possible protest against the excessive taxation levied under the latest Budget.. “ Personally,” he said, “t can see no way to alleviate the position other than the freeing of the exchange.” i.:', Fixing the Exchange .Mr Michelle: Freeing the exchange would only put off the evil day When criticising the Government, it was only right that constructive criticism should be put forward Mr Thompson said. If a better method of bringing relief than freeing the exchange could be suggested il should be very welcome. Mr T. Stockdill: Certainly it would give, immediate relief but when the last, Government was in office the Farmers’ Union advocated the raising of the.exchange. Mr Lee: The only other way is a reduction in costs. If the exchange were lifted. Mr Spoor said, a good deal of the money would remain In London because “the Government would collar it to pay its debts.”' It would mean prosperity for a while but not in the lone run. Mr James Begg suggested the remedy was that the exchange should be fixed at a level which would balance exports and imports, and he nointed out the danger of increasing costs unless protective tariffs were reduced proportionately. .(“ Hear, hear.”) Fanners’ Petition The circulation of a petition expressing the. dissatisfaction of the farming community with the taxation position was, mentioned, and it was agreed that it was a responsibility of tbe Dominion Executive, to undertake such a protest or .to ask all branches to forward protests. A motion was carried accordingly, asking the Dominion Executive.- to arrange if possible for a comprehensive protest- against , the petrol tax increase to be lodged by every branch of the union and of the Women’s Division. ■ v ’ ■ “This Government- is hardened agiiiflst' protests,” a member said. “They just bounce off; There is no question but that money has to be raised someho'w,” Mr Michelle: WelL why don’t farmers cu t put their; .telephones, and wireless sets? This is the only sort of protest that would be, Understood. Public Works Expenditure Mr Thompson: I thinlf we * should protest, as . strongly as we know how to against-the-very big public works expenditure. There cap be .no hope Of any relief until, that is reduced. The meeting agreed with him; and on Mr A. C. Cameron’s motion adopted the following resolution:— ‘‘ That-this council; emphatically protests against the- Government’s action in continuing its policy of extravagant public' works expenditure m the face of the known ( economic position of the, country” ' , , The discussion had by this time become an,all-embracing one, and it was remarked by Mr Cameron- that, the Gbyatpient -could, have /increased the ariipSem&bt taxi It was riot- to do that because it would have hit its own supporters,” he said., , A member: What about the beer duty? Mr Cameron: That could be called an amusement tax. I suppose.