WAR-TIME TAXATION

Otago Daily Times, Issue 24632, 13 June 1941, Page 9

WAR-TIME TAXATION

PURPOSE AND SCOPE CRITICISM BY MR LEE (P.A.) WELLINGTON, June 12. The purpose and scope of war-time taxation were criticised by Mr J. A. Lee (Democratic Labour, Grey Lynn), speaking in the debate on the Imprest Supply Bill in the House of Representatives this afternoon. Mr Lee said that taxation last year had been so heavy that the Government had paid off about £10,000,000 of the Reserve Bank’s overdraft. The country had been led to believe when the taxation screw was put on that money was urgently required for adequately equipping the armed forces and increasing the war effort. Payment of Debts

The Government was using the war for reducing the country’s indebtedness, he said. Far too much was being taken from homes that required food while food was being placed in the stores and possibly would be turned into fertilisers. The State had taken not only the money that was necessary for administering the Dominiorj, but £10,000,000 in addition. Why had this staggering rate of taxation been imposed on the lower incomes? he asked. New Zealanders had engaged in deflationary procedure to an extent unparalleled in the rest of the Empire. Mr H. G. Dickie (Opposition. Patea): Don’t you believe in paying off debts? Mr Lee: Not a £10,000,000 overdraft at the expense of women and children who are not getting sufficient to pay for food. That is redundant. Mr Nash Defends Policy

Referring to Mr Lee’s assertion concerning the reduction in the Reserve Bank overdraft, the Acting Prime Minister, Mr Nash, said later in the ’debate that the Reserve Bank balance usually went down because it was the policy of the Government to take money to pay the accounts of the country, and, when money was available from taxation. at the end of the financial year, the bank was repaid. In other words, the State had an overdraft at the Reserve Bank and that overdraft had been as high as £25,000,000. Mr Nash added there was £4,500,000 sterling due to Britain for the outfitting of the New Zealand troops and that had not been paid yet. There was now no limit for repayment, but Britain was carrying a sufficient load without asking that she should carry part of New Zealand’s also.