THE POLITICAL OUTLOOK

Otago Witness, Issue 2975, 22 March 1911, Page 87

THE POLITICAL OUTLOOK

IS IT SATISFACTORY? VII.—THE TAXATION PROBLEM : NEW ZEALAND'S UNENVIABLE PRE-EMINENCE. By. i( Democrat." The burden of taxation may noit, in these days of good seasons and general prosperity, press heavily upon the country, but there can be no questioning tho fact that under lees favourable circumstances —with lower prices for our produce, or under lessened production, following a run of bad seasons. —the shoe that the Liberal Government has made for -as may bo mad© to pinch very aoveireily. Thene is a theory—it lias been set up by the Prime Minister and his first platform lieutenant, Dr Findlay—that the burden of taxation has been r3-adjusted in the interests of the workans, and ' that, although the revenue derived from taxation grows and grows, and etill keeps growing, tho increaoed amounts are taken cat ci the pockets of the well-to-do, and. therefore, from the class mott.t fitted to bear this burden. Th:s theory, however, altogether ignores the possibility of taxation being passed on fcy the man of means to those who are more or le-e dependent upon him. It is perfectly true, as stated in the- Vear Book for i9IO, that only 33,162 persons paid land tax during 1909-10 direct to the State, tut it is none the less certain that, in every instance where the taxpayer lets or leases any portion of his property to a third party, that third party is made to pay a rental that amply covers the rates and taxes that are levied upon the land and buildings. And, similarly, if a business man finds the State making ever-increasing demands upon bis profits, wherever it is por<sible to do so, he fiimply passes the burden on to his customers. Money always begets money, and in these days of .commercial trusts, corners, and combines, it is always possible to give the screw another turn, and so to get back from the multitude that which Cabinet Ministers tell ira the State exacts from capital alone. No re-adjuEt-meiut of taxation can possibly exempt the smaller man from contributing to the necessities of government", unless, indeed, he is absolutely dependent upon and is being supported by the State, in which event, of course, nothing affects him. But every man who is depending upon his own exertions contributes either directly or indirectly to the taxation of the country. He should, therefore, be as much interested in keping down taxation as the wealthier man who pays, say, the land tax and passes it on to him in the shape of rent. SOME INTERESTING COMPARISONS.

New Zealand claims pre-eminence in a good many things. She easily holds the unenviable distinction of being the most heavily taxed self-governing State in Australasia-, as may be seen by the following comparative table, in which the Copnraonwealth taxation for the five-year period 1904-5 to 1908-9 (the latter being the last year for which the official Commonwealth figures are available) is contrasted.

These figures possess all the greater significance because the Commonwealth is carrying the burden of dual governments— State and Federal, each spending money very freely. The State taxation in 19089 varied from £1 7s per head in Tasmania down to 11s 5d in New South Wales, with an average of 16s 5d for all States. For the final year of the quinquennial period the taxation per head of the population for the seven Australasian States was as follows :

It will thus be seen that in 1908-9 the people- of this country paid £1 10s per head more in taxation than the people of Victoria, £1 6s lid more than the people of New South Wales, £1 4e 8d more than the people of. Tasmania, £1 2s lOd more than the people of South Australia, 18s 3d more than the p-eople of Queensland, and 3s 4d more than the people of Western Australia, the circumstances of the latter being such as to necessitate a larger burden of taxation than in the eastern States. THE TWENTY YEARS' INCREASE. Even more instructive, in its way; is the contrast afforded by the taxation of to-day with that of the Ballance Government, which, pledged to economical administration and the development of a self-reliant policy, aimed at minimising both expenditure and taxation. In 1891, when Mr liallauce became Premier, the revenue raised bv taxation was £2,339,511. For the four years (1906-7 to 1909-10) for which the present Government is more directly responsible, it has averaged £4,383,482, with at least an additional half-million (as foreshadowed in the Prime Minister's figures of the increased revenue for the first 10 months) for the current financial year. In 1891 the taxation per head of population was £3 9s 2d. Last year it stood at £4 6s lOd. But, on the figures already referred to, it is certain that another 10e at least will be addi.d to it this year, making it £4 16s lOd Iprobably more), so that, for the fmanciaj j sar ending March 31, 1910,

foe increase in taxation per head was ■L7s Bd, and this year it will be at least 31 7s 8d more than it was in 1891. But Ur BaliancG, during his term of office, nanaged to bring the average down to 83 7s Id, so that the increase between the figures for 1894-5 (Mr Ballance'a lowest year) and 1909-10 was actually L9s 9d, and for this year it may weil aach £1 10s. Under Sir Joseph Ward's administration it reached the highest level :et attained in the history of the country, is will be seen by the following table, which gives the taxation revenue per head of population for the quinquennial period, 1905-6 to 1909-10: Taxation Year. per h ea d. 1905-6 £4 7 7 1906-7 4 14 7 1907-8 5 0 4 1908-9 4 ii ii 1909-10 .',. ... 4 6 10 The taxation paid this year is, as previously stated, likely to be at least 10s per head in advance of that for 1909-10, ;o that it is evident the substituted taxes, levied to make good the reduced Customs duties, which came into force in '.908-9 are making themselves felt, with nore or les3 severity. INCREASED EXPENDITURE MEANS INCREASED TAXATION. Another noteworthy feature in connecon with this taxation business is disclosed by the figures for the decennial period, 1900-1 to 1909-10. During those /ears, the revenue advanced from 35,906,916 to £9,238,917, and the taxation receipts from £3,042,890 to £4,245,858, or by £1,202,968. In the arst-named year the railway and post and telegraph receipts accounted for £2,224,477. The revenue from all' other sources was only £639,549. In 1909-10 :he railway, post and telegraph receipts had risen" to £4,219,763. The taxation revenue was £4,245,858, and the revenue from other sources amounted to £773,296. The position therefore is this, that while in 10 years the taxation revenue has advanced by £1,202,963, the revenue from all other sources (excluding railways and posts and telegraphs, etc.) has only increased by £133,747, while, as was shown in the last article, the cost of governnent or administration (the railways and posts and telegraphs are again excluded from the calculation) advanced from £3,918,251 to £5,967,871, or by £2,049,620. The plain English of all this is that additional expenditure undertaken by the State has to be met almost exclusively out of taxation. We have, indeed, reached that stage in our existence when the State is compelled to rely more and more upon taxation for its revenues. That being the case, it is surely of prime importance that the electors should seriously consider what there is, in the circumstances of this country, to warrant taxation being maintained at such a high rate, and more particularly how is that the average of taxation should be so much higher in New Zealand than ife i in the Australian States. The figurer advanced in thi3 article are all obtained from official sources- The New Zealand figures are taken from either the Official Year Book or the Statistics of New Zea?. find, and the Australian from the " Offiv cial Year Book of the Commonwealth ol Australia." They certainly suggest that it is high time a definite protest was entered against the further piling up of State expenditure, which can only be me* by additional taxation. Were the country to receive a set back in its affairs at any time during the next few years ihe consequences would be very serious, and it would be some years probably before we should recover from their disastrous effects. The moral is, or should be, obvious. The cost of government in this country has not only become unnecessarily burdensome, but it is being made, increasingly oppressive in its incidence; and, in the near future, if the growing expenditure is not checked, it will become necessary materially to reduce the land and income tax exemptions, and thus to bring the smaller incomes and landowners under the scope of the taxing master.

i CD 1908g * cn cn oj oj 04 wealth Taxation •.] to ro m i i per head. 1 COOOCOO'O New Cn 4-* 4~- Z>0&L&rXld, Taxation M0-b-0 0)p er head _ -a-a do Exocss taxation .to New -a oo w -a Zealand co co cn do por head.

Taxation State. per head. Victoria ... ... £3 1 11 New South Wales ...350 Tasmania ... 3 7 3 Western Australia ... 4 8 7 Queensland ... 3 13 8 Western Australia ... 4 6 7 New Zealand ... 4 11 11