CHAMBER OF COMMERCE

Otago Witness, Issue 3519, 23 August 1921, Page 42

CHAMBER OF COMMERCE

MR T. ,-SOMERVILLE'S ADDRESS. The annual meeting of the Dunedin Chamber of Commerce was held in the Savoy lounge on the 18th, the president (Mr T. Somerville) presiding. Mr Somerville, in moving the adoption of the report, said : TAXES AND INTEREST BILLS. For some time past the expenditure of the dominion had been growing at an alarming rate. 'This was, of course, due to war conditions, but we were apt, especially when conditions rendered trade abnormally good, to accept rising expenditure as of no consequence and to relax vigilance. The figures for the June quarter were staggering. Taking, however, the complete figures for the year ended March 31, 1921, they would find that interest and -sinking fund rose from £7,249,426 to £7,831,594, as compared witfc £2,887,980 for 1913-1914; aid the figures for the June quarter indicated a much higher amount for the present year, due largely to the increased interest charge on loans floated in 1920-1921. The percentage of revenue absorbed by public debt charges in 1914 was 23.61, and in 1920 27.80. In 1921 it would be higher still. This did not appear to include interest on loans which were reproductive, such as for land settlement. When the enormously increased taxation was considered, the percentage in 1920 was very high, and it was difficult t-o see how a reduction in taxation could tie brought about. The total revenue from direct taxation in 1914 was £5.918,034, and it took that amount, plus £434,909, to pay interest alone in 1920. Such was the result of war and war’s EXTRAVAGANCE, IN ADMINISTRATION. Some of the sources of taxation were likely to be reduced automatically. The rota 1 isator tax might be taken as an index of the ‘oome-easy-go-easy” spirit which manifested itself when borrowed money was in easy circulation. On an investment of £3,680.390 in 1914 the Treasury benefited by £92,260, and in 1920 by <m an investment of no less a sum than £8.373,787. \\ bother ill® dominion could afford to pay for its pleasures on tins scale was open to question. In addition to the amount- of Xj zO9.o-43 paid to the Irea-sury, there were the further sums of £197,730 dividend duty and £.5900 tax on stakes. During the war years the income tax had increased to 45.54 per cent., and land and income tax together to as high as 56.77 per cent, of the total revenue from taxation. The increases in taxation a.s compared with 1914 were remarkable ; 1914 1921. Increase Customs £3,553,785 £8.409.725 £4.844 940 Band tax 767,451 1,688.979 921.528 Income tax 554,271 8,248,945 7,694,674 £13,471,169 Commerce was directly concerned in all of these taxes, and carried a very heavy share of the burden. Whether it- could continually be borne, much less increased, without serious consequences to trade and commerce. merited the most careful consideration of the Legislature. Interest must be paid absorbing £9,000,C00-£10,000,000 vearly. Pensions must be maintained which, in 1921, cost £2,812.652. Interest and pensions alone would more than take the amount raised by taxation in 1914. In view of such figures and the almost certainly reduced yield of income and Custom taxes in the immediate future, it was apparent that relief could only come by increased production and efficiency all round. Government MUST REDUCE EXPENDITURE to the utmost. It cost £647,965 more to run tile Pest and Telegraph Department m 1921 than in 1920. The administration of the Treasury Department was increased bv £450.723. probably partly due to flotation of loans. Other departments were increased by : —Justice £164.480, Hospitals by £92.828. Tourists by £24,762. and Education by £428.291. Railways showed an increased cost of £1.005.036. but how much of this was accounted for by coal on hand and new plant was not- disclosed. “When will the time come,” asked Mr Somerville, “when our people will insist on proper balance sheets and profit and loss accounts in connection with Government trading f ” RETRENCHMENT AND ECONOMY. Tile existence of the present financial tension and unemployment, the increase of Government depart menial expenditure, and the excessive income tax paid by large companies all called for earnest consideration by the Government and the country. When wo realised the disastrous fall in the value of wool, moat, tallow, hides, skins, and produce, and the excessive importation of merchandise. we were faced with a position that demanded from all sections of rite community the utmost economy and increased effort in onler that the revenue, if not, entirely meeting- expenditure, might at least be brought much closer than at present obtained. Tn wool, one of our staple products, we were forced to realise the fact that there was a reduction in value this year of some £7,000.000, to which must be added the fall in value of other products. We must also appreciate the additional fact that, there was an enormous reduction both in hulk and value in the importation of merchandise, involving a corresponding reduction in Oiistoins revenue, and heavy writings off in the values of high inflated -1,...1.--• !, T, I. ~.,1.1 1,0

All of these factors meant a position which was becoming serious, and which should be dealt with promptly and drastically. We must not let matters drift in the foolish hope that they would right themselves, and that the sun., now hidden, would shine again. The times called for economy, both public and private, and it was regrettable that there were so few signs of any practical movement in the direction he had indicated. The Government should be the first to give a lead in the matter, and when we realised that the public expenditure was heavier to-day than at any time during the war period, it surely indicated that there must be an increase rather than the desired decrease in the Civil Service. We had been told by Mr Massey before he left the dominion that the Government was proceeding to economise, and that when retrenchment came it would commence at the top. That was months ago, and he faded to see any indications that the Ministry was taking steps in this direction. We anxiously looked forward to the Prime Minister’s return in order that the assurance given may be immediately acted upon. It seemed to him that the suggestion contained in a recent cable from London to the effect that a small commission of business men of acknowledged organising ability and integrity had been appointed to inquire into the working of the Government departments, with a view to economy without impairing efficiency, might well be adopted in the dominion. Owing to the improbability of economies being dealt with efficiently by the Government, he believed that this proposal should not- be lost sight of, and should be urged on the authorities by the chamber. HARBOUR AND RAILWAYS. The Harbour Board was to be congratulated upon the progress nia.de in its development works during the year. The most important achievement was the dredging of the channel between the Heads and Port Chalmers to a width of at least 300 fret , and a minimum low water depth of LlOf t>. Lack of railway communication on the wharves at Dunedin was a serious handicap in economical handling of cargo, a drawback which would be emphasised as the depth in the Victoria Channel increased and vessels of larger draft were able to berth at Dunedin. It was, therefore, most important to the welfare of the city that the deviation of the railway line should be undertaken at the earliest opportunity, as by this means alone could direct railway access to ihe wharves be achieved and the present expensive method of double handling of cargo tie eliminated. Another essential to the prosperity of the port is the erection of free and commodious stores adjacent to the wharves, tn which our grain, wool, and other exports could await shipment without fear of deterioration. SHIPP! XG F ACT ITTT KS. The year under review liad been marked by the arrival in these waters of a number of new cargo vessels of modern type, purchased by the Union Steam Ship Company in order to provide for trade requirements. Unfortunately, the existing slackness in trade had resulted in the laying up of a number of vessels for want of cargo. The chief difficulties with which shipping had to contend are the high running costs and poor despatch as compared with pre-war years. Until these conditions abated it was improbable that any improvement in rates of freight could occur, nor did it seem likely Unit, anything approaching the time-table services of former years could be maintained. Mr C. S. Oven said he thought they had listened to the address with great satisfaction. He bad great pleasure in seconding the adoption of the report. The motion was carried. The following office-bearers were appointed; —President. Mr C. S. Owen; vicepresident, Mr IT. W. Jones; hon. auditor, Mr D. Crawford; members of council— Messrs A. IT. Allen, G. Benson. IT. Broach, W. Gcw, A. Paterson, and W. H. Shepherd.