TAXATION AND TRADE.

Otago Witness, Issue 3871, 22 May 1928, Page 8

TAXATION AND TRADE.

POLICY OF THE GOVERNMENT. WELLINGTON, May 15. Mr W. Downia Stewart (Minister of finance) addressed a representative gathering of Auckland business men today. Dealing first with the criticisms occasionally levelled at the Government, Mr Stewart said these were welcomed in a general sense as from the Chambers of Commerce and such bodies, but they veie objected to when they came from the leisured class which was capable of assisting in the public affair of the country and refused to take its pnrt, content apparently 11 take an occasional trip to the Sydney races and to criticise those who did the country’s work. louchiag on the strong criticism which had come from Auckland in connection with his refusal last year to reduce the income tax, he said he was still unrepentant, and argued that any one of his lieaieis, had they a full knowledge cf all tho facts, would have acted as he had done. The position of taxation generally hud in recent years become very anomalous. The income tax had become so restricted in its incidence that it was impossible to rectify these anomalies all at once and at the same time obtain the revenue nesded. To have res inded the company taxation and made up the diff rcnce on individuals was a task that no Government making the change could have survived. Theoretically, direct taxation was correct, but actually public opinion would not accept this method. Refrriing to the recent remarks on tile bank rate the Minister said he had been criticised for having said that political influence had been used with tho 3ank of Nev/ Zealand. H" must have ■.-J pressed himself clumsily if that opinion had been cor. ectlv reported. What he had said was tnat he was f’-flly entitled to make representations to the Govern’"ei’t representatives on the Bank of New Zealand, bvt having made its representations the Government was not entitl d to go farther. The banking journals, he said, had accepted the view that he had acted n-onerly in limiting his action as he had done. The same position had arisen again latelv, and her had drawn the attention of the associated banks to the improved position in regard to their .-<■ <..-ns, suggesting that the matter might -gain be reviewed. The rcplv of the banks was that if the present trend continued they would be able to reduce the rate, but no date had been given, and be had not deemed it fit to seek to carry the matter further.

Touching on the matter of trade with Australia the Minister said that a difficulty which had confronted him was that the two countries bad a different policy in repard to Protection. The Avstra’iar. s did not seem to set their standard bv the best organised and most efficient industry as the one which should determine the amount of Protection th-t should be granted by tariff, but their standard seemed to be set to suit the average firm or even lower than that. The New Zealand policy, on the ether hand, was to encourage the rosour lefulness of its manufacturers by insisting that a protective tariff should bo based on the needs of the best organised industry. He quoted an unnamed manufacturer who had been refused Protection a year ago. This manufacturer, who had, at that time, said he feared having to close dawn, had reduced a number of his lines, nut his men on piecework, given them certain guarantees, and his turnover had since more than doubled.—(Applause). In this connection he was very hopeful that the Industrial Conference, now sitting in Wellington, would devise some means that would bring about an improvement in our secondary industries without further appeals or tariff Protection. Dealing with political conditions generally, Mr Stewart said it seemed to him that the> public was more dissatisfied in other countries than our own. He had come to the conclusion that the democratic machine could scarcely adapt itsdf with sufficient promptitude to meet the changing views of the people as a whole. In paits of Europe this discontent had shown itself in a disposition to leave democracy and seek for dictatorships. If democracy was going to be preserved ir this i auntry it was necessary that many of taose qualified to lead the nmnle and help in- the administration of public affairs, who did not at the present take any part in the Government of the country, should come forward and do their part. This was particularly necessary in view of the depletion made bv the Great War. No doubt many of his bearers had the idea that they could do his woik better -than he could, and possibly they were correct. Someone had to do it.