SANE OPTIMISM

Poverty Bay Herald, Volume LV, Issue 17607, 24 October 1931, Page 15

SANE OPTIMISM

BETTER TIMES COMING MR. MERRITT’S VIEWS NO TIME FOR PARTY INTERESTS Facts, not intuitions, were the basis of an optimistic statement on trade recovery made by Air. U. T. Alerritt, of Auckland, towards the end of liis presidential address at the annual conference in Wellington of the Associated Chambers of Commerce. “Last month,” Air. Alerritt said, “I made a statement in the press that the slump was passing, and owing to the momentous changes taking place in Great Britain, New Zealand and other producing Dominions would quickly begin to feel the benefit. Many of my friends informed me niv remarks were premature, but I am happy to state that, as I read them, there are many signs that I was not far wrong, and to-dav I feel more convinced than over that 1 was right. I will not recapitulate- the arguments 1 then raised, but will mention instead two further reasons that incline me to, speak so emphatically. MATTER OF BUSINESS

“The great political changes no.v taking place in Great Britain indicate that at last the question of Imperial trade is to he removed from the arena of party polities, and can he dealt with purely as a matter of business. Some of you may have misgivings as to the outcome of the political situation in England, but my great faith in the common sense of the British people convinces me that the day of Imperial preference is dawning, and the road to Empire economic unity in sight. It will alter the whole economic outlook of this Dominion.

“Therefore, I say there is every reason for thinking tiiat better times arc not very far off. At. the same time let there 1 be no mistake, this alone will not save New Zealand. Wc now have a National Government called together to grapple with a problem equal to, if not exceeding in gravity, any other crisis in the history of this country. A false step may bring utter disaster upon us. It is therefore to be regretted that party feeling has already begun to sow the seeds of dissension. “There may be justifiable misgivings in the minds of the commercial community that the Cabinet is so overwhelmingly rural in its composition. It contains, I think, nine farmers. However, we arc not complaining, and it is possible they may do the job better than representatives of other classes; but while recognising that the prosperity of the primary producers in this country is of almost paramount importance, the just claims of others must not be lightly disregarded. BUDGET PROPOSALS “The amended budget proposals are now before the country,” Mr. Merrill: concluded, “and it is noted with pleasure that the proposals contain many features reflecting the views your executive had the privilege of laying before the Economy Committee. lam sure we are all thankful that there is no additional customs taxation—a form of indirect taxation which, as a source of revenue, should be adopted only after the most careful scrutiny. This tax is almost invariably passed on to tho ultimate consumer, with profits for both wholesaler and ret,Viler, and by the time it reaches the consumer is swollen by these additional charges. It; is a bad tax in the sense that it takes a great deal more out of the pockets of the people over and above what it puts into the public Treasury. RATER OF INTEREST

“T think we are all relieved,” Mr. Merritt said, “that the amended budget contains no proposal for a statutory reduction in interest rates. It would' have'created an extremely false and erroneous position. Furthermore, it is widely known that interest rates arc being reduced, and we are all looping forward to the early fulfilment: of the promise, made by the associated banks in this direction. To stimulate industry, and to help a return of prosperity, interest should come down. INCOME TAX QUESTIONS “Another wise feature of the budget is that there has been no increase in. the company income tax. Insofar as additional tax was necessary, it had been placed on individual incomes, which is the first departmental recognition of the sound principle recommended by the Income Tax Commissioner of 1924, which the chambers of commerce 5 have consistently advocated If there is a tax where justice r and equity should be established, it, is in that relating to income. It is accepted as a fair basis that the person receiving, say, £SOOO, should pay a proportionately higher rate than the one in receipt of only £SOO. Yet the present incomes tax on Companies permits of no discrimination, and shareholder? both large and small are equally taxed. ' “The incidence of income tax is » matter demanding urgent, attention,” Mr. Merritt concluded, “and if it be found impossible to abolish company income tax, the present scale should be abandoned in favor of a flat rate, and the burden be distributed more evenly and consistently on the individual.”