THE COST OF GOVERNMENT

Southland Times, Issue 18811, 3 May 1920, Page 7

THE COST OF GOVERNMENT

To the Editor. , Sir, —In Friday’s issue of the Times you publish a paragraph under the heading, “High Income Tax, What it Costs to be an Englishman.” You quote income tax figures on two given salaries for various countries, including Great Britain and New Zealand which certainly go to show that our income tax and Great Britain’s are relatively higher than that of other countries. The income tax in Great Britain runs approximately from twice to ten times ius much on a given income, as in any other country considered. Apropos to this you state “that the cost of Government in England at the present moment runs from twice to ten times the cost in any other country. New Zealand is a close runner-up. This estimate is bx-ed on the income tax. . . .” Now, sir, I cannot sec the connection between the cost of Government and income tax. From the fact that the income tax is only a part, and a small one, of the "’hole revenue which the Government takes to run its affairs, it follows that wo cannot estimate the cost of Government upon this alone. In fact, the income tax alone seems to me to lie no indication at all, for although this tax may be high, we may be lew in others (Customs, excess profits, postal service, etc., etc.) so that the total revenue may he the same as, or less than, countries with a lower income tax. The statement that we, as runners-up to Great Britain, have a Government which costs almost from 2 to 10 times more than any other country is rather alarming to the casual reader and is apt to be noted down as condemnatory to our New Zealand Government. The conclusions drawn are apt to be highly irrelevant because: (1) As stated above, the cost of Government cannot be estimated by the income tax, and (2) even if we did compare the actual costs of various Governments, we do not know what service these Governments are returning to their people. Indeed. the very fact that our own cost of Government is so high (if it be true, as it may) would indicate that we in New Zealand receive a greater proportion of State benefits, than do the countries run at a lower cost. Whether or not this is a propitious state of affairs from a citizen’s point of view is not the purpose of my writing, but at any rate it would appear to be thought so by a great number of people who cry out for nationalisation of industries, .State banks and coal-mines and many other forms of Government enterprise.—l am, etc., J. M. ABERNETHY. Club Hotel, 30/4/20.