INCREASE IN TAXATION

Southland Times, Issue 23445, 28 February 1938, Page 4

INCREASE IN TAXATION

MR SAVAGE MAKES EXPLANATION £18,000,000 USED FOR SOCIAL SERVICES (United Press Association) WELLINGTON, February 27. Claiming that more than half the taxation revenue of New Zealand was handed back to the people, the Prime Minister (the Rt. Hon. M. J. Savage) in his address at the Labour Party s picnic at Featherston on Saturday, said that he, was going to be quite frank about taxation. As the result of better times the taxation revenue last year increased by £5,500,000 to the record sum of £31,000,000, which admittedly was “a mighty lot of money,” but the test, was what this big revenue was used for.

To begin with, £11,000,000 went to pay the annual charges of the national debt, a legacy from previous Governments. The sum of £18,000,000 was paid for social services, including health, education, pensions, and unemployment relief. . Thus, he declared, more than half the taxation was handed straight back to the people. Approximately £3,000,000 was spent on highways, and the rest of the money went for essential repairs, defence, and administration. It was true that taxation was less under what he termed the “depression Government,” but at that time incomes and wages were much lower, and social services were shamefully inadequate. “We hear a lot about high taxation,” continued the Prime Minister. “The test is: What have people left after paying the taxation? Since 1935 the aggregate private income has increased by at least £37,000,000, while taxation revenue has gone up £10,000,000. The extra money left for the people is £27,000,000, and the surplus appears to be a good dividend. “Taxation to provide social services is part of the Government’s policy of redistributing the national income.” said the Prime Minister, with emphasis. “Can New Zealand afford its social services on the present improved scale? I say ‘Yes,’ and I defy anyone to disprove it”

He asked critics to look at the nation’s resources and the expenditure on luxuries. It had been said that his Government was in too great a hurry to make conditions better for the people. Surely that was a good fault. They began on the quick elimination of social misery, increasing wages and pensions, extending the pensions scheme to 10,000 invalids who formerly were among the forgotten people, and lifting the unemployed out of starvation. They had established national control of the public credit, and remedied the main fundamental defects in our financial system. “It would take hours to give all the Government’s achievements in detail,” said Mr Savage, concluding his taxation references, “but the quickest and surest way to realize their effect and value is to look back at the widespread misery in New Zealand a few years ago and then study the broad evidences of real prosperity today.”