HEAVY CHARGE ON INCOMES

Southland Times, Issue 24160, 24 June 1940, Page 4

HEAVY CHARGE ON INCOMES

FORECAST OF BUDGET PROVISIONS .

DRASTIC TAXATION IS EXPECTED HINT OF COMPULSORY LOAN (From Our Parliamentary Reporter) WELLINGTON,. June 23.' The general expectation is that the Budget, which is to be presented on Thursday night, will contain drastic taxation provisions, bringing the position in New Zealand more into line With that in the United Kingdom. Statements made by the Minister of Finance (the Hon. W. Nash) in recent months will have prepared individual taxpayers for a heavy charge on incomes, and few would be surprised if the aggregate income taxation is doubled.

The cost of New Zealand s share in the war for the current year was estimated three months ago at £33,000,000, but the serious change in the international situation, the introduction of conscription and the increased provision for home defence are likely to increase substantially the expenditure that will have to be met from time to time. Mr Nash has warned the people that greater efforts and sacrifices might be called for, and has said at the same time that the Dominion should pay for the war as far as possible as it went. While details are naturally not available, a broad hint has been given of a compulsory loan, the nature of which is as yet unknown, and an excess profits tax, which is likely to be 100 per cent., especially in view of the recent Ministerial statements that no one should profit from the war. When the excess profits tax was adopted in Britain the years for which income levels were fixed were 1936, 1937 and 1938. There is also considerable speculation in Parliamentary circles on the likelihood of an increase in the Social Security taxation. No contributions to the fund are made from Expeditionary Force pay and the quarterly levies of these men are paid by the Government. While the revenue is thus reduced, the future financial responsibilities of the fund remain, and calls upon it are certain to be increased as the war progresses. At the same time there is no indication that the Government has any intention of reducing the Social Security benefits.