BUDGET TAXATION PLANS

Stratford Evening Post, Issue 7, 30 July 1930, Page 6

BUDGET TAXATION PLANS

PARLIAMENT’S DEBATE OPENS

LEADER OF OPPOSITION EXPRESSES DISAPPROVAL

PROPOSALS 'TLL-MMGNED AND INEQUITABLE

The first crossfire 'oi! comment on the Budget propose is was indulged in by members of Parliament last evening, when the Budget debate was initiated. A lengthy amendment was moved by the Hon. •). (1. Coates, setting out the reasons why he considered the taxation proposer., A designed and inequitable.”

WELLINGTON, July 29. The House resumed at 7.30 jam. The Budget debate was initiated by the lion. d. G. Coates, who said he realised that the lot oi Mr Eorbcs had been a very diliieult one. The present was not the occasion for raising suck matters as the promises of the United Tarty'prior to the election, as the problems of the day required the very careful consideration of everyone. It va. necessary that the Opposition should raise an early protest against i,he taxation proposed by the Government, and for that reason he would move: “That in thp opinion of this House, while recognising that reasonable provision should bo made to balance the Budget, the Government taxation proposals are illderfigned and inequitable. (1) That increased taxation in regard to main highways will not only enormously increase transport costs and add further to the heavy burden carried by all ratepayers, but the suggested course is, a breach of faith with local authorities and motorists, who agreed to the imposition of special taxation on the condition that no part of this taxation was to be available for the general purposes of the Consolidated Fund. (2) That the Customs amendments do not provide in a suitable manner .for Empire preference and will result in a substantial increase in the cost of living; also, being spread over a wide range without discrimination, they will not tend to that economic development, both in primary and secondary industries, on which depends the ultimate solution of the unemployment problem. (3) That the present heavy burden of ‘high costs for the primary producer will be unnecessarily aggravated, while the almost entire

i safety offered by defence forces. A clear indication should be given on the present occasion whether it was intended to replace the present system with a voluntary one. Air Coates added that he did not think all the opportunities of effecting savings in expenditure had been taken. In conclusion, lie said he hoped that I New Zealand people themselves would help local manufacturers and others byadopting the slogan of “Buy New Zealand Goods.” The Hon. E. A. Hansom said the Deform Party was still advocating a policy of drift which would eventually absorb the whole of the accumulated surpluses. This was the only way in which increased taxation could be avoided. Backblocks Roads. In regard to expenditure from the highways fund, Air Ransom said that if it were intended to give effect to the provisions set out in the Budget for the development of backblock roads, it wc,3 necessary to amend the Highways Act. That was the only way to ensure that the extra threepence taxation would be expended on buckblock roads. He was sure that local bodies would approve of making the money in the highways fund available for use at the discretion of the Atinister of Public Works. They would be entirely in sympathy with improving tho reading facilities in the outlying districts.

Mr Ransom declared there were three outstanding characters in the Government’s Customs tariff policy; The development of Empire trade; reasonable p tection for our industries; and the production of revenue. He would like to know, in view of the closing words of the Loader of the Opposition’s speech, what industries he believed should be allowed to go by the board because of the cost on the consumers. Air Ransom asked what young industry in Nou Zealand had not been faced with a struggle for existence and had not required fostering.

Jack of economy in the Government's proposals, together with heavy taxation, will have a detrimental effect on production, tins being imposed at a period when every effort should bo made to afford relief.” ,

Dealing with tho expenditure of public money, the Minister said that the United Party’s loan expenditure did not exceed that of the Reform Party, except in one particular, and that was for State advances. That burden would not fall on the shoulders of the general taxpayer. The Minister declared that the financial statement had been described by Air Coates as a “Black Budget,” but by demanding equality of sacrifice and by imposing the burden on those best able to bear it, it could better bo described as the “Budget of Justice.” Causes of the Deficit. Referring to* the causes of the Budget. shortage, tho Alin inter declared Hint the Government could not possibly be held responsible in view of three principal reasons: Tho fall in the prices of exportable primary produce; the heavy loss on the railways, which it was no longer possible to meet out of reserves; and the estimated shortage of Customs revenue The Government, had no intention of running for pobtic;ii shelter. It was imperative that the country’s finances should be put on a sound footing and by facing the position at once the country would the sooner return lo a condition of prosperity Dealing with the petrol tax, the A 1 blister stated that tho consolidated account was no longer able to meet the drain made upon if, and it was fair that the users of the roads should be asked to bear the burden of increased costs. The enormous increase was due almost entirely to motor transport. The loading of tho high cost of motoi roads on to tlie primary producers was crippling the farmer and materially assist big in driving him off the land. The Government had no intention of in creasing general taxation, which was tho only alternative to the petrol tax. The Minister said it did not necessarily follow that the tax on petrol would have to be passed on to the consumer. Attention had been drawn in tho past to the price that had to be paid foi motor spirit in this country, and tin. Government, might yet have to investigate the position and sou that the ! consumers were getting fair treatment. Air Hansom asserted that no previous Government had ever done so much to assist iho development of the back | country and give the settlers goou metalled roads. Tho salvation of 'his country depended on the development of waste lands, and for this purpose metalled roads were important. Land and Income Tax. Passing on to laud and income taxation, the Albiister said that tho estimated yield would be tho same as at present, but the burdens would be more equitably distributed. A few dairy farmers, for instance, would pay in- | come tax. There were only about 4000 | farmers in Now Zealand whoso unim j proved value exceeded £7500, and who | would have to pay income tax. There l wore about 80,000 farmer? whose valu I atiou was below that figure and who would not be affected by the amendment. Further, owing to tho £7500 mortgage exemption, many of these would pay neither land nor income tax. M r 11. E. Holland. Leader of the I Labour Party, moved tho adjournment of the debate and tho House rose at 0 25 p.m. till 2.30 p.m, to-morrow.

Mr ooaies stated that the Labour Tarty hud declared it preferred the present Government to Jleform, and for lirat reason Jie did not anticipate an endorsement of his protest. But the Kero m Baity wanted the taxation proposals to bo amended. He asked tno Government why it was necessary to interfere with leg slat, ion winch had as its two main oojects to relieve the producer of the heavy burden of paying for roads that were far beyond Jus requirements and to provide for those others who needed them, roads which would offer an economic means of trims portatiou? Motorists should not be asked to pay moro until it could be seen that additional advantages would follow spending more money. Air Coates suggested that the real object of the tax was to relievo unem ploymeut. The Hon. E. A. Ransom: It is to help back-block settlers. Mr Coates: This will not help backblock settlors. Irritating Customs Tax. Continuing, tire Leader of tho Opposition said he thought tho Government’s proposals in regard to customs wore irritating. There was no general lino of policy to bo observed in them. Every party in the House was sympathetic with the proposals in the direction of promoting Empire preference. If we could at the same time help the workers and manufacturers in Britain and still enable our own producers to sell their goods on a satisfactory basis it was all to the good. Thu greatest problem facing Now Zea-

land to-day was the cost of primary production, and anything that increased those costs would affect the whole country. The items that wore essential to the economic development of primary industry should bo placed in a category by themselves and should, as far as possible, be admitted duty free. When it came to the other spheres it was necessary to observe that wo had rovonuue to collect and secondary industries to protect, but in the first place it should be ascertained whether these industries had placed their own houses in order; i.e., whether they were producing at tho lowest price possible to tho ‘consumer. It would be inadvisable to add to tin! burden on tho shoulders of the people merely to enable industries to creep up under the protection of tariff barriers and produce at an uneconomic «ost. This was' an exporting country and could not afford to erect a fence around itself. Spending Public Money Dealing with the expenditure of public money, Air Coates said that in the present, state of the country’s finances, and in view of the modern trend of progress, it was important that all railway projects should bo carefully reviewed. He suggested that in the case of some lines it might lie found that th« greatest item would be tho operating costs rather than the construction costs. With regard saving expenditure, he asked whether it was proposed to repeal the compulsory clauses of the Defence Act. He submitted that it would lie wise to obtain tho opinion of the country on the subject before such, a ■decision was reached. He asked whether the Committee of Imperial Defence had been consulted us to how far it would bo safe for the Dominions to reduce the measure of