Taxation Problem Still Untackled

Sun (Auckland), Volume I, Issue 119, 10 August 1927, Page 1

Taxation Problem Still Untackled

GOVERNMENT’S POLICY ATTACKED BY MR. SIDEY (THE SUN’S Parliamentary Reporter.) WELLINGTON, Tuesday. TN its failure to deal appropriately the whole question of direct and indirect taxation, the Government missed a great opportunity. This opinion is field by Mr. T. K. Sidey, member for Dunedin South, who said in his speech in the financial debate in the House of Representatives to-day that in this, the working, session of Parliament, with the tariff under complete review, the question of direct and indirect taxation should have been dealt with. He could not resist the conclusion that the Minister had missed a great opportinuty for his party in failing to cover this in the 1927 Budget. The question of taxation, Mr. Sidey said, was the most disappointing part of the Budget. During the past seven years the Government had repeatedly acknowledge the necessity for equitable adjustment, but it was idle to say, as the Budget affirmed, that most of the committee’s and Commission’s recommendations had been adopted. Reductions would have taken place in any case. It required no commission to advise the Government to reduce taxation. LEFT UNDONE The things that had been done that would not have been done but for the Commissions, were a mere bagatelle compared to that which constituted the great purpose for which the commissions were set up; to advise as to the incidence of taxation. The Commission had recommended that income tax should be based on income from all sources, including income from land, and data should be obtained for that purpose. The Government had not even troubled to include in its returns a schedule enabling it to estimate what would be obtainable by the inclusion of incomes from land with other incomes. The Government, in fact did not have this information in its possession, and was therefore not in a position to judge what would be the effect of the change recommended by the Taxation Commission. There was probably a good deal of pressure from large company, shareholders against the change in company taxation, Mr. Sidey alleged, but he considered that the estimated loss of £1,000,000 did not appear to be so large as to be incapable of adjustment. The relief of companies from taxation would, in fact, give a Slip to industry, as well as enabling our manufacturers to compete more satisfactorily with importations from such countries where this taxation did not exist. It had a close relationship to the tariff, and the considered view of Mr. Sidey was that the Government should have handled the question in its entirety. REDUCTIONS EFFECTED The Hon J. A. Young (Minister of Health) said that the facts were against Mr. Sidey. As a result of the war, company taxation went up as high as 8/9 in the pound, which resulted in agitation for a reduction of taxation, or a less oppressive incidence upon people who received only small incomes from their investments, Changes had been brought about which resulted in the reduction of the maximum tax to 4/6 in the pound. There had also been a reduction by widening exemptions, and the incomes of farmers, which were derived from farming operations, were not taxed at all. “So there is a pretty good schedule of work in recent years, as far as the Government is concerned, in connection with the incidence of taxation,’’ said the Minister. Mr. Young added that with the everincreasing demand for social services, such as education in all its branches, pensions, and hospitals, which all cost money, it was not reasonable to ask for a reduction in taxation* especially when the buoyancy of the revenue could not be depended upon.