TE AWAMUTU COURIER Printed on Mondays, Wednesdays, and Fridays WEDNESDAY, 6th JULY, 1949 GOVERNMENT AND TAXATION

Te Awamutu Courier, Volume 79, Issue 7077, 6 July 1949, Page 6

TE AWAMUTU COURIER Printed on Mondays, Wednesdays, and Fridays WEDNESDAY, 6th JULY, 1949 GOVERNMENT AND TAXATION

WHATEVER political explanations can be put forward, there remains, in the estimation of most electors, the effect of government as registered in terms of taxation. For a time the increasing spending power in the hands of the people was a welcome change in what was regarded and accepted as the political direction of a balanced economy; but price increases tended to move in sympathy and, in effect, to destroy any seeming advantage of increased spending power. The movement has been progressive through the years, and there is widespread cause to-day to question whether any semblance of balance in the economy of the country has really been achieved. Moreover, there is the growing realisation that of all related factors which influence price increases, and the discrepancy between nominal spending power and the ability to obtain consumer goods, the greatest disturbing influence has been the spiral of taxation. Every successive wage or other monetary increase has contributed directly to the taxation pool of public revenue without increasing the supply of those things which contribute to domestic comfort or well-being. The most recent determination of the Court of Arbitration has made necessary a widespread activity by the Price Tribunal to equalise the effect of wage increase, but in the process the baffling situation arises that, whereas £lOOO of nominal wages has to be found, only £925 can be placed in the wage envelope. But that is not the complete story. If £lOOO has to be added to costs on which prices are assessed, it can happen that the imposition of sales tax adds £l2OO to the over-the-counter prices for which

only £925 is provided in the pay envelope. This sort of thing has been happening for years to cumulatively destroy the increased spending power which was so fondly hoped would

assure a balanced economy 1 . The • growth of taxation is stated ih a recent issue of the Abstract of Statistics. Since 1939, for instance, it is shown that all forms of taxation soared from £37,798,000 te the huge total of £130,440,000 per annum — practically a four-fold increase within a ten-year period. The per capita in-

crease was from £23 to £7o—a staggering drain on the supposed greater ’ spending power of the people. M'ost of this enormous increase is classified under the consolidated fund, comp’ ising the items mentioned in the following table of comparison:— Consolidated Fund Revenue Item 1938-39 1948-49

Revenue from the Social Security charges increased within the same period from £5,492,000 to £29.378,000, or £3 8s per head, with £l5 17s sd, and when these figures arc included in the total of taxation collected the following round-figure position is revealed:—

Totals £23 9 0 £7O 9 3 Whether, in the present session, the Government is able to offer reduction in some of these items has yet to be discovered, but it is apparent that there should be ample scope for remission, or even abolition, of some taxes, and that if reductions are offered there are surely cause and occasion for relief to a heavy taxpaying community.

£ £ Customs revenue . 10,650,000 19,111486 Beer dutv . 1,077,000 4,555 374 Sales tax 3,556,000 14,105,224 Film hire tax 86,000 108,285 Motor vehicle registration 3,060.000 3,613,743 Death duties 1,818,000 6,032,390 Duty on instruments . . 394,000 530,800 Racing taxation 661,000 2.103,760 Amusements tax 93,000 243,765 Other stamp taxation 444,000 713,541 Land tax 1,058,000 916,120 Income tax 9,303,000 49,007,672 Miscellaneous 106,000 19,579 Totals 32,306,000 101.061/739

Revenue from Taxation Consolidated Fund Social security 1939 £ 32.000 000 5,000,000 1949 £ 101,000,000 29,000,000 Totals £37,000,000 £130,000.000 Taxation Per Head of Population Consolidated £ s d £ s d Fund 20 1 0 54 11 10 Social Security 3 8 0 15 17 5