The Daily News. TUESDAY, AUGUST 28, 1917. THE BUDGET DEBATE.

Taranaki Daily News, 28 August 1917, Page 4

The Daily News. TUESDAY, AUGUST 28, 1917. THE BUDGET DEBATE.

When Sir Joseph Ward rose to reply to the numerous criticisms made during the Budget debate he had to face a by no means easy task, and though several of his arguments were not convincing, he certainly may be complimented on the able manner in which he justified his taxation proposals. His speech gave ample testimony that he had a full mastery of the subject, and that in framing the Budget he had in mind the prolongation of the war. The Minister, hewever, was not happy in replying to the opposition to the tea tax. Admittedly it is a small burden of itself, and that its destination—a war bonus to. pensioners—is a worthy one, the fact remains that it is an addition to the cost of living, so that the objections thereto were justified on principle and nothing he could say would alter this fact. Neither was Sir Joseph happy in dealing with the question of the excess profits tax. The Minister admitted that the underlying idea' of the tax was a good one, but had failed, its incidence being too eratic and inequitable. There can bo no question that the income tax and land tax will be much easier to collect, but whether the result will justify expectations remains to be seen. The Minister certainly deserves credit for his ingenuity in describing the export of cattle as a realisation of capital and not a profit. In fact, his remarks in connection with liio value of our exports were somewhat startling. He suggested that the profit on the thirty millions of export would 'be no more than ten per cent., and that if it were twenty per cent, it would be a marvel, whilst in support of his contention he referred to the fact that the mortgages in New Zealand had increased by thirty millions since the year before the war. Apparently, Sir Joseph meant the inference to be drawn that the 'war had caused this large increase of mortgages, though he was careful to leave members of the public to draw their own conclusions. At the same time it would be interesting to know bow he reconciles this statement with the enormous increase of money on deposit at the banks, unless be Attributes the great rise in mortgages to inflated prices of land. The Minister's remark that taxes should not b* taken from the people «nles» they we

necessary 'will meet with general acceptance, and as the taxes already proposed will :be equivalent to forty per cent- of the income of those paying taxation any addition thereto would certainly not be welcomed other than •by those who do not pay taxes. It has, of course, to be remembered that there are two classes of taxpayers—the honorable and dishonorable. If every man, paid what he ought it would simplify matters and equalise the burden, hut the Minister pointed out, when justifying the- mortgage tax, that it 'was astonishing how many people, acting within the law, continued to increase their mortgages when mortgaged interests were exempt from taxation, and that tlie exemption of mortgages allowed unscrupulous people to -increase their mortgages to such an extent that they had to pay no land tax at all. It is the men who are forced to give small mortgages that feci the pinch most., so that the Ministers statement that he hoped to be able to give this class some relief, is to 'be commended. It is pleas-. ing to note the Minister's explanation 'why ho proposes to institute compulsory means for securing subscriptions to the war from those who wilfully refrain from helping this patriotic effort. It is certainly surprising to learn that the majority of the people who contributed to last year's loan borrowed some of the money—in certain cases as much as 90 per cent., while others who had the means kept their money for selfish purposes. Equality of effort and equality of sacrifice are imperative in this time of stress, when, if each unit does his j duty the sinews of war will be provided J without straining our resources. Few people will, however, be satisfied with Sir Joseph Ward's reason for adhering! to the limit of the graduated income j tax to £IMfIO, The case of large companies could easily be dealt with, though if the principle that money I makes money is accepted then tho principle that the greater the income the higher the taxation should bo acted lipon. Of course wo want to keep wealthy men in the. Dominion, but if they went to Britain or sent their capital there for investment, the yield would he taxed on tho sliding scale, and there is no realvalid reason why this class should be specially favored. The Minister admits that the '•silver bullet" would be the most effective to end the war, and yet he restricts the manufacture, although he proclaims that men with large incomes are not "squealing" at the taxation. That the taxation will be heavy is ■beyond dispute, and it i 3 very probable that many people will have to borrow money wherewith to pay their taxes. The prospect is not pleasant, but wc have got to 'win the war and that means

paying the price. This year's quota towards the price is an additional six millions in t*xes-a colossal sum-but out of this the Treasurer is lookin? for a surplus to swell tho Dominion's°reserve 1,1 LondM - Probably the most satisfactory of all the .Minister's explanation was in connection with the free of income tax clause in the war l oan proposals. He is confident that the loan could not be raised successfully on anv other terms, and as the money i, ur"pmtJy needed he i 8 probably „■ u jn the course he has token in view of th« fact that if income tax had been levied he mterest would have to be increased V t,VVO P° r cent On the whole the Minister made out a good ease.