THE BUDGET

Timaru Herald, Volume CXL, Issue 20217, 19 September 1935, Page 7

THE BUDGET

OPINIONS OF TIMARU BUSINESSMEN POINTS DISCUSSED Opinions expressed by Timaru businessmen to a representative of “The Timaru Herald” yesterday in regard to the Budget were to the effect that in the circumstances the Government had done well. Disappointment was expressed in some quarters that various matters had apparently not been tackled, but on the whole the statement issued by the Minister of Finance (Rt. Hon. J. G. Coates) has been well received. “There is nothing spectacular about the Budget, and in fact it does not contain anything beyond the forecasts already made,” said Mr H. G. Naylor. “The salary and pensions increases are gratifying and will afford some relief to a section of the community that the depression has touched heavily. In regard to the unemployment tax reduction it would, in my opinion, have been better to have applied this money in helping to provide or stimulate some major schemes of work on which unemployed could be engaged on full time. Failing this, then the additional money should be used to provide necessities which many of the unemployed are badly in need of. In fact the Budget is disappointing in its reference to unemployment, for I am still convinced that a better method can be found of dealing with this vital problem than the existing one.” Disappointing Feature Mr Naylor went on to say that another disappointing feature was the failure in respect to general taxation reductions. The cost of unemployment tax relief and salary and pensions increases approximated very closely to the interest saving effected in regard to the Government’s conversion operations, so that the buoyancy in revenue noted by the Finance Minister was apparently only sufficient to meet increasing expenditure, and was not available for tax reductions. The Finance Minister was optimistic regarding the future prospects of the Dominion, but more point would have been given to his optimism had he given some relief in general taxation, particularly in regard to the sales tax. Such a gesture would have given more encouragement and created a greater feeling of confidence in the community generally. The Minister was apparently satisfied, however, that the concessions granted were as much as the budgetary position would allow, and in view of the fact that this was election year, he must be given credit for dealing with a difficult position with courage and prudence. Unemployment Tax “The average taxpayer probably regards unemployment tax and income tax as more or less complementary to each other, and will therefore welcome the relief which the Budget proposes to give in reducing the rate of unemployment tax,” said a businessman who was approached. The steady, if gradual, improvement in trading appeared to justify the reduction, particularly as the policy of the Unemployment Board was now more definitely directed towards getting unemployed men back into regular work at standard rates of wages. On the other hand, if the amount of relief which could be given were limited, it would have been better to apply it to the reduction or elimination of the sales tax, which was inequitable in its incidence and, by adding to the cost of commodities, placed an extra burden on the very classes who most needed relief. Have Done Well “It is a pity the Government has not tackled the gold tax or the sales tax,” said another businessman, “but on the whole it has done very well.” It seemed to him that the sales tax and the unemployment tax hit the same people, and since the Government only had a moderate amount of relief to afford, it had given it in the quarter where it would be spread the most. So far as the reduction in the wage tax was concerned, and its effect on the unemployed, he was inclined to think that the relief allocations even now were taking away the incentive of the men to look for work, and any increase in the allocations would be still more detrimental. So far as the restoration of 74 per cent, in- the- wages and salaries of the Public Serivce w~s concerned, he thought that this was only a fair thing. It was a special cut caused by a particular financial stringency, and there was a moral obligation, at least, to replace it when the financial stringency had passed, or was passing. The speaker said that the fact that the Government was not taking any of the motor taxation this year was a move in the right direction. Previously the Government had taken a slice out of the Highways Fund and transferred it to the Public Works fund, and this had been a bone of contention. “One thing that will be welcomed by the business community is the reversion to the fiat rate for telegrams,” said the speaker. “The present system has caused business people a lot of trouble, and it must also have caused the Department a tremendous amount of trouble.” The speaker went on to say that probably one of the most satisfactory features of the Budget to the person who looked deeper than words or figures was the fact that the Public Works programme, which was an extended one, was to be carried out without any actual borrowing. What the speaker would like to know, however, was whether the public debt was actually being increased by borrowing from Government Departments rather than from the public. The Budget was not clear on this point. The speaker expressed satisfaction at the restoration of the cuts in old age pensions, which he considered was long overdue, and the additional provision which was to be made for the dependents of returned soldiers. Returned Soldiers The president of the South Canterbury Returned Soldiers’ Association (Rev. J. Milburn Stewart) expressed gratification that the Government had decided to make provision for soldiers’ widows who were married within seven years of their husbands’ discharge, instead of within two years, and also the bringing down of the War Veterans’ Allowances Bill, which is to provide for special pensions for former servicemen who are suffering disabilities apart from wounds or other injuries received during their war service. Besides these provisions, there is an increase of 7i per cent, in pension rates for dependents of soldiers whose pensions have been reduced, and a similar increase in the rates of economic pensions. General Taxation The view was expressed in one quarter that there would probably be disappointment that there had not been a remission of genera) taxation, but there would be gratification at the fact that the Public Service was to benefit to some extent. The business people, also, would welcome the return

of the flat rate for telegrams. The varied rate had been very unpopular, and had been a retrograde step. The decision to introduce a sixpenny telegram for six words was a bold measure, but would probably prove very popular, as it made possible cheap and rapid communication. One point touched on by one businessman approached was that the Government had done nothing in regard to a national unemployment insurance scheme. The matter warranted investigation, particularly by people in business, because the proposal should be thoroughly familiar before any definite action was taken. The national housing scheme foreshadowed would be watched with interest, for it was in line with what was being done in other countries. Chamber of Commerce The president of the South Canterbury Chamber of Commerce (Mr G. H. Andrews) said that it was very gratifying to see that there had been a surplus A balanced budget was indicative of returning Dominion prosperity but he regretted that no relief in taxation had been found possible, particularly in regard to the sales tax, which was generally admitted to be an iniquitous one. When the tax was removed, ample warning of its removal should be given, to enable wholesalers and retailers to make some arrangement against loss on stocks which have borne the tax. The restoration of the wages and pension cuts was a step in the right direction. A large number of local authorities and private employers had already done likewise, and in increasing the spending power of the people, they would be helping towards a return of confidence and prosperity. Mr said that personally he did not agree with the reduction in the wages tax, as he thought the average person would rather pay it than have so many charitable appeals which in the majority of cases, disrupted business. He preferred to see the tax retained, and as the necessity for unemployment disappeared, that the funds thus available be applied to a national insurance scheme. Taxation on those able to bear it should not be reduced until all the employable workers were rehabilitated. Mr Andrews went on to say that the extension of public works schemes should materially improve the unemployment position. He added that the business community would appreciate the restoration of the flat rate for telegrams, which was advocated by the South Canterbury Chamber. Still more use would, however, be made of the service if telegrams were 9d for 12 words as formerly, instead of the new rate of 'll- for 12 words. CIVIL SERVICE COMMENT B? Telegraph—Press Association WELLINGTON, September 18. Commenting'on the Budget, Mr F. W. Millar, general secretary of the New Zealand Public Service Association, said the Public Service was naturally disappointed that the salary restoration proposals did not date from April 1, and that there was to be no full restoration. The 7 i per cent, increase still left salaries below the pre-depres-sion level to the extent of approximately 3i per cent, for officers receiving under £225 per annum, and 85 per cent, for those receiving over that amount with the exception of administrative and other higher paid officers who would still suffer to the extent of 111 per cent. “Nevertheless,” added Mr Millar, “that disappointment is tempered by the clear evidence in the Budget that the Government is endeavouring to live up to its undertaking that salaries would be restored as conditions improved, and recognises the priority of the Service claims. The announcement that the postponed five-yearly general regrading will probably take place in 1936 calls for an expression of appreciation, too, as does the inclusion in the estimates of a provision for an additional subsidy (as was granted last year) towards the Service superannuation funds.”