THE BUDGET

Timaru Herald, Volume CXLII, Issue 20481, 28 July 1936, Page 6

THE BUDGET

PRESENTATION NEXT TUESDAY

INDICATION OF POSSIBLE POLICY (From Our Parliamentary Reporter) WELLINGTON, July 27. An indication of the possible taxation policy to be disclosed in the Budget was given in an interview this evening by the Prime Minister (Rt. Hon. M. J. Savage) after an all day caucus meeting of the Government Party. Mr Savage said that although it had been hopea that the Budget might be ready for presentation this week, it now appeared that it would not be introduced until next Tuesday at the earliest. Sales Tax In answer to a question concerning the Government.' proposals with regard to the sales tax, the Prime Minister said that no widespread alterations could be made in that direction this year. The Government still proposed to remove the sales tax as soon as passible, but with conditions as they were at present the tax could not be removed unless an equal amount of revenue was assurea from some other souj-ce. It was gathered from Mr Savage’s remarks that no lowering of the sales tax is '•ontemplated, although the possibility of the exemption of some further classes of goods from the incidence of the tax cannot be dismissed. Company Taxation In answer to a further question, the Prime Minister said definitely that it was not proposed to make any alterations this year in the system of company taxation. There have been suggestions recently that the rate of the company tax might be reduced, and that individual company dividends might be assessed for ordinary income tax purposes. However, in view of the Prime Minister’s statement, these suggestions can be regarded as unfounded. Mr Savage resolutely declined to be drawn into any discussion as to the Government’s proposals with regard to income tax. “You will see the Budget soon,” was his only reply to a question as to whether alterations in the rate of the tax would be made. Accordingly opinion that the income-tax is likely to be more steeply graduated this year appears to be strengthened. Customs Tariff The Prime Minister also stated that no alterations wotn'l be made in the Customs tariff as a result of this year’s Budget. “We are only making a start with our financial policy In this year’s Budget,” Mr Savage continued. “We realise that we cannot change the whole system overnight. However, we are appointing a committee of interested members from the Government Party, together witr. the departmental experts, to examine the whole taxation system and bring down a report on the question of future policy. This report will probably be utilised in the framing of next year’s Budget.”