The Timaru Herald SATURDAY, FEBRUARY 25, 1939 BIGGER BURDENS FOR ENTERPRISE.

Timaru Herald, Volume CXLV, Issue 21280, 25 February 1939, Page 8

The Timaru Herald SATURDAY, FEBRUARY 25, 1939 BIGGER BURDENS FOR ENTERPRISE.

Although the Minister of Education in the course of his electioneering campaigning in South Canterbury gave an undertaking that all the benefits provided for under the Government’s Social Security Scheme would be financed by the collection of an additional 4d in the £ on wages and salaries, the real cost has now been disclosed involving not only an additional hindrance to private enterprise in the form of a penalising tax on companies, but a deficit estimated by the Minister of Finance at something like £2,000,000 to be collected “somewhere,” which means of course out of the pockets of the taxpayers. It is clear that the sponsors of Social Security have not been able to furnish a reliable cost of the scheme. The Minister of Education was positive that an extra 4d in the £ would “do the trick.” It lias now been reveiled that the cost of the scheme even in its initial stages of implementation will substantially exceed all previous estimates. The biggest share of the additional load will now have to be borne by companies. This tax, which will impose a fresh burden of 1/- in the £ on companies’ income will be levied, according to the regulations issued this week, “in the same manner and on the same dates as charges payable by persons other than companies.” It has not yet been estimated just how much this tax will yield, but it is safe to say that this additional burden will place a bigger burden on commercial and industrial development. Even if it could be shown that the provision of Social Security can not be financed by the transfer of funds drawn from the old employment promotion levies and taxes, it is obviously unfair and shortsighted to impose a blanket social security tax of 1/- in the £ on income on all companies regardless of the part each group of campanies contributes to the national economy. It is moreover somewhat ironic that synchronising with the appeal the Minister of Industries and Commerce to manufacturers and commercial enterprises generally to expand their industries and absorb thousands of men now engaged on unremunerative employment, the Minister of Finance should be framing regulations to raise additional hurdles in the path of private enterprise. It is not denied that there are companies operating in New Zealand which can, without inconvenience make substantially greater contributions to the national purse, but it is also true that thousands of companies that provide work for tens of thousands of New Zealanders will find the new tax a definite burden and a restraining influence on expansion. Moreover, the additional burden now proposed to be imposed on all companies will certainly make investment in New Zealand industries less attractive and so defeat the aim of the Minister of Industries and Commerce who is active in the campaign for the expansion of New Zealand industries in the hope of absorbing thousands of able-bodied workers now engaged in uneconomic employment.