RAILWAY WORKERS OBJECT TO CUTS.

Star (Christchurch), Volume XLIV, Issue 62, 14 March 1931, Page 1

RAILWAY WORKERS OBJECT TO CUTS.

WANT GRADUATED TAX TO BALANCE THE BUDGET A statement protesting .against the proposal to cut the salaries of the Civil Servants has been issued by the Amalgamated Society of Railway Servants. As the most equitable means of balancing the Budget, the A.S.R.S. suggest a graduated increase of income tax. The statement reads as follows: The deficit in revenue for the financial year 1931-32 as estimated by the Prime Minister amounts to £4,500,000. When issuing his statement on February 14, Mr Forbes set out the steps which he proposed to take in order to balance the Budget next year. The Amalgamated Society of Railway Servants agrees with the principle of a balanced Budget, and recognises that if Mr Forbes's estimate is correct, either expenditure must be reduced or additional taxation imposed. Mr Forbes proposes to meet the deficiency in the following manner: — £ A 10 per cent reduction in wages and salaries of Civil Servants 1,500,000 Increased Direct (Income Tax) and Indirect Taxation (Customs Duties, etc.) 850,000 Increased postal charges 900,000 Reduction in sum set aside to redeem Public Debt —adjustment of H ighways Fund, etc 1,250,000 £1,500,000 Not Equitable. Without commenting on the other items, the A.S.R.S. affirms that the proposal to reduce the wages and salaries of Civil Servants is against every principle of equity and good conscience. It entails a special levy on a body of employees which has rendered, and is rendering, splendid service to the community.® The A.S.R.S. proposes to set out some facts which have led up to the present situation and to then ask readers to examine its policy for readjustment. The latest external trade figures are published in Bulletin No. 13 of the Department of Industries and Commerce. Accepting the orthodox economy that an exCes sof imports over exports is an adverse balance of trade, we find that the year ended December 31 last showed a better balance than in 1921 or 1926: but the significant figures are those for 192 S and 1929. No two successive years since 1914 have shown so favourable a balance as these years. It is admitted that the fall in the price level has resulted in a decreased return for our exports during the past year, but the workers, neither in nor out of the Public Service, shared in the remarkable prosperity of the years 1928-29, and it is against all the principles of equity to make a special levy on them to balance the lean years. Income Tax Increases.

A table shows that since 1922 assessable incomes have increased by £27.033.548. while the tax assessed has declined by nearly £3,000.000. It is from this source that the A.S.R.S contends that the Government can most equitable obtain the revenue necessary to balance the Budget. One of the tests of good statesmanship is to levy taxation where it will create a minimum of hardship to the taxpayer, and we contend that a graduated increase of income tax which, as the Prime Minister states, “ is not only the most equitable form of taxation, but the one that has the least effect on working costs,” will accomplish this. We suggest that, while the assessable incomes have increased by £27,000.0(H) and those in receipt of them are paying £3.000000 less in taxation, the proposal to make a special levy on the Public Service is inequitable and should be dropped, and a graduated tax on incomes of individuals be substituted in its Stead. That the revenue is available from this source is proved by the latest information on incomes. Presuming that the incomes for the year ended March 31, 1930, showed a decline of 20 per cent, there is still an ample margin for a graduated tax on them sufficient to meet the deficiency

without inflicting hardship or privation on any individual, and this would b* more just and more in accord with New Zealand traditions than to make a special levy on Civil Servants and wage earners. Points Summarised. A summary of this statement shows: 1. That production has broken all records. 2. That the years 1928 and 1929 showed the best balance of trade of anvtwo successive years in the history of the Dominion. 3. That the incomes of the workers in and out of the Public Service were not increased in the prosperous years of 1928 and 1929. 4. That the latest figures available show that assessable income in 1929-30 totalled £65,380,217, and that this figure exceeded the incomes of 1921-2 br £27,033,548. 5. That the income tax assessed' in 1921-2 was £6,266,678, as against £3,322,672 in 1929-30 (£27,000,000 more income—£3,ooo,ooo less tax). 6. That three Individuals last 3'ear shared an income of £71,423. and that incomes of individuals in excess of £IOOO totalled £13,755,349. and that if Individuals in receipt of incomes exceeding £SOO are included the total amounts to £26,117.594. 7. That it is unjust to make a special levy on railway workers and other public servants. 8. That, acting on the principle of levying taxation according to abilitv to pay, the deficiency should he made good by a special tax on Individual incomes in excess of £SOO. 9. That if this principle is followed the members of the civil service who are in receipt of taxable Incomes will pay the same as those out of the service. WILL NOT A FALL IN PRICES LOWER WAGES>] Will not a fall.in wages mean a fall in prices, with a further demand for lower wqges? asks a statement issued by the Amalgamated Society of Railway Servants. The A.S.R.S. fear that in the event of such a situation the standard of living would come down to that ruling in other countries. An extract from the statement reads:— “Mr Forbes says that the necessity for the reduction in salaries is due to the fall in prices, and states that he expects that the reduction in wage and salary costs will bring prices down still further. But if this result should be achieved will not an agitation arise for a further reduction in wages to meet this further fall in prices, with succeeding agitations until the New Zealand living standard is down to the level of that in other countries?”