The Wanganui Chronicle. WEDNESDAY, DECEMBER 14, 1949. SALES TAX FREE APPLIANCES

Wanganui Chronicle, 14 December 1949, Page 4

The Wanganui Chronicle. WEDNESDAY, DECEMBER 14, 1949. SALES TAX FREE APPLIANCES

HOLLAND promises that the sales tax upon labour-saving appliances used in the home will be removed as soon as possible. This will be good news for the home-makers of today and for those who have not been able to equip their homes with laboursaving devices. It is not appreciated the extent to which laboursaving devices make for social convenience. Immediately the traveller from New Zealand steps into a primitive community the first thing that strikes him is the fact that the ordinary work of the home takes much longer to accomplish than it does in New Zealand. When water, instead of being drawn from a tap, is taken from a well or tank and, instead of switching on the electric current a wood fire has to be built, the housewife thinks twice about asking a visitor to have a cup of tea. When every lamp has to be trimmed before the evening meal can be consumed it follows that there is no time for entertainment around about five o’clock. Everyone must help to prepare the evening meal and to clear up afterwards, after which there is not a great deal of the evening left before bedtime.

New Zealand homes, since the pioneering period, have always been well equipped with labour-saving devices when compared with less favoured countries, the chief among which is, in recent times, the supply of electricity. But electricity also leads on to a wider field of utility and the electric “gadgets” of the modern home combine to give the family, and especially the housewife, more time to herself, or, alternatively, the opportunity to enrich family life.

A tax upon domestic aids is a direct tax upon the standard of living to reduce it. Unfortunately it operates against the low income groups to deny them those things which more fortunate families can have. Thus is the breach between the medium and lower income groups made wider notwithstanding the apparent slight difference. In this practical world it is not so much the possession of a higher income, but the absence or presence of a family that causes one home to be equipped and another to be without the equipment. The woman who is mothering a family is, therefore, denied aid when appliances are taxed and put beyond her read). This is hardly the way to encourage the. raising of a now generation of New Zealanders.

One of the essentials of family life is that of pure water. In New Zealand this is taken for granted in the general run of living. When in tropical countries, however, it is necessary to boil all water before using it for food preparation or drinking purposes, drawing drinking water from a tap becomes almost a miracle. The first essential of sound health is satisfactory water and yet in New Zealand today water is taxed. There is no sales tax imposed upon the actual flowing water, but as the water could not flow were there no conduit a tax upon the water-mains means a tax upon water. Municipalities concerned to provide for additional populations must, in carrying out that service, although no profit is made out of the business, pay a sales tax upon water-mains purchased today. While, no doubt, Mr. Holland does not contemplate including water-mains in his category of domestic appliances when he contemplates reducing the sales tax in this particular field, there is no reason why this domestic service should be so taxed. The tax upon water-mains was imposed when it became necessary to have some funds to meet the cost of putting unemployed men to work. The local bodies that could afford to import water-mains then had the advantage of a low price and a low cost of installation, but the tax was only to be tolerated by reason of the extreme difficulty then confronting the country. Yet, notwithstanding its character and its imposition being only justified by the'extreme conditions prevailing when it was introduced, Mr. Nash failed to remove this tax during the fourteen years of his reign at the Treasury.

The sales tax being removed from domestic appliances will meet with general approval, hut such action raises another one by implication. If the sales tax is to be removed from aids to work in the home, what justification is there for retaining the sales tax on aids to work in the factory and office? Actually the factory is no more than an extension of the home. The spinning that was done beside the hearth is now done in the woollen mi|l. The jam that was put up in the kitchen is now produced at lower cost in the factory. The clothing that was made by the cottager is now made in the clothing factory. The factory has been able to displace, domestic work in the factory’s particular field because of the convenience of organising the tasks of the producers and aiding them in those tasks with machinery and tools that would be too expensive to install in the home with its limited demand for the products.

While, therefore, Mr. Holland is justified in starting on domestic aids- to remove the sales tax, there, is no reason why he should stay there. He should aim to extend this sales tax remission to the commercial production field as well. A Finance. Minister, however, must always keep his eye on both sides of the public ledger. When he remits a. tax he must expect, to have a reduced income and a reduced income limits his capacity to distribute largesse. The public should be made aware that a tax remission is much more satisfactory than a “gift” or “benefit” bestowed by the Government. No Government ever bestowed any gift or benefit. All it ever did was to take the money out of the taxpayers’ pockets with one hand and give it back to him with the other. But the operation of collecting the tax and paying it out again was. and is. an expensive one, and that cost must be deducted from the recipient. The operation, when multiplied, makes for an enlarged public service, a higher cost of “government” and a lower standard of living to the extent of such cost. In fine, it is more of a gift to the taxpayer to be able to bring up his family on a large portion of his income than it is for his taxation to be high and various family benefits to be increased. A cash distribution is more fascinating than a tax remission, because, while the former is to be seen each week-, the latter is hidden. The less spectacular method, that of reducing taxation, however. is the more beneficial and the man with the greater concern for the welfare of the people will always take the less spectacular path because of the benefits achieved.