The Waikato Times. With which is Incorporated Tho Waikato Argus. WEDNESDAY, JULY 29, 1931. THE COMING BUDGET.

Waikato Times, Volume 110, Issue 18393, 29 July 1931, Page 6

The Waikato Times. With which is Incorporated Tho Waikato Argus. WEDNESDAY, JULY 29, 1931. THE COMING BUDGET.

There is a great delay In the presentation of the Budget, and in spite of protests this delay takes place every year. We arc never able to know what taxation is to be until more than four months out of the twelve have passed. It is natural that under present conditions much Interest should bo felt and much speculation Indulged in respecting the forms which fresh taxation will take, It Is easy to point out the hardships entailed in any fresh form of taxation, but the truth is that hardships must be endured by everybody, and the real problem before us is how to adjust taxation to provide the money with a minimum of hardship and Injustice. The natural tendency of'- men is to suggest that others should be taxed, and some classes have been so successful in this that they have pushed taxation to a figure where the yield diminishes instead of increases. This has been the effect in liquor duties, where the tax on spirits has curtailed the Importation and the excise on beer has diminished the consumption. It is quite true that hard limes may have had much to do with this result, but the lesson to those who have to initiate taxation is plain that Increased duties will not mean increased revenue. An increase in the duty on petrol has also been suggested, in spite of the fact that an increase was imposed last year. It is possible that the effect of a further increase in duty would have the same effect as the increased duty on liquor. Another suggestion is that of Increasing the primage duty on all imported goods; but here again we must not lose sight of the fact 1 that increased duties raise the cost of living and raise it by much more than the sum obtained by the Government. Direct taxation is a more economic method of raising revenue; what people pay the Government receives with the smallest reduction for expenses. A more promising method of raising money will be through the Income tax. A suggestion has been made that the line of exemption, £3OO, should bo reduced to £250. Our own proposal would be that It should be reduced to £2OO. The contention that the tax on smaller incomes would not pay the cost of collection is ridiculous; every local body in ,the country collects many rates of a smaller amount than the lax would be. Many big businesses handle the* accounts of a larger number of customers than there are income tax payers in the country, and these firms do not disdain to collect sums of 10s. The indirect advantages of increasing the number of income tax payers are very great. By reducing tiie limit of exemption to £2OO we should automatically increase the graduation on all incomes, and thereby obtain a largely Increased amount; and, at the same time, by bringing within the circle of income tax payers a larger number of those earning wages, we should enlarge the proportion of the population which has a direct interest in economy. At present far too many of the population are interested solely in spending, and although they pay taxes through Customs duties they do not realise it, and their votes go towards stimulating expenditure, never to restraining it. Some years ago the upper limits of income taxation were much higher than at present, and if Mr Forbes Is the courageous man that his friends claim him to be he will go back to those higher limits. It is not that we consider these higher limits to be In themselves admirable, but necessity knows no -layv; we must balance our Budget if it is in any way possible. Labour has made its sacrifices, and Capital must now do the same. In the urgent necessity for reduction of costs and a decrease in the cost of living It is to be hoped that the Government will not be tempted to obtain their revenue through the Customs. It should be remembered that a fall in the cost of living is a debt of honour to the working classes. The perpetual grievance of the wheat tax is patent to everybody; but it is not realised that all Customs duties operate in the same direction, if not to the same extent. We cannot do without Customs duties, but they should be on a strictly revenue basis. We have duties in this country which raise costs and yield no revenue. The duty on cement has increased costs to every local body in New Zealand, and has yielded nothing to tho Government —“Cut it down. Why cumboreth it the ground?" If the duty were abolished we should use more cement and none of it would be Imported. Mr Ford has publicly preached the doctrine of increasing the turnover by reducing prices, but the world is slow to learn it. 'flic taxation which is inevitable will arouse opposition on all sides, and as an election approaches there will bo opportunities for electors to vent their spleen. Candidates commonly succeed by making promises which the unthinking take at their face value. The coming election will probably turn more on what lias been done than on promises of what will be done. There is a fear that the Labour Party, which has so strenuously resisted sacrifices which it was necessary that Labour should make, will profit by tho votes of tiie unthinking, and for that purpose there are strong reasons why the other two parties should arrange their election campaign in such a manner as not to fight each other in constituencies where one or other party has slight hopes of success.