TAXATION RELIEF

Waikato Times, Volume 195, Issue 22513, 23 November 1944, Page 6

TAXATION RELIEF

NEEDS OF PRODUCTION DEAD WEIGHT ON INDUSTRY (Special to Times) PALMERSTON N., Thursday “Apart from the very important matter of rectifying the serious taxation anomalies that exist, the case for the most immediate possible relief from the weight of taxation on productive enterprise is a strong one,” said Mr Stronach Paterson in his presidential address to the Associated Chambers of Commerce last night. “As the journal, the Scotsman, stated in a recent issue: An unfortunate effect of life under war-time conditions is the impression created that all economic ills can be cured by a sufficient degree of government spending. It is forgotten that governments, like individuals, cannot run into debt indefinitely on an increasing scale without courting disaster, because governments are only the representatives of a group of individuals who are running themselves into debt collectively. “It is true that internal debt is only a re-distribution of money, but in time those who have to pay the interest on it begrudge the payment, and those of the community who have lent the money may refuse to lend any more. So it is with regard to the industrial structure. Industry has to pay the bill represented by the debt burden in the shape if taxes. For Full Employment “To maintain full employment, or something approaching it, demands an energetic spirit of enterprise in industry, and if industry and its handmaiden, finance, are controlled on the one hand, and taxed on the other, with no recompense for losses, money will not find any attraction in enterprise. “The State is the biggest partner in industry and commerce by virtue of the share of profits it takes from it. Yet industry and commerce have to accept all the risks, the State taking none—except that of cessation of tax revenue, which is a quite different matter from loss of capital. It appears to be taken for granted that under post-war conditions industry and commerce will be prepared to accept the position allotted to it of maintaining a high scale of activity irrespective of the reward. Lack of Attraction “Political opinion apparently fails to take into account the possibility that capital, whether that of small or large savers—and it is the small savers who must provide the capital of the future—might find industry insufficiently attractive to provide for the development of new industries, having regard to the limit on reward with no limit to possible loss. “Schemes for social security and freedom from want can only work and continue to work if the' national economy produces in continually increasing quantities those articles that are necessary to give everybody decent housing, decent food, decent clothing and those amenities of life that have become a part of modern civilisation. Public works, or increased production of houses, or fixing the levels of wages alone cannot solve this problem. It can be solved only by an adequate part of the nation’s productive capacity being used for the extension of that capacity, leaving a sufficient part available for the productioh of consumer goods.”