The Parliamentary Secretary to the Minister for Finance stated that there were three things we should concern ourselves with in connection with this tax:— (1) that if we objected to it we should provide an alternative; (2) that we would have to make up our minds that we were going to balance the Budget, and (3) that we should submit information regarding the particular items in the nature of a reduction of expenditure which would save the amount. I do not subscribe to the view that it is quite in order to discuss these three items on this particular Resolution. The plight in which countries that have not balanced their Budgets have found themselves is much the same as the plight of the individuals who live beyond their means. It spells disaster and brings disaster in its train; it promotes unrest, causes a rise in unemployment, and has placed the majority of these States, in fact all of them who indulged in that particular orgy, in a very bad position financially, industrially and politically. Nobody that I know of in this country has suggested that it was undesirable to balance our Budget. Everybody, I think, has subscribed to the proposition that the Budget should be balanced. But just as important an item as balancing the Budget is the question: At what price and cost of expenditure is the Budget going to be balanced? In that connection, one is faced at once with the necessity of raising a particular sum of money. This Budget has reached such a height of expenditure that the Minister has been forced to put a tax upon industry, upon the professions, and upon every phase of commerce and income in this country, a tax which, in our opinion, is beyond the capacity of the people to bear.
Last year the yield from income tax in this country amounted to about £4,600,000. I believe that the yield from income tax in England was something like half the entire amount of the Budget. It may be a one hundred million short of it, but at any rate it was in that neighbourhood. The main point is, that the revenue in respect of that particular service is very dissimilar in the two countries. It is fairly obvious from that, that we are not in a comparable position with regard to the British people in that respect. Still we are seeking to impose a tax here which has the same weight as the British, namely, 5/- in the £. As other speakers have said, there is, in addition to that tax here, another one which we will discuss later on. It has all the evil influences and bad effects of income tax. It has not even the single virtue that there is in the case of income tax, that is to say, that if a person has not an assessible income then relief is given. It scarcely matters who it is that pays the income tax, whether it is the customer, the trader, or the manufacturer. So far as the industry, commerce and business of the country is concerned, that sum of money is going to be arrested from oiling the wheels of industry or helping the course of trade. It is going to be taken from industry and commerce and other activities in the State. It is going to be interrupted from State activities at a time when conditions in the world, and I should say now in this country, are by no means promising, when prices are falling, when dividends are falling, and when the value of stock is diminishing, when even the Minister himself is forced to admit that the total income is much lower than it was in 1927, '28, '29 or '30. This certainly is not the time to increase expenditure, and in consequence to increase taxation.
We have been witnessing, within the past twelve months, something that people never thought they would live to see, and that was the flight of capital from Great Britain. What occasioned it? High taxation and, to some extent, the impression that gained ground that the Budget was not balanced, but one certain conviction was before not alone the minds of the people of England but before the minds of all the financiers who were concerned with the security of their cash, and that was that they were living beyond their means. That is the thing that we have got to consider here, whether or not this tax is going to put us in the position of living beyond our means. Take this tax and three or four different classes in the community that it affects. In the first place, there is industry. It does not affect, no matter at what high price you put it, any foreign firms operating here or registered outside the country. It affects our own citizens and residents subject to taxation here. It affects business concerns here that are competing for trade in Great Britain and in other countries, and there are many of them. They are not confined to any particular class or commodity of manufacture.
Within the last twelve months I had a deputation from a certain industry in this country. They presented information to me that certain goods were going to be brought in here at a price with which they could not possibly compete. Those at one end of the table concerned themselves with the importance of this new offensive on their business, and when the whole case had been made with regard to that, then those at the other end of the table began to perform. One man said that 25 per cent. of his trade was with Great Britain and he did not want that hurt. Another man said 50 per cent. of his trade was with Great Britain and he wanted to be assured that in any steps that we took to correst this new offensive no inroads would be made on the export of his goods, while the third man said that 75 per cent. of his trade lay there. What is the position of these three men or of all the other people who are exporting goods out of this country in connection with this 5-/ income tax? For five years, until November last, they were competing with British manufacturers at an advantage to themselves of 2/- in the £. How do they stand now? Now they are on the level. Are we industrially as well developed as they are in Great Britain? So far as our manufacturers and industrialists are concerned they are certainly now at a disadvantage in meeting competition on the other side. Further, we find that there are some firms in this country which have branch establishments in Great Britain. What is the position of those firms at the moment? I am aware that it would be out of order to discuss the corporation profits tax on this Resolution, but in essence these firms are competing at a disadvantage with their own branch establishments in Great Britain at the moment. That is not good business. Some Deputy mentioned, a moment or two ago, that this Budget was correcting all the imperfections of the last 130 years, and that we are now getting to be a separate, self-contained, self-supporting entity. Let us examine, for a moment, what the attractions are to business men, industrialists and manufacturers to come in here. Leaving aside for the moment any levity there was in the speech of the Minister for Finance, in introducing these various proposals, the fact is that a steep rise has been occasioned, since the introduction of this measure, on industry and on manufacturers. This steep rise occurs at a time when world depression was never more pronounced. What is the lesson to be learned by a manufacturer or an industrialist in connection with that matter? It is this: "By jove, if they have the courage to put on these taxes when things are bad, what will be their courage when things are good?" That is the invitation that is issued now to all the various people who are involved in the enormous anticipated revenue of £910,000 from the tariffs that have been imposed.
It was the policy of the late administration when they imposed tariffs to get employment here, and not to take revenue. Revenue was not the main consideration. Revenue was a consideration to this extent, that, if one particular line of taxation were removed, we were entitled to make what might be called governmental speculation on the success of the tariffed industry, but here in this present instance, industrialists and manufacturers are invited to come in with income tax at 5/- in the £. It has been stated that people will have to reduce their establishments and contract their employment. One business man I know in the City, who is identified with quite a number of public utility and other commercial activities, informed me this morning that one firm alone has definitely decided on a saving of £20,000. How is it going to be done? There is only one way to do it and no matter in what direction it is done the business of this City is going to be lessened by that £20,000. Where is it going? Into the pockets of the Treasury. It is the same way with the smaller people, in no matter what walk of life. This taxation is going to hit that much money which is going to be erased from whatever source into which it flowed before. The various philantropic societies, charity organisations and other such people must suffer by reason of this big increase, and no possible explanations of our ultimate intentions to reduce this tax will satisfy people who intend, or who had intended, to invest money here. It ought not to have come at this time, above all others, when, if the Ministry's own pronouncements can be taken at their face value, they intended, and wished for an industrial expansion.
Looking over the events of the last ten years, I find that there has been a steady increase in the sums of money coming in here from unemployment insurance and the persons in insurable occupations. There has been a steady increase all along, and what other country is there that could show such a condition of affairs during these ten difficult years? The number of people in this country engaged in gainful occupations is given somewhere about 1,300,000; and the number of unemployed, large and important as it is, is certainly not either as important, or a matter of such consideration to the Government or to the Parliament as that 1,300,000 people. If the other nations of Europe, and America, had kept their concentrated attention on this one figure during the last ten years, you would not have the present depressed condition of affairs, and we are now invited to embark on practically the very same downward path, in these experimental arrangements, in order to give some improvement to the 80,000 people, losing sight of the fact that our main consideration ought to be the 1,300,000 people who are engaged in gainful occupations in this country.
This ought not to be a matter of political debate at all. It is a matter of business and ought to be dealt with on a business basis, and I would certainly say that the Ministry will get every assistance and co-operation in dealing with every and any economic problem, if they deal with it on purely business lines, apart from political considerations.
