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Salient. An Organ of Student Opinion at Victoria College, Wellington, N.Z. Vol. 13, No. 11. June 8th, 1950

Lost £12,000,000

Lost £12,000,000

First, I join issue with JB on the way he has treated the £12m saved by the abolition of subsidies. The original system made this sum a transfer from taxpayer to consumer. By eliminating the payment, without reducing taxation, Mr. Holland has made £12m available for military training and to meet the deficit in Social Security. John Blunt failed to explain that, while no cash saving is evident to the taxpayer, the money used in this way avoids the call for an additional £12m elsewhere. Had it not been available, it would have meant other economies, higher tax[unclear: es], loan, money, or Reserve Bank credit.

The question we must [unclear: ask] is—does the citizen gain or lose in his dual role as taxpayer and consumer. If we assume that Mr. Nash had carried his "soak the rich". taxation as far "as possible, and had explored every other avenue, it would have been necessary for Mr. Holland to have increased taxes all round to secure an extra £12m. Therefore by losing subsidies and avoiding extra taxes, the average consumer is little affected. It is conceded that basic wage workers with large families will be worse off, and Mr. Holland has promised a review of wages and Social Security to compensate.