TAXATION AND VALUES.

Auckland Star, Volume L, Issue 223, 19 September 1919, Page 8

TAXATION AND VALUES.

■ GOVERNMENT'S 3?OUCY XTNDEK FIRE. j ANCIENT LAND VALUATIONS. (By Telegraph.—Parliamentary Reporter.) WELLINGTON, Thursday. For the first time for many years Parliamentary Opposition commenced to again function in the House, when the Government's apparent failure to adapt its financial policy to the new situation! "was criticised by members, who also] made a point of the out-of-date valuations on which land tax i= paid. The Land and Income Tax Bill came up for its second reading, the Finance Minister making no introductory comment, except that taxation was the same as last year, tecause the returns were already made out. Mr. McCallum took: the opportunity to urge a general revaluation, as many large properties were grossly undertaxed owing to the valuations being out of date. The Hon. Buddo took the same line, pointing out that taxation was very uneven, as gome districts had not been valued for eight or nine years. Mr. H. G. Ell expressed disappointment that no reduction of taxation had taken' place. He considered doing away with' the mortgage tax was a blunder, because it had not relieved the borrower. Mr. McCombs asked why the Government sought to continue anomalies in past years' taxation legislation. Opportunity should have been taken to remove the tax on. tea and impose an excess profits tax. Mr. Fsyne advocated direct action against land aggregation. He would; not trouble about land tax, preferring to levy on incomes. Every member knew that taxation was inequitable, but no private member could amend a taxation MIL - "UNFAIR BASIS OF TAXATION. Sir John Findlay urged differentiation between earned and unearned incomes. Tn progressive countries this distinction | was observed. The majority of valuations! in New Zealand had been made several years before the war. This implied that taies were paid on a sum probably o0 per cent, less than the true value, but those -who worked in callings or professions were taxed on incomes year by year, on a hundred per cent, basis, while the land-owner escaped on a 50 per cent, basis. Those -who paid taxation through the Customs were not taxed on pre-war values, but on inflated war prices. Three hundred per cent, more Customs taxation =was paid on imported socks. The duty on ladies' cotton hose before the war was 1/10 a dozen pairs; to-day the duty was 5/11. Mr. Nosworthy: The rate of duty is the same. Sir John Findlay: Yes, but paid on today's value, though'the landowner does not do that. We ought to be fair to every class. AN UNSUPPORTED AMENDMENT. The Hon. G. W. Russell asked how far the Government wae justified in taxing the people beyond the requirements o* the current financial year. He recognised it was good policy to build up a reserve during the war, and it was In-j teresting to see what the new Finance] Minister would do with the fifteen accumulated millions. He saw no change in fiscal policy to meet the new conditions" arising out of the war. Were they the sort of proposals <which would help to bring in a new era? Capital values in 1917 were £405,000,000, showing an increase of £255,000,000 in ten years, while unimproved values increased by £102,000,000. Customs taxation increased between 1910 and 1917 by £1,300,000, thongh land tax only increased in the same period by £71,000. In view of the I new era we are asking for, continued the I speaker, we should put the saddle on the strongest horse and make those pay who profit by enhanced values of land through railways, refrigerations, and expenditure on harbours. Finally, he moved an amendment that the debate be adjourned to enable the Government to reconstruct the direct taxation policy of the country on the following lines": >(1) Restoration of graduated land tax; on estates of over £10,000 in value: ! (2) establishment of a sharp graduated tax on private incomes of over £20,000 per year; (3) readjustment of taxation | on. incomes of companies in order to | allow small investors to receive 10 per cent.; (4) limitation of dividends and profits by joint stock companies to 10 per cent.; (5) restoration of tax or mortgages, making the tax payable by mortgagee. As no seconder was forthcoming the amendment lapsed. ".-Mr. Holland, who followed, explained that he refused to second the amendment fcecanse it simply represented a quarrel between two sets of Labour's opponents. Labour wa3 determined that those who reaped the benefit of the war should pay I their full share of taxation. It had no] confidence in either the gentlemen on the! Government benches or those who sat in a sort of mock Opposition. Anstey declared that the method -j of levying the graduated land tax 6eemed to be to keep estates as large as possible to get large taxation, instead of using it to enforce subdivision. Eeally drastic changes in our taxation were needed, -because they favoured the idle wealthy and monopolies. MINISTER ON REVALUATIONS. The Minister, in the course of his rep}j> said he did not pretend that taxation in New Zealand was perfect, but he contended— and a good many people did not know it—that much hail been done in the taxation of this -country to relieve i hardship. He proceeded to "instance a number of special exemptions to remove hardships on people with email incomes. He admitted that there was certain amount of hardship inflicted in the taxation of companies, but money had to be obtained in war time. Before the war this matter was under consideration, and in all probability some suggestion would be made in the shape of an amendment to the present law. The Minister pointed out that under the Taxing Act of 1317, the Commissioner was given power to ease taxation on dividends of shareholders whose incomes did not exceed £400 a year. The Minister contended that very heavy burdens had been placed on laree incomes and large landowners. The Customs taxation was scarcely more than half that paid by income tax payers. He regretted exceedingly that he was not in a position to reduce heavy taxation. As Minister of Finance he would be only too pleased to know that the whole country could be revalued tomorrow, but it was a practical impossibility during warrtime. the reason being that men were away fighting instead of revaluing land. He hoped the Minister in charge of valuations would at an early date, have a revaluation of the land as fa-st as he could, and then the burden of taxation would he more equitably placed on those who ought to bear it." Those who were on the land, which increased in value during war-time, ought to pay. tend. he. would be pleased to repressn£ to

his colleagues that the "Minister of Finance urgently required more revenue, and it might come out of increased valuations. The Minister added that it -was (impossible to attempt anything in the way of alteration in taxation this year, as all the revenue would be absolutely essential. He hoped next year, by more production and by more normal conditions regarding expenditure generally, that taxation might be reduced. If it were so. he was sure those gentlemen on whom the tax would fall would take notice of what had been said that night. The bill went through committee, and the third reading stages without further discussion, and was passed. « ■