TAX REDUCTIONS.

Auckland Star, Volume LV, Issue 211, 5 September 1924, Page 8

TAX REDUCTIONS.

TOTAL OF £900,000.

LAND AND INCOME. TOBACCO TO BE. BELIEVED. AMUSEMENT TAX DIMINISHED. (By Telegraph.—Parliamentary Reporter.) WELLINGTON, this day. A reduction in land tax of ten per cent and a reduction of 13 1-3 per cent in j income tax were announced by the Prime ' Minister in the House this evening, when explaining the contents of the annual Land and Income Tax Bill, introduced hy Governor-General's message. Mr. Massey said that with the 20 per cent, reduction in income tax made last year ! the total reduction was 33 1-3. He hoped to make further reductions as the session went on. He wanted to ask Par- j liament to agree to a reduction of the amusement tax by £45,000 approximately. : He would like to have wiped the whole thing out, but he did not think we could afford to do it this year. However, the reduction he indicated was substantial. He wanted also to reduce the duty on tobacco. That would require more formality, and entailed three months''notice. It was not in the present hill; he was j simply mentioning it as an indication of what he wanted to do. The reduction in tobacco would be a little short of £100.000 so far as he could judge, and it would be on cut and plug tobacco, but not on cigarettes. Mr. Masters: What about cigarette tobacco ? Mr. Massey: I am not touching that. Mr. Masters: It is very heavy. Mr. Massey said "it was more of a luxury than cut or plug tobacco. He was not a smoker, but he thought smokers should share in any reduction made. Mr. Masters: Ten shillings per lb is a heavy duty on cigarette tobacco. Mr. Massey: I understand that, but we arc making a pretty good beginning. If we keep on making reductions for another year or two the burden of taxation will seem less oppressive than it has been for some time past. Company Tax Remains. Mr. Wilford: What about company taxation? Mr. Massey: It is not in this bill.- I thought the commission recommended it should not be interfered with for two years. I will not say there will not be something in the next bill. Replying to Mr. Holland, who asked the amount of the reductions in the aggregate,' Mr. Massey said the decrease in Land Tax would approximate £135,000, and the reduction on income tax £583,000. He had indicated in tho Financial Statement, that he hoped to ask Parliament to reduce taxation by a million. These redactions would not run to a million, but roughly speaking would be about £900,000. Mr. O. J. Hawkcn: Any relief to mortgagors? '-'.-•' Mr. Massey: They come under the ordinary heading. ... Mr. Holland pointed out that the indirect taxation reduction was only £45,000 off - the amusement tax, and there would be a little less than JEIOO,OOO in case of tobacco.

Mr. T. K. Sidey: Do' you propose later 7 to- bring down an amendment to the land and income tax' in order to give effect to some of,the recommendations of the commission. Mr. Massey: I.have just said so. Mr. Holland said the reductions were not going.to benefit tbe small man. Air.'.Massey: Yes, they are. - . Mr. Holland said when the ten per cent reduction was . worked out from the tables used'by the Taxation Commissioner it would be seen that it would on, y confer benefits upon those wcll-to-do in the matter of land ownership, and ; the:income tax reductions would simply be. a gift to people well enough placed to:. bear their share of' taxation. When placed alongside direct tax reductions the, indirect ta.x _ reductions, which affected an enormously, large .number of people, would be infinitesimal compared to the reduction to'wealthy land owners and income tax -payers. . The Labour Party would i endeavour to resist their reductions, because they did-not think they . were .the right thing.

. Mr. J. . A. .Young pointed out that-the benefit of the tobacco tax reduction, when it came, would ,be more than ..£100,000,. because it had-.to be. borne .ti -mind. that merchants not only, passed on "the: present tax but also charged a profit •on the tax they paid.

A Labour not Satisfied. , Mr.' McCombs said the Government was making these reductions by reducingthe •■ standard of living of Public seri.-a.nts. He protested against reductions in land and income tax until the salaries of Public servants bad been reinstated to pre-war value measured in purchasing power.. The Premier could take Mt. Holland's speech as an indication . that the Government's proposals in this regard were going to be strongly opposed by the Labour party at every stage. b A . . • Mr. Massey: That is a threat. Mr. Parry:' This is only preliminary sparring. Mr. Massey: I am not going to put up with that. There is a way out if I am pressed too hard. Mr. McCombs: Then take the way out. Mr. Massey: I won't accept that; I am prepared to take the • way out. A Labour member:. We.want you to take the way out, will you accept what we want? Mr. Massey: Everybody knows . perfectly well I am not one to put up with threats. Mr. Massey: does Mr. Holland know about land tix and the people on the land. The Premier added that a large ■ number of people on the land would not and could not make a profit, and were not in a position to pay their local rates or land tax. At the same time he did not mean to say that the country was not prosperous. The Government was trying to get back to the taxation imposed prior to the war. There was serious depression in Britain. He hoped the present price of produce would continue for many years. but he could not help thinking the time was coming in the next few years when these prices would be lower than to-day. Supposing our exports dropped to 40 millions, which was quite possible, he did not believe the country could carry the load of present taxation. Therefore, while the opportunity offered, he was anxious to give the House a chance to reduce it. "T know I am taking risks," added the Premier, who said additional expenditure this year through reclassification of the Public Service and the scale of increases would be £400,000. Mr. McCombs: That does not alter the basic wage. Mr: Massey retorted that the Government was doing what was right and just to the Public Service. Tlie bill was read'a first time.. .