LAND SUPERTAX.

Auckland Star, Volume LXI, Issue 199, 23 August 1930, Page 18

LAND SUPERTAX.

——■ —• 4 TO ENSURE PRODUCTION.

LABOUR MEMBER'S VIEWS.

"START AT TOP AND WORK DOWN."

(By Telegraph.—Parliamentary Reporter.)

WELLINGTON', Friday.

Contending that there should be no taxation distinction between city and country lands, Mr. M. J. Savage. (Auckland West), in the House urged the Government to impose a supertax on estates of £20,000 unimproved value and over, to ensure productive settlement and prevent aggregation.

In the opinion of Mr. Savage tlie weak part of the Government's proposals was the land tax; the removal of the supertax was a step in the wrong direction. It would have been better business had the Government simply amended the Act, after finding that a certain amount of hardship had been created under it. If the percentage had been considered too low, it should have been increased, and the supertax reimposed, but on estates of' £20,000 unimproved value and over. From whatever jingle the question might be regarded, the supertax could very well be levied without doing any injustice to the small man on the land. It often happened that when the interests of the small man were being allegedly conserved the burden on the big man was relieved, and that brought to his mind the removal in 1923 of the requirement to pay income tax on incomes derived from the use of land. "Would you classify the land?" 'inquired Mr. A.' Hamilton (Wallace). Clipping. Wings.

"That is altogether a different problem," replied Mr. Savage. "I would impose, land'tax-on land that was providing the user with such an income as made it possible for him to pay it. There would be one or two reasons for imposing land tax. One. is to clip the wings of the speculator; the other to stop the operations of the aggregator. Classification of the land might bo helpful. In discussing land taxation, however, there is not much difference between the man who owns considerable areas in the city and the man who owns considerable holdings in the country. Both obtain their incomes from the use of land. I cannot separate them. The same applies to the imposition of income tax, Which should be imposed on incomes above a certain standard) whatever the source of the income might be. Exemptions should in each ca6e be! made on the same basis. These two methods seem to be the most scientific of all forms of taxation. I> do not, however, suggest that we should rush into it blindfolded." i

"Start at Top." ■Mr. Savage contended that the whole system \of taxation should be "boiled down." Existing anomalies should be remedied, and the . guiding principle should be in the- first place to impose taxation on the user of the laud in such a way as to make it easy to keep the

land in use to its full productive capacity and difficult to have the land out of use. "We should begin at the top," said the speaker, "that is, with areas of £100,000 unimproved value and upwards. I would keep on reducing the exemption until New Zealand had been settled to its full carrying capacity. I think the Government made the* mistake last year in starting at the other end. My idea is to start with £100,000 and upwards and work down until we get to £20,000. Then if we find New Zealand is still capable of closer settlement the law could be further amended to reduce the amount of the exemption. "No Place for Speculator." "All the time we must direct our attention to see that the land used and worked, and find no place for the speculator and the aggregator. The supertax now being repealed had the redeeming feature that it was aimed at the land aggregator, although in practice it seems to have imposed a certain amount of hardship. 'That to some extent proved that the Government began too low down. Instead of amending the law to correct, that the Government intends to repeal it altogether, and that appears to be going out of the frying pan into the fire." . Mr. Savage said he believed that the imposition of tax upon the incomes derived from the land was a correct principle; and if a man earned £10,000 a year from land that was worth £5000 he still considered' he should pay more than he was asked to pay under the bill. In his opinion the principle to be aimed at in land taxation was to make the land easy of access, capable of being worked and impossible to be held out of use. • ■;