BUSINESS MAN'S BURDEN

Auckland Star, Volume LXII, Issue 245, 16 October 1931, Page 5

BUSINESS MAN'S BURDEN

PROTEST IN PARLIAMENT. « RURAL-MINDED CABINET." VIEWS OF MR. J. B. DONALD. (By Telegraph.—Parliamentary Reporter.) WELLINGTON, Thursday.

Fears, that the Coalition Cabinet, through its rural-mindedness, was inclined to overlook the plight of the business man in its desire to assist the farmer, and that the method of taxation proposed in the Supplementary Budget was not in the interest of city dwellers, were expressed by prominent members of the Government party during the debate on the Taxation' Bill in the House of Representatives early this morning.

"There are just as many 'business men in New Zealand in .trouble to-day as there are farmers," declared Mr. J. B. Donald, former Postmaster-General, "and unless business improves, quite a large number of business concerns will have to close down in the next twelve months. The farmer is practically relieved of all taxation, and bills are being prepared to cheapen the price of fertilisers and to permit of a reduction, of interest on mortgages. The business man has to pay his income tax in February next on the profits made for the year which ended on March 31 last, whereas if he were allowed to prepare his balance-sheet on the value of things to-day he would make just as bad a showing as the farmer—loss instead of profit. When it comes to payment of income tax, it will be from capital, and some even may not be able to raise the money at all. I hope Cabinet will not lose sight of the plight of the business community, particularly as the city income, tax payer under the proposals will be called upon to pay double, and i in some cases four times the amount of i his present tax."

Mr. Donald considered that a reduction in interest rates would not balance the Budget, but he thought it might have been a good thing to limit the rate of interest that should be charged, because it was the high rates on mortgages being paid by some farmers that had landed them into difficulties. He supported also a reduction in the price of land. The proposals of the Government would tend to stop people from lending money on land.

The former Minister was not in agreement with the proposals regarding taxfree bonds, but he agreed that all debentures should be taxed on the same rate. Minister Astonished. The Minister of Finance, the Hon. Downie Stewart, said he had been astonished to hear the ex-Postmaster-General, say that the Supplementary Budget relieved the farmer of all taxation. Those liable to pay income tax would pay in the same way as others who were liable. The farmer should not pay if he did not have income. Mr. Donald: Neither should the business man. The Minister: And he will not if he does not have income.. I simply won't be able to collect it. "I hope the members of the Cabinet will not distinguish themselves by developing too great an agricultural bias, and I hope farmers will not wish to trample over the dead financial bodies of people in the -cities and towns," said Mr. W. P. Endean (Eeform, Parnell), who declared that nothing had been placed before the House to show, that the burden of taxation taken off the land had been equitably distributed amongst those who had to bear it by way of income tax. He deprecated the attempt to rush legislation through without due inquiry as to its effects.

Also admitting that the primary producer was deserving nf support, Mr. A. Harris (Reform, Waitemata) said he was afraid the rural bias Cabinet had failed to appreciate the difficulties of town dwellers,. Cities had some rights as well as country, but he feared these were being overlooked by the present ruralminded Cabinet.

Standpoint of farmers. "I think Cabiriet looks at the matter from the standpoint of farmers, and altogether ignores the standpoint from which we • town members view the matter," observed Mr. R. A. Wright (Reform, (Wellington Suburbs). "Although it is justifiable to give farmers relief, city people are hard hit by Mr. Stewart's taxation proposals." The Minister of ' Transport, the Rt. Hon. J. G. Coates, assured the House that the legislation he introduced would deal with some of the difficulties mentioned by Mr. Wright. It had been suggested by some speakers that there should be increased taxation on companies, but there was a 30 per cent surtax on the former income tax. Members must "realise that companies must have working capital, and increased taxation would put them in a position which would definitely embarrass them in meeting the requi: ements of their clients. In the committee stage of the bill Mr. Endean strongly urged the Government to explore every avenuj of taxation. It was time something w<*s done to tax the profits of municipal trading departments and power boards. The Prime Minister replied that the difficulty about these bodies was that if there were profits, appearing in the balance-sheets, and the Government was likely to go after them, they would disappear in decreased charges to consumers.