LANG'S MORTGAGE TAX.

Auckland Star, Volume LXIII, Issue 124, 27 May 1932, Page 5

LANG'S MORTGAGE TAX.

QUESTION OF ROYAL ASSENT. REFUSAL WAS UNLIKELY. PETITION FROM BANKERS. The Mortgage Tax Bill, passed by the New South Wales Parliament early on Friday, May 13, would have received the Governor's assent (according to the Sydney "Sun"), but for the sudden dismissal of the Government for another reason. The Act was sent to Government House shortly before noon on Friday for the Governor's assent, and the "Sun'' that afternoon said, "A report that the Governor will not give his assent is officially denied. The usual practice is for the Governor to forward a copy of a bill to the Attorney-General and not sign it until his advice is received."

A petition signed from six merchants and banking institutions was presented to the Governor in the afternoon. It. asked him not to give his assent to the Mortgage Bill, but to send it to the King, for the King's personal assent. The linns concerned in the petition were Dalgety and Co., Ltd., Australian Mercantile, Land and Finance Co., Ltd., New Zealand Loan and Agency Co., Ltd., Australian Estates and Mortgage Co., Ltd., E.S. and A. Bank, Ltd., and the Union Bank.

It was announced later in the afternoon that the petition had been forwarded to the Crown Law Office. "Until a reply is received the Governor will withhold his assent," said the "Sun." "It in stated that there will probably be no further developments until early next week. Unless soma grave reasons are advanced for reserving assent, it is expected that the Crown law officials, to whom the petition will be referred, will advise against its being held up. The Governor will then, it is said, immediately give assent." Mr. Lyons' Counter-Measure.

Meanwhile, in Canberra, Mr. Lyons had introduced legislation to counteract the Mortgage Act. The bill provided that nothing in the nature of a capital levy on property might be made to a greater extent than could have been made on April 30 last, unless and until the Commonwealth Commissioner of Taxation certified in writing that the payment of such an impost would not unduly impair the taxpayer's capacity to pay any Commonwealth taxation to which he was liable.

Power is given to protect insurance companies, banking companies, corporations carrying on the business of trustees or executors other trading or financial corporations, all within the limits of the Commonwealth, or foreign corporations, from any tax or impost in the nature of a capital levy where both Houses of the Commonwealth Parliament declare by resolution that the enforcement of any such tax would prejudice the carrying on of such businesses and would thereby endanger the financial and economic stability of the Commonwealth. In such an event the Parliament, by declaring that a state of emergency has arisen, may empower the Governor-General, by proclamation, to relieve such persons or corporations of any such tax.

The period of operation of the measure is limited to two years.

Mr. Lyons eaid Mr. Lang's bill was a raid on the savings of the people, not only of New South Wales, but of other parts of Australia. It aimed at the destruction of financial and social institutions and of the savings of the thrifty. Facts About Mortgages.

Mr. Lyons quoted the following facts: There are in New South Wales 900,000 life insurance policy holders, and in the whole of Australia 2,500,000. The amount for which their lives are insured is £140,000,000 in New South Wales and £400,000,000 in Australia. These amounts are built up by premiums collected year by year and by the investment of these premiums in securities and in mortgage loans. Four-sevenths of the money lent in mortgages on land has been laid out in New South Wales, although only onethird of the policy holders are in that State.

"Any step that jeopardises or destroys the security of that investment would thus eat up the savings of the people in all States," pointed out Mr. Lyons.

He went on to. state that half of those who had borrowed money on land mortgages from life insurance corporations were residents of New South Wales, namely, 6000 out of 12,000. The position with regard to trustee companies was similar. The average sum lent on mortgage from trust estates by the trustee companies was about £700, yielding an average income to each beneficiary of from £40 to £50 annually. "Strong Words." Warning the House of the effect if the Lang measure was put into operation, Mr. Lyons said: "Everywhere securities will be forced on to the market to obtain cash to pay the demand. Securities of all kinds will be forced down in value. Thus robbery will be inflicted on the holders and ruin will follow.

"The effect of this legislation is confiscation of the savings of people in every State. The dishonesty of one Government is intended to rob all the people of the Commonwealth. Mr. James (State Labour, N.S.W.): Those are strong words.

Mr. Lyons: Not too strong to de scribe the'action. (Cheers.)