HARDSHIP CLAUSE.

Press, Volume LXV, Issue 19736, 28 September 1929, Page 15

HARDSHIP CLAUSE.

UNFAIRNESS ALLEGED, j j MR COATES AND THE PRIME j MINISTER. j * ! j [THZ 7SBSB Special ferric* j WELLINGTON, beptfiuber '27, A sharp passage-at-arms between the Prime Minister (Sir Joseph Ward) and the Leader of the Opposition (Mr Coates) took place in the House of Representatives to-day on the efficacy of the hardship clause in the Land and Income Tax Amendment Bill. Mr Coates expressed surprise thai tin: Prime Minister should have suggested in iiis second reading speech that the Bill provided lor cases of hardship. in Mr Coatcs's opinion a hardship clause had been put forward to act a? a ''dummy," and he was ai'i aid both ihe Government and the Labour Party t, ere going to hide behind that. Mr YV. D. I.ysnar (R., Gisborne): It is of no value at all. According to the Prime Minister, the Commissioner of Taxes had stated that those who felt they had a grievance in regard t-o the supertax could petition Parliament, said Mr Coates. On that pciut Mr Coates agreed with the view of Mr Downie Stewart that any refarenoe back to Parliament should be avoided. "So far as the United and Labour Parties are concerned," paid Mt Coates, <; it is no use their trying to shelter behind the hardship clause. It is an injustice, and vou can't get over an injustice by a hardship clause." Mr Coates took the case of a property which came within the provisions of the hardship clause. The individual might have put £4OOO into the purchase of the holding, and thought it was good buying. The supertax, say, amounted to £2OO, which, capitalised at five per cent., amounted to £4OOO. He found he vras unable to pay the tax out of income. He could not obtain an overdraft, and he could not borrow the money. The man might try to sell, but had he anv chance of getting his money back? The impost was placed against his liability for all time, and the maa was ruined. Yet the House was asked to lull itself into the belief that the man was not facing a hardship. Was that fair or just? It was not. The hardship clnnse in effect was not worth a snap of the Angers. , The Prime Minister: We will take it otit. Mr Coates: Do you mean' thatf Do you assure— The Prime Mniister: If you are asking for it, and your side is unanimous, we will drop it. Mr Coates (warmly): That is your opinion of fair play! The Prime Minister: I am taking your statement for what it is worth. Mr Coates: You will go so far as ts suggest you are fairf The Prime Minister: Tou are asking us to' take it out. A member (impatiently); Drop the lot. _ Mr ..Coates (to the Prime Minister):; You arc not evea prepared to giye a Commission to see that fair play is. dome? I take it. this- House expects fcom its- Leader, fairness, equity, and"justice- ... The Prime Minister: And you will get it, too. Mr Coates: Show us where! Proceeding, Mr Coates declared that.-the framers of the legislation had not taken into consideration " what the effeet of the proposals would be. He referred to the case of a man whose unimproved value was of £IOO,OOO, and over, who would have to pay, he said, a tax amounting to five per cent, of it, thus absorbing the whole of the annual value. was that fair? Was that right? The land was freehold, but the tax confiscated the investment. Speaking after the -amendment second reading of the Bill, had "been defeated, the Prime Minister said he thought he had the right to claim that he had been unjustly criticised as far as the hardship clause was concerned. Representations had been made to -him, and he had agreed to the insertion of such a clause. If the House did not want the clause, it could be dropped. Mr D. Jones (8., Mid-Canterbury): We want an effective one. Another Reform member: It does not go far enough. The Prime Minister intimated that he would be prepared to consider the question of the hardship clause further in Committee. "One of the things that struck me during the debate was the want of recognition on the part of some members that the Government wants to make this a fair Bill," said SirJoeeph Ward. "We know it does not affect anything like the number .of people some members would "make out, but only 2400 persons. There are 80,000 farmers in this country, and 25jMt pay taxes, some only a fewahiSinga. While there might be differences am matters of policy, I .do not think the Bill warranted the condemnation that has been bestowed on it.'*