FINANCE BILL.

Press, Volume LXVI, Issue 20010, 19 August 1930, Page 11

FINANCE BILL.

SECOND READING DEBATE. TAXATION ON MOTORISTS. (abridged fhisb asbociatiom msport.) WELLINGTON, August 18. In moving the second reading of the Finance Bill in the House of Representatives to-day, the Prime Minister, the Hon. G. W. Forbes, said he thought members would realise that taxation had been adjusted as fairly and equitably as possible. After explaining the Bill on tho lines of the description given on its introduction, the Prime Minister said it was just as well members should be reminded that the recent drop in totalisator returns was in no way duo to the increased tax which had not yet been applied. Ho had been informed by a deputation from Racing Clubs that an increase in the totalisator tax would result in reduced investments, but it could not be claimed that the present drop was due to that reason. The amusement tax was anotjier quarter in which he thought the Government was justified in the present circumstances to look for revenue. In conclusion, Mr Forbes said the Bill was estimated to produce something like £447,000, made up as follows: £ Stamp duties .. .. 41,000 Bank note duties .. 50,000 Totalisator duties .. 100,000 Death duties and gift duties .. ... 45,000 Amusement tax .. 70,000 Film hire tax .. .. 50,000 Sharebrokcrs' fee tax .. 1,000 Land Assurance Fund .. 60,000 Interest on Reparations .. 30,000 Indiscriminate Taxation. Tho Leader of the Opposition, the Rt. Hon. J. G. Coates, said the cry, "We must balance ur Budget," had gone far arid wide. It was to be achieved at all costs. Tho Reform Party was opposed to tho Finance Bill because it imposed taxation indiscriminately. It was imposed irrespective of who was taxed or how ho was taxed, and reasons for the various forms had not been given. The Government had simply stated it was going to impose taxation. It had failed to cut down its expenditure, and had instead pisi forward proposals which ho considered were purely the iroduction of the Treasury. Mr Coates added some Of tho proposals had previously been submitted to him, but they had then been rejected, as the House should reject them to-day. The Bill proposed to tax undertakings, while no one knew what would be the effect of such taxation. With regard to charging a conveyance fee on Australian shares, Mr Coates said it was a bad principle, in that it offered scope for both double taxation and evasion. For instance, if shares were purchased through a sharebroker in an Australian company it would be possible for the purchaser to inform the sharebroker that he would post the shares to Australia and have them registered there. That gave an opportunity for evasion. On the other hand, if tho. duty were paid in New Zealand it would amount to double taxation, because duty would have already been paid in Australia. Briefly referring to the increased totalisator tax, Mr Coates contended it would force more money into tho hands of the bookmakers. Tho Deputy-Leader of the Labour Party, Mr M. J. Savage, said his greatest regret was that the Government had not taken the gloves altogether and imposed taxation in such a way as to strike those best able to bear it. All parties favoured this principle when speaking on tho hustings, but it was hard to get Ministers to put it into effect. Indirect taxation was the easiest to impose, and for that reason it was chosen instead of a direct tax on big incomes. Indirect taxation was usually passed on until it reached those people who were unable to resist it. Bank Notes. Mr Savage said he would have preferred a straight-out tax on the incomes of banks rather than a tax on bank notes, which would eventually result in that particular ~hase of the banks' operations beiitg brought somewhat into disuse. Mr D. Jones (R., Mid.-Canterbury) insisted that an increase in the note issue tax was one that required the fullest investigation. Other Governments had considered similar proposals, but had rejected them. The " banks would not pay tho tax; it would bo passed on to their clients. He believed the Government would be making a serious mistake if it put the tax through, and ho suggested that the proposal should first be investigated by the Public Accounts Committee. Earthquake Damage. Mr D. G. Sullivan (Lab., Avon) said he thought the Leader of the Opposition should have indicated what alternative his Party was prepared to accept in preference to the Government's taxation proposals. If, for instance, he had said he was prepared to advance a proposal to increase the tax on the higher grades- of incomes he might have found some support among members of the Labour Party. Mr Sullivan said he thought it was unjust to ask the South Island Highways Fund to bear the whole cost of restoring the Main Highways on tho West Coast. He considered in the case of an act of God, such as an earthquake, it was unfair to ask one section to meet the cost of repairing the damage caused by what was a national disaster. He also contended that the cities' share of the petrol tax should remain at eight per cent.-He knew it was argued that 5} per cent, of the new taxation would be as much as eight per cent, of the old amount, but on the other hand, it bad to be recognised that city motorists wo.uld be paying more taxation. In conclusion, ho said he thought the time would come when it would be necessary for Parliament to abolish the Highways Board and the Highways Fund. That was the only solution he could conceive for putting an end to the arguments concerning what was a fair charge against one fund or another. Mr A. Hamilton (R., Wallace) de- i scribed the Finance Bill as a Treasury measure, adding "All roads lead to the Consolidated Fund." The Minister for Lands had stated that th» Highways Board had become extravagant as a result of the amount of money at its disposal. If the Government had brought down a measure to extend the scope of the Highways Board's activities, and place on it additional responsibilities that would ease the burden on ratepayers, it might have found the Reform Party supporting the proposal. The Minister for Lands had accused the Reform Party of having' been responsible for depriving the outlying districts of revenue from one penny per gallon of the petrol tax, but it had to be admitted that the Consolidated Fund was taking the revenue from twopence per gallon from motorists and ratepayers. The State was shedding its responsibilities in relation to the upkeep of Crown roads. J

Injustice to Motorists. Mr W. Nash (Lab., Hutt) said he did not think the Government's petrol tax proposals were fair to motorists. It was not fair to tax ohe section of the community for tho advantage of the whole community, and unless the Government allotted all the money derived from the petrol tax for roading it was doing an injustice to motorists. He suggested that a tax on crude oil would have been preferable to an additional tax on petrol. It would not hurt the oil companies to have to pay more on this commodity. Mr W. J. Poison (Ind., Stratford) said there had undoubtedly been an agreement with regard to the petrol tax. It took two parties to make an agreement, and it should also take two parties to break it. If one party broke an agreement without the of the other it amounted to repudiation. It was puzzling to him that the Government should apply one principle to roads and another to railways. It was prepared to meet railway losses out of the Consolidated Fund, so why should it not be prepared to contribute towards the cost of constructing roads in the same way. Both were factors in development. Departure from Principle. Mr A. E. Ansell (8., Chalmers) claimed it could not be gainsaid that the petrol tax was to be used for general purposes. It could no longer be said that this special tax was to be used for a special purpo e, and the Government was therefore departing from an important principle. Mr W. L. Martin (Lab., Raglan) Expressed the opinion that local bodies could have carried out infinitely more valuable work than the Highways Board had achieved with the money available The backblock roads in his electorate had been neglected for the sake of keeping up contributions to the highways. He was, however, disappointed with the Government's proposals in regard to th<* general principle of the petrol tax. Mr C. H. Clinkard (U., Rotorua) said livepence per hundred miles was all that the increased tax would mean to a motorist, and that would not ruin even the poorest farmer. The oil companies would be paying an equal amount. He had no doubt they would continue to absorb the penny taxation. Mr A. Harris (R., Waitemata) contended there was no argument that could justify retrospective legislation asking the motorist to pay interest on a grant that had been made over a period of years. (Left Sitting).