ADJUSTMENT BILL.

Press, Volume LXVIII, Issue 20543, 11 May 1932, Page 12

ADJUSTMENT BILL.

FURTHER AMENDMENTS.

HOSPITAL BOARD SUBSIDIES EXEMPTED.

[Fbom Oub Pabliamentaby Rbfobtbb.] WELLINGTON, May 10. Thirteen amendments to the National Expenditure Adjustment Bill were introduced in the House of Representatives this afternoon, by Governor-Gen-eral's Message. It was explained that the amendments involved no variation of principle, but were mainly designed to remove anomalies and to meet cases of unintentional hardship. The provision relating to Hospital Board subsidies has been deleted from the clause, which reduced all State grants to educational and other Societies by 10 per cent. The reason for the deletion of the reference to Hospital Boards is that the amount of subsidy from the Consolidated Fund, in aid of such Boards, is governed automatically by their expenditure. The required saving of public moneys will, therefore, be effected not directly by a statutory reduction in the rates of subsidy (which is impracticable), but by a reduction through the agency of the Department of Health, in the estimates of expenditure of the Boards themselves. Pensions. In redemption of the Government's promise, existing pensions arc protected by the insertion of a new clause providing that the rate of pension pay-" able to any person who is in receipt of a pension on the passing of the Bill shall not be reduced by more than 10 per cent., while the current pension certificate remains in force. Interest Reductions. The majority of the amendments affect the section in the Bill dealing with interest reductions. t Interest payable on 'mortgage debentures secured on mortgages that are themselves exempt from the operation of the Bill is exempted from the reduction. This will have the effect of exempting mortgage debentures held by the Sural Intermediate Credit Board. In the case of company debentures issued free of income tax, the rate of interest may ,be reduced below 5 per cent., but now below 4> per cent. This is designed to prevent an unfair advantage being received by holders of debentures issued free of income tax over holders of similar debentures issued subject to income- tax. Where a company issued debentures "free of income tax" the liability for the tax is on the company instead of on the debenture holder. A new clause is inserted to protect ground rents from being reduced below 5 per cent, per annum on the unimproved value of the land, in respect of which they are charged. The unimproved value is to be taken as that appearing in the district valuation roll, in force on April Ist, 1932. Unless the parties concerned agree to accept-the decision of the Court, applications,: for relief from the section of effecting, interest reductions, and for the determination of the hypothetical rate of interest or rent that would have been payable under any contract if it had been entered into on Ja.nuary Ist, 1930, are to be referred to the Adjustment Commission, set up .under the Mortgagors Relief Acts., The power of the Supreme Court to modify on the grounds of hardship the terms of any deed, will, or settlement, providing for the payment of annuities or other periodical payments are extended. This will enable the Court to deal on the same grounds with fixed payments provided fox, in deeds of separation between husband and wife, and will also permit of the modification of annuities in cases where they are payable from a source other than rent or interest. I Stamp Duties. Owing to the delay in the passing of the Bill, an amendment to 'the stamp duties 'section is made, making the duty applicable to interest coupons or warrants presented for payment on or ajfter May 14th, 1932. The Bill, as previously passed, allowed ordinary taxpayers to deduct from their assessable income for income tax purposes the amount of stamp duty payable under Section 4, but it did not meet the case of banking companies, whose taxable income was assessed in a special manner. Under- the Land and Income Tax law an amendment is made for the, purpose of allowing such companies the right that other taxpayers possess of excludj,ing from their taxable income" the amount of interest • which they -'-Jose through stamp duty on Government and local bodies securities. : - i A refund is ; authorised, to the State Advances Office and Rural Intermediate Credit Board, of the net stamp duty charged on - their securities under Pdrt 4 of the Bill. . / ; ;

Mr J. McCombs (Lab..: Lytteltbhj expressed disappointment ait the pbsij tion in regard to pensions. He saic it was apparent that the Government had not repented of the doable rej duction made by the Bill, but ,hac ■simply decided to impose it gradually because once the current certificate! had expired pensioners would- becom* liable to the reduction as originally imposed. Mr H. E. Holland. Leader of'th« Opposition, said the House was placec in an awkward position by the intro duction of amendments at the lasl moment, and suggested that ther< should be an adjournment until to morrow to enable members to examim the effect of the changes proposed. Prime Minister's Assurance. Mr Forbes said he could give ai assurance that there were no 4e* principles involved* in the amendments They were merely: to remedy anomalie: and meet cases of hardship. Mr McCombs said there was a radi cal alteration in connexion with tin amendment, which sought to protec ground rentals from being reduced be low five per cent, of the unimprovec value. That was an alteration in tl* direction of protecting landlords an< might possibly nullifv all the' relie granted those renting land. The Hon. W. Downie Stewart sai' the main object of this amendment wa to protect local bodies which had fixe( low ground rentals to encourage build ing, and which "would be placed in > very unfair position unless an altera tion was made. Answering further . questions, M Forbes said it was quite clear th< clause would not apply to countr; ! lands, because it set out that grouw rent was rent reserved when laftd wa leased to a person on tha he erected certain buildings on it. The amendments were adopted.. '