TAXATION OF FARMERS

Press, Volume LXXXIX, Issue 27091, 14 July 1953, Page 11

TAXATION OF FARMERS

VIEWS OF MR H. C. URLWIN

ALLOWANCES FOR RURAL WORKERS’ HOUSES

Some comments on taxation provisions are made in a statement by Mr H. C. Urlwin to “The Press.” Mr Urlwin, who is president of the Canterbury Manufacturers’ Association, says in his statement that he speaks

“as a farmer and a member of Federated Farmers, not as a manufacturer.” “There has been a lot in the news lately regarding farmers’ taxation,” says Mr- Urlwin in his statement. “Whether the present method of valuing stock for taxation purposes is the best possible I do not know, but it is certain that it was devised to assist farmers, and if any better method is available I feel certain that any New Zealand Government would be prepared to adopt it. “It would seem to be true, however, that in some directions the farmer and farm worker are far better treated than other members of the community in so far as taxation is concerned. “Take the matter of house rents. The Agricultural Workers’ Act, with rates of wages brought up to September 1, 1952, gives the wages of an agricultural worker as £8 3s 6d a week if he is supplied with a house and £8 10s a week if he is nox. This is a difference of 6s 6d a week only. The act says that no other payment must be levied in regard to the house occupied. Position of Urban Worker “When deducting Social Security charge the invitation is there (and presumably taken) to deduct Social Security on 6s 6d only so far as the house is concerned, irrespective of the actual rental value of the house to the farm worker, while any urban worker under similar circumstances pays Social Security on the full rental value of his home, more especially as the vast majority are paying rent (or payments equivalent to rent) with money that has paid Social Security charge. “The farm worker may or may not have a good house, but if the assessment of 6s 6d as laid down and apparently accepted by the Inland Revenue Department as correct, is in fact correct, then there must be a lot of folk living in pig-sties that are no credit to the farmer; but I do not believe it. The farmer also gets away with it. No tax on rental charge is P ai d by him to the Social Security Fund, and the rates on his house are deductible from his income for tax purposes.

“It must be presumed that in paying income tax the farm worker also has his house assessed at 6s 6d a week and the farmer at nothing at all. The loss on these two taxes — Social Security and income tax —must amount to many tens of thousands of pounds.

“Wouldn’t the urban taxpayer love to have the rates payable on his home deducted from his income for tax purposes. To be able to paint it at the Government’s expense and to let the hired man—whose wages are also deductible—mow the lawns and look after the flower and vegetable garden. It is true, of course, that a small amount is charged to the farmer as maintenance on his home; but this is very small indeed and does not cover the depreciation, which is deductible. “Quite apart from the fact that the Treasury is losing an enormous amount of revenue, and the urban worker is being unfairly treated in comparison with the farm worker, I think that the whole set-up is entirely wrong from the long-term point of view of both the farmer and the farm worker.

If an employer in the towns wishes to build homes for his workers, he can, in terms of the Fair Rents Act, obtain an equitable return on his capital. But what can a farmer do for his workers on 6s 6d a week?

, Higher Wages Urged The worker in the country should be given money wages equal to an equivalent job in town. In most cases it would mean a rise of not more than 20s a week. Award wages at present for farm workers, under the agricultural Workers’ Act, are £8 3s 6d a week, and for first-class process workers in industry £9 Is 8d a week. If the farm worker’s wage was made comparable he could then be charged a reasonable rent, according to the house he was occupying. “This could be done either by an assessment under the Fair Rents Act, or perhaps more easily, when Government valuers value farms, the value of the houses could be shown separately and the farmer given the right to. use a percentage of it, plus anytning spent on improvements till next valuation, as a rental charge. “That amount so fixed as the ‘fair r ? n ‘ : would then have Social Security charged on it and income tax charged on it. What applied for the farm worker s home would of course also ipply for the farmer’s home—but perhaps that is the rub.

However, while at the present time, other than obtaining and keeping a worker, there is no incentive cor a farmer to improve his worker’s K«+u m ll! oda J ion ’ 1 think tha t finally i the farmer and farm worker only one S ain ing n 0 benefit would be the farmer, who expects his worker’s family to live in a house worth 6s 6d a week. The farm worker would be better off as he would get a better home and a age to for it. /i? e farmer would be better off in that he would have happier workers at no extra cost as both the wages and maintenance on the worker’s pv^> e write-off for tax purposes, comp extra 4 Wage did not all come back as rent. f " mer does not like this farfn e r}i On ’ P leas .® do not blame manufacturers. I write as a farmer and a member of Federated Farmers, not as a manufacturer.”