TAX PROVISIONS IN BUDGET

Press, Volume LXXXIX, Issue 27147, 17 September 1953, Page 10

TAX PROVISIONS IN BUDGET

PARLIAMENT

Annual Bill Passed By House DEBATE OCCUPIES FIVE HOURS (New Zealand Press Association) WELLINGTON, September 17. The House of Representatives last evening occupied itself for almost five hours with a debate on the Land and Income Tax (Annual) Bill, which fixes the rates of land tax and income tax for the year of assessment beginning April 1 last. Urgency was accorded the passing of the bill, and the House sat till 12128 a.m. today, an amendment moved by the Leader of the Opposition (Mr Nash) being rejected by 42 votes to 24. Moving the second reading, the Associate Minister of Finance (Mr C. M. Bowden) said the rate of land tax remained unchanged, and the income tax rate was unaltered except that provision was made to reduce the surcharge from 5 per cent, to 2| per cent. The bill also provided for a continuation of the £l5 rebate. Other measures mentioned in the Budget—increased personal exemption, increased child and wife exemptions, and increased 'allowances for payments for life insurance and superannuation—would be included in a measure he hoped to introduce next week. The Leader of the Opposition said the bill gave a benefit to those least in need, and none was given to those most in need. He moved the following amendment: “That this bill be read a second time upon a date 21 days from today to enable the Government to reconsider its taxation proposals with a view to giving much-needed relief to the

people in general, and in particular to those who are responsible for the upbringing, maintenance, and education of children, to the lower-income superannuitants, aged and other social security beneficiaries, basic war pensioners, and to workers, who are experiencing difficulties owing to abnormal price increases of food and other

essentials, and who are receiving no benefit under the existing provisions of the bill.” Mr J. Mathison (Opposition, Avon) seconded the amendment.

Mr Nash said that the Budget granted nothing to those on the lower incomes. The family man on £5OO or £BOO got no relief, yet he was required to pay nearly 50 per cent, more today for food. However, those on the higher incomes received special relief. Mr Nash said that 29 individuals shared an income of £1,011,000. One apparently did not pay tax. and the 28 received on the average £24,240 each after paying taxation. The man on £5OO with two children got nothing whatsoever. There were perhaps 200.000 who did not get a fraction of a benefit from the bill before the House. Emergency Aid Referring to tne special assistance fund for beneficiaries, Mr Nash said it was not compensatory nor just .Benefits should be increased by right he said. Mr H. R. Lake (Government Lyttelton) said the Government’s record in its dealings with age beneficiaries had never been equalled. Most of them who were worth their salt made provision for old. age. One of the greatest concessions in the Budget was tne raising of the personal exemption The Leader of the Opposition had said that people on low incomes did not l e* anv relief from taxation, but in two years 120,000 more persons became taxpayers because of the greater prosperity created by the Government, Sfeid Mr Lake. It was completely wrong, be suggested, for Opposition members to talx glibly about great poverty in the country. The Deputy-Leader of the Opposition (Mr C. F. Skinner) said it was typical of Mr Lake to criticise cheaply the lot of the old people. There were age beneficiaries in need today he said. Labour did represent the old people J*™* B& ve them some hope, which the National Government was taking away. Labour, he said, gave them some right to hold up their heads instead of standing in queues asking for charity. No taxation reductions in the Budget had helped the old-age beneficiaries. Mr Skinner suggested that the principle of giving relief to high-country farmers who suffered snow losses should be applied to all other sections of the community, who should now have the right to make provision for loss of income in circumstances beyond their control. An insurance scheme should be established to enable all farmers to participate. The reductions in taxation provided for in the present measure were of ro value to the ordinary family man. said Mr Skinner. Why was the Government reducing the tax? Mr Bowden: It’s a generous Government Mr Skinner: Why isn’t it generous to those who need it? Mr Bowden: This is a family Budget. Mr Skinner: Whose family? It is certainly not that of the workers, surely those in the higher income groups can afford to pay tax rather than those in the lower groups. ‘A percentage reduction helps those on the Higher incomes. Mr Holland’s Speech

The Prime Minister (Mr Holland) laid that the Opposition were obviously against taxation reductions. All the bill did was to reduce the surcharge payable by 550.000 taxpayers from 5 per cent, to 2| per cent. It sought to raise the money with which to pay pensions and some of the money paid in social security benefits. Mr. Nash was playing up to war pensioners and other beneficiaries, implying that he was the only one who cared for these deserving people. If it were not for the large taxpayer, said the Prime Minister, the country could not afford such a large social security bill The large taxpayer was a good asset to the country. A lot had been done by the present Government to restore the moral fibre in man-to-man transactions, said Mr HdUand. Mr Holland went on to say that the special assistance fund was founded

on the Labour Government’s own emergency benefit scheme. It was not right to call claims on the fund “charitable gifts.” Those who needed assistance were entitled to it by right The Prime Minister detailed a number of benefits that had been increased by the Government and said that some had been increased by as much as 122 per cent. Mr A. McLagan (Opposition, Riccarton) said that the conditions of the special assistance fund had been made so strict that applicants objected to such searching inquiries. A high percentage of applications had been refused. In two years 11 per cent of the money voted had been spent and 53 per cent, of the applications had been granted. The Minister of Internal Affairs (Mr W. A. Bodkin) denied that grants from the special assistance fund were charity. He said that during 14 years of Labour administration not one form of pension was granted without a means test He challenged the Opposition to find one case brought to his notice for investigation that had not been dealt with satisfactorily. Miss M. B. Howard (Opposition, Sydenham): I will send you one tomorrow. i Mr Bodkin: Let them (the Opposition members) get in touch with the locial workers throughout New Zealand. They say, and they’ve told me, toe aged people are better cared for than ever before. tion members: Rubbish! Hum**Tl*oßsands” Freed From Tax Mr Bowden, in reply, said that there were thousands of persons relieved of Payment of income tax as a result of the Budget. Mr Nash had been incoriect in saying there was no relief forthose in the £5OO to £6OO income grey. A married man with one child Frying £537 today would not be SJWred to pay tax if 5 per cent, of JEcgne., were paid in life insurSimilarly, a married man with

two children on £606 whould be exempted from income tax. With wages related to the cost of living of 1949 and 1953, the wage earner was better off today, said the Minister. It was true that living costs had increased, but that was a matter for the Arbitration Court. A case was ‘to come before the Court shortly, and the Court would take into account any movement in the cost of living. At this stage Mr Lake sought leave to make a personal explanation about a remark he had made earlier in the debate. Various points of order were raised, and after a discussion lasting for an hour leave was refused by the Opposition. A division on the amendment was called for, which was lost by 42 votes to 24.

The bill was put through toe committee stages without delay, and during the third reading Mr Lake expressed regret for his use earlier in the debate of the words, “worth their salt” in reference to old age pensioners. He said he could see that the words “worth their salt” could be taken to be uncomplimentary to some age beneficiaries. Nothing was further from his mind, and he regretted using them, as they might convey a meaning he had not intended/