Farm Tax As Incentive

Press, Volume CII, Issue 30093, 29 March 1963, Page 13

Farm Tax As Incentive

(N.Z. Press Association) WELLINGTON, March 28. New forms of farm taxation and labour subsidies as incentives for more efficient farming were suggested tonight by the director of the Grasslands Division of the DJSJ.R. (Dr. D. P. Sears). He suggested to the Wellington branch of the Australian and New Zealand Economic Society that farm taxation should be on the. basis of a flat income tax rate plus a stable tax on an area basis at a high rate. “Such would materially help the eager farmer, but would be somewhat saddening to the less eager ones, particularly those on good land who are not producing at a high level,” he said. Capital expenditure deductions should be on a percentage basis or job-cost basis rather than on the present “per farm” basis. “This would encourage the bigger units who, at present, are at a great disadvantage from an improvement point of view.” Farm company taxation should be on an equal basis with private farms and with

Maori incorporated land blocks. Dr. Sears pointed out that in the United States corporate control accounted for 12 per cent, of farms, 40 per cent, of the area, 60 per cent, of the total production and 70 per cent, of the total employed farm labour. “There is plenty of New Zealand money about for equity investment into New Zealand farming, plenty of people who would take on farming under such conditions, and certainly plenty of room' for agricultural expansion of all sorts,” he said.

“But the financial opportunity has to be made at least as attractive and as stable as present alternatives here and abroad.” ■ Dr. Sears also recommended subsidising the farm employment by giving a tax remission for each employee. ‘This is purely a realistic measure to attract good labour to all forms of farm organisations. Surely if it is good enough to start industries at a high price to absorb some of those 18,000 new labour units each year, it is equally good to attract labour to our best industry.”