LEGISLATIVE COUNCIL.

Dominion, Volume 1, Issue 18, 16 October 1907, Page 8

LEGISLATIVE COUNCIL.

AA'ND AND. INCOME ASSESSMENT BILL. : <THE ATTORNEY-GENERAL REPLIES TO i ; .[■: • CRITICISM.. Local Bills first occupied; jthe attention of ' tho' CounciT'onits meeting at 2.30 'p.m. yesterday. ■ 'V "■■ '■■:';•'.•■■.■.•■••'' '."'/■■ ''.]'■■ ■.' The Council decided; not' to; insist on ■ its . Bniohdment' to clauso 4-; of tho, : Waipukurau County Bill, the House having disagreed With the amendment../ The ten local Bills which woro passed by the House on tho previous afternoon wero received and road a first timb. Tho Otaki and Porirua Empowering Bill Was iead a third time'and;passed. , : !. ; ; ;i LICHTHOUSES. ;i : : . .■.'••' '. TliA/Att'6rne ; y-General>(Hoh..Dri Findlay), ■jn reply to tho Hon. T. K. Macdonald, said that it. was intended ,in tho Pubh'c Works Estimates to mako provision for a new coastal lighthouse, and also, to /replace tho Tuehino lighthouso near Gisborne,' which was deetroyed by fire. ..'..■'. FIRE'BaiCADES , BILL. i .The Attorney-General moved the first reading of tho tfiro. .Brigados , . Bill, vI9C7. This virtually consolidates tho proviGione rf dio I'ire Brigades, Act, 1906, and tho am ••&[&% Bill. which passed its second reading in tho Councilia few days-ago * • : ■Tho first reading was, agreed to, and the Oocond reading was set down for to-morrow .'fl'hursday)/ ■ :,;' . JUDICIARY BILL. The motion for the second reading of tho judiciary Bill (Hon. Dr. Findlay) was postponed* for a week, so as to allow tho Cou:.cil to consider the opinions expired (by tho Judges aud the Law Societies. ' SUPREME COURT PRACTICE BILL.

Tho tiupremo Court Practice and Procedure Acts Amendment Bill (Hoi. Dr. Findlay) was committed. Technical amendments znado by. the Joint Statutes Eovision Committeo' were agreed to, and tho Bill was eeported. - ,■ • , BILLS OF EXCHANGE BILL, DIFFICULTIES ABOUT CHEQUES. The Bills of Exchanpjo Act Amendment Bill (Hon. Dr. Findlay) was committed. Tho Hon. J. E. Jenkinson, suggested that daaso 3, dealing -with fraudulent alterations of cheques, otc., offered a temptation to that kind of fraud. The cashing of cheques at other-places than "banks sKonld'be deterred a saf"" ' n

Tho Attorney-Goneral objocte'd that great inconronienco would be caused by hindering people from getting cheques cashod ontsido a bank. In regard to «ho question of fraud, a Court would have to dbci'de whether the cheque was negligently drawn and whether it was dealt with in good faith. Tho Bill had been carefully scrntinisod by tho Joint Statutes Revision Conrmittep, and ho asked his friend to realise thai it would merely malco the law what it had boon all along supposed to bo.

The Hon. A. Baldoy agreed with the clauso. People who drow thoir cheques so carelessly that fraudulent alterations,could to mado deserved to. suffer. . ".;■'-

Tho Hon. W. W. M'Cardlo supported the clause. In the interests of settlors in outlying districts, ho combatted the idea of having cheques payable only at a bank. ' The Hon. T. K. Macdonald said Mr. Jenkinson's proposal would disorganise our whole commercial system. THE GRADUATED TAX. 1 ' TDIE. ■ ' INTERESTING SPEECH BY . ; DR. MNDLAY. ■ Tho debate on tho second reading of tho Land and .Income Assossment Bill was re'The'Hon. T. K. Macdonald said that ho feared the Aot would stand in th 6 way of men with small capital, who wished to acquire freehold land. If 'existing graduated land tax had been properly unforced, with adequate valuations, ;thore would have been no need for an increase of tho tax. Government Valuations too Low. ' Large estates were always under-valued. Thero was 'not one in tho Dominion that' w,ould not sell for 25 or 50 .per cent, more than the figure at which it stood on the books .of the Valuation Department. The Government valuation ought to come within 15 per cent.• of the truo selling value. He gave an instance of a property, valued by the Government at £1600, and sold by auction very soon after at £2600. In tho case of properties acquired by the Government,' the books would show a great disparity between tho valuation of the property for taxation, and the paid by the Government. Ho was glad to see tho clauso in the Land Bill providing for the acquirement of estates by the Government at 10 par cent, over the .Government valuation. That was an, old provision which ought never to havo been discardod. • By doing bo the country had lost several million pounds. Thoro had also been a bad habit of utilising the Government valuation, in probate matters, but official vigilance had lately ca-used a considerable saving in this direction. The valuors wero not sufficiently looked after by superior authority, and were not. adequately paid in respect to the responsibilities of thoir position. Uoso who showod.special vigilance woro not rewarded by increased pay. ;. .. - . : " -j : > ~-.,"■ The Hon. J. Anstey: "Thoy havo far too much to'do." ■ ..: -.•.."■• • .■.-, . .■■■'■ ■■ <■

: The Hon. T. K. Macdonald, continuing, said the valuations were far -too low. ,He could go through the city of Wellington and raise the values; by_ a.,quarter, of a million,' or perhaps -half a million. .■'.;• . , , The Hon. G.. Jones:.!" The values would bo-fictitious." \ . ,

"A Most Unjust Proposal." ' The Hon. T. K. Macdonald, proceeding, Baid he hoped the Council would be able to amend Clauso 16, which was retrospective, and 'was one of the most unjust proposals ever made in tho Legislature of this country. If ; tne people'understood, it, they wpuld ; rise up'ancl demand'its repeal. ."''"' . '■"•'. ,'' .'.The'-Hon.'-; J. B.Callan.hoped the.Govern-' merit would not be influenced; by the , views of the ■H6n'i'T.-K.Macdonald : on-tho departmental valuations. Ho preferred tho Land Bill of last year as a moans of inducing subdivision of large estates. Thero was a finality and certainty about its provisions, which were lacking in the present measure. The Bill was meant, not as a taxing Bill, but. as a : means of satisfying 'the land hunger of- thepeople. : It'-was strange: that this hunger should be so teen in this country, while elsewhere there was so strong a trend of population towards , tho; cities. This desire for.a; ruraL'life should-be satisfied- as far as possible. ,Ho sympathised with Mr. Anstey. in, wondering why i tho graduation of the .tax should stop at £200,000 unimproved value.- ' The' AttorneyrGeneral: ' ' Consider • what they'will have to pay." ; '■ . '.■■•.,■_''-.'.- ' In iegard to the extended powers v> be given -to the Commissioner of Taxes (continued the Hon. Mr. ;Callan), that officer already' posscssod pdwers of scarcely less importance, and, at any rate, he was not to be given power to increase taxation. Ho sincerely hoped tho Bill would be a success, and. would holp to settle the people on tho land. : Town and Country. ; l , \ The Hon: T. Kelly said-that, although the, Council coiild not amend the Bill, it being a money Bill,.the Government could bring down amendments by Governor's, message .is a result of the discussion in the Council. The principlo of the graduated tax, once introduced, would not bo'confined to land in the Dr. Findlay: "The Bill applies equally to town and country lands." The Hon. T.-Kelly went on to say that tho same kind of taxation would soon bo applied to incomes. ~ ..,,,, ■ The Hon. G. Jones: "Quite Tight.' The principle of the graduated land tax had been introduced (Mr. -Kelly further,said) in 1891, and had apparently been approved by a majority of tho pooplo. It was too late now to try to , reverse, that decision, and allthat could be done was to make the best of the position. > '■■■ .... ' The Hon. C. M. Lul« said it was necessary to use somo further means of making the large holdings of. the colony available for closer settlement.' Ho know of men going air over the Dominion from ballot to ballot without /securing a section of land. • The Valuation Question. ; , Hβ disagreed with tho views of the Hon. Mr. Macdonald in regard to Goyornmont valuations. The prices at wliich much of tho land in the Dominion had'boon sold had come very near a point that would make it impossible to work the land at a" profit. Ho thought tho'valuers dosorved credit for securing the taxation of tho land at its proper valrie. Thero was a time when it was understood that tho Government valuation should lie about twenty per. cent, below the selling value, but this was altered when a new spirit was infused into tho Department by tho late Mr. Seddon. He was quite pTO■pared for tho gradnntcd taxation of other forms of woalth, so that every body should pay according to ability. Ho was not at all alarmed about tho powers to bo given to the Commissioner of Taxes.

The Attorney-Ceneral's Reply. Tho Hon. Dr. Findlay, in replying, reminded Councillors that tho differentiation between town and country in tho Bill consisted solely in not imposing tho additional twenty-live per' cent, of graduated taxation on business premises. Ho would not enter into tho vaguo and doiibtful sphere of discussion on Socialism, but he would point out that there was something that would always divide land from all forma of wealth produced by labour of tho hand, or the head. Xhoso who earned wealth by such labour were in a very different position from tho man who stood or sat by whilo tho land he possessed increased in valuo through tho olfoife of his follows. The Retrospective Clause. In regard to section 16, Mr. Macdoia'l had allowed himself to go a littlo too far. There wore cases of land that had been tho subject of a petitions salo, in which nothing had boon received from the purchaser, and the real effect was that tho land romained in tho possession of the original owner. Tho Government had hml boforo it instance after instance of this sort of thing, and tho law draftsmon had had to dense means to check it as far as possihlo. Under tho law as it now stood a man could give a salo noto acknowledging the receipt of £1 as a deposit, and-that would bo accepted as proof of a

nalo. This, of oourso, mado ovasion very easy. It was, therefore, necessary to insist that thoro'. must be Bomo substantial payment, and tho amount was set clown in tho clause at fifteen per cent, of tho purchase price. This • did not apply to any ■ property of. a less unimproved valuo ■ than £40,000, and any owner knew that ho could escapo tho application of the clauso by reducing liis holding.' In practico, fifteen por cent, was not a largo deposit. It was probably less than was paid in ordinary transactions. A great many fictitious sales of land had been mado to cvado tho existing tax, and largely through this means the country had lost £19,000 of rovomio in two years. Were they to go on losing that' £19,000 ovory two yo :n by an ovasion as clear and gross as was over accomplished? If,, five years ago, a largo owner sold his land and had not received fifteen per cent, of the purchase money, there .was prima facio evidence of an ovasion of the existing law, tho owner beii -, " thereby saved tho payment of tho present Those, sales arranged in tho past deserved to be hit ovon moro sovoroly than those of the future.

Powers of the Commissioner. Tho Government had perhaps gono too far in allowing tho Commissioner of Taxes to decide that a salo was genuine, even when 15 per oent. of tho purchase money had not been paid. It was a concession to those who objected to Clauso 16. It was said, "Lot there bo an appeal from tho Commissioner to a Judgo of tho Supreme Court." Ho took leavo to think that that suggestion was mado with a view to fostering ovasion. Thore would bo cases in which a Judgo, approaching the matter from the legal point of viow, would say thoro had been no evasion, whereas a man, like tho Commissioner, untrammelled by judicial rules, would know that, though all the forms might havo been gone through, yet thoro was ovasion behind them all. If there was an appeal to a Judgo, thoso who had the moans of employing the best legal talent would still be able to ovado tho taxation duo from . them. When ho spoko of £19,000 that had been lost to the revonuo in two years by evasion, ho could not forget that thoro must bo many cases that wero not known, and he could not conjecture what tho amount of the loss really was. Power.as great as that to be given to tho Commissioner had in tho past been given to rabbit inspectors, and with ; excellent results. Limitation and Taxation. To those who preferred the limitation proposals of last year's Land Bill, rathor than the increased graduated tax, he would say that nobotiy who was not familiar with tho law on real proporty could havo any' conception of tho difficulties that wore inseparable from legislation liko that proposed last year. Ho had gono through the Bill of 1906 with the law draftsman trying to make it thoroughly workablo, and tho difficulties and complications which they encountered wero enormous. Ho did not think ho was betraying any confidence in saying this. These difficulties constituted .one reason why that measure was not proceeded with. The present Bill virtually embodied tho principlo that a man should not hold moro than £40,000 worth of land, unimproved value, and if tho means proposed wore not adequato to tho end in'view, ho would bo ready, after two or three years' trial of tho proposed taxation, to support a proposal to increaso it. In tho meantime, howovcr, it was . bettor to' bo modorato, and not do anything that might create in the minds of tho English investors, to whom wo looked for capital to develop the country, the idea , that New Zealand had cmbarked upon, a course of confiscation by means of taxation. Ho asked the Council to pause before violating an established constitutional principle by "attempting'to altor a Bill of this character. Ho-had a statement of English practico on this point, which ho would lay hoforo the Speaker, if necessary. Such verbal amendments as had been suggested might be made by Governor's message. Ho did not think that any of those who had ,takenipart.in this interesting,discussion had wasted tho timo of tho Council.

An Explanation, •'-. ' The Hon. H. Scotland rose tomako a personalexplanation..concerning his sp.eech in this debate? He had never intonded to say that the Socialists' hated Now Zealand. But the Hon. Mr. Paul haa interjected, "They lovo their conntry." " What I intended to say," continued the Hon. Mr. Scotland, " was that thoy hated tho country as opposed to tho town I—a1—a very diHorent thing. , I was also misreported, and I am glad to havo this opportunity of putting "myself right with the Council, aud letting them know what I meant to say,. and what I actually did say." Tho second reading of tho Bill was agreed to on the voices, and tho Council roso at '4:55 p.m.'