PARLIAMENT

Dominion, Volume 10, Issue 3158, 9 August 1917, Page 7

PARLIAMENT

YESTERDAY'S SITTING THE FINANCIAL DEBATE . . A PRICE TAX SUGGESTED TO CATCH EXCESS PROFITS .The . Legislative Council met at 2.30 A p.m. -..--..--• LOAN ACT AMENDMENT. . After a brief adjournment, an amendment to the'AVaf Purposes Loan Act was -received-from- the House of.. Bepresenta-- . The Hon.'O. SAMUEL said that the . amendment was designed, to extend the . jotters of . the; Minister of. Finance in worinection'-with'the issue of war certififcateSfv, The. Minister ..was; given, discre'.tionary power to issue certificates for small splris at 5 per cent, for periods of . '.five.'years, or. over.; .He was sorry more ■ tinie was riot availably for consideration of. the proposal,' but tho.uia.ttei' was one «f urgency. ; ' ' The. Hon. J. BARR. said he hoped the- . Government was not going to mako a practice during the present session,'.as in the last session," of ■ rushing legislar tion through the Council without allowing 'time for debate.. He would protest" - (gainst.'.suck, procedure in. the future. The Hon. SIB WILLIAM HALLiTQNES said' he realised the matter had •'to be treated as one of urgency, but he hoped similarly ' important proposals would 'iiot require' to be' discussed 'hurriedly in 'tliß. future. "•■,■■■' ,- The .'amendment was adopted. ' . ''■■'Hie.. Council, adjourned at "3.10 "until . : Wednesday next. .

THE HOUSE ' -;, ■'■'. Tlie House of Representatives met at .5.30- p.uv .••■■•■■•..•■.■■ - :. '- '.THE'WAR-'LOAN BILL. Tho War Burposes Loan Bill was returned to the' House by the Governortieneral with . certain iproposed amend- ■■; SIR : JOSEPH WABD (Minister., of finance) said that tho amendments were to a largo "extent formal, to enable-the. Post Office' to take larger sums from small investors- and to enable the time of such investments to be extended beyond the period of five years. The extended period would be ten years. In.all probability the sum accepted for investment. in the Post Office would be increased to ,£SOO or ,£IOOO. His present inclination was to fix the limit at .£IOOO. ; ' . The amendments were agreed to 'and .added to'the Bill. ■

FINANCIAL DEBATE BUDGET UNDER CRITICISM ITS GOOD POINTS AND BAD. Mr. J. A. ANBTEY (Waitaii) resumed the. debate on the FinaL-clal Statement. He said lie wished to compliment the Uovernmcnt on the boldness of the proposals contained in the Budget. He believed that the people expected boldness and would'welcome it. A good deal was said about the conscription of wealth, and 'it was because the proposals went some way towards this that he approved, of them. .He "believed that the conscription of wealth after the' method proposed by the member for Tima.ru would -meauVruin to the country, and would notbe accepted by, the House. On the other hand,, it was possible to conscript the annual'return from wealth, and this the Government had proposed to do.' Hβ was very pleased indeed to note that the amount to he given to old-age pensioners ivas to be increased.-and he was sure that every member of the House would favour it. He was glad to notice also that the-excess profits tax was to be. repealed. Itiwas a most jnequitable lax. He knew a'man who was absolutely bankrupt who ■liafl lieen called upon to. pay excess pro.fits 'ins, and while .'this was' eo, others who made much more money paid' nothing. He was sorry, to see that. " the Government proposed to continue the war bonus, especially as the tains or other gratuities had been , given to highealftried officers. He hoped that this" year the. Government would, give flie bonus only to officers in receipt of comparatively low salaries. He saw that: there was an increase in the education vote. .'He was-of opinion that we Tiacl been 'increasing our expenditure on education without getting value, and he thought it'was due to the vicious. system of centralisation which had been established in later years. The statement was made that 'the fire losses last year were only _28 per cent, of the premiums paid. Tins shows what possibilities there were in this fire insurance business if the Government took a monopoly'of it. The premiums could be cut down by ">0 per cent.

/..'• The Direct Taxes.' Hβ was sorry the Government had gone on■ to perpetuate the fallacy.of mixing up graduated land tax with ordinary land tax. These two taxes should be kept distinct, as. their objects were entirely different. He condemned ' tlie, graduated land tax because he did'not think it would be effective to compel subdivision of'land. In the higher ratios it was not yet.heavy enough, ana would have no

bursting-up effect. It was for this reason that ho condemned the continuation of thb two taxes. He was of opinion that tho land tax should be a flat lax imposed on all land irrespective of whether it was mortgaged or not. For the graduated tax there should bo a exemption of, say, 4:5000, and it should rise on a- steep scale, crossing the line of confiscation at some point ■■ less than XIOO.OOO. ■ But a bursting-up tax should not bo imposed without notice. With regard to income tab, he could see no" reason why the graduation should cease i at 7s. 6d. in the pound, but he did not think it was fair that the same rates should apply to companies as to individuals. He would be to favour of reduction ol exemption to a year, for he believed there were many single men m receipt of incomes between £>00 and .£3OO a year who could easily affora to pay taxation. There could be an exemption for tlio wife and for every child. He was afraid that the income tax would not react war profits. In order to tap these •profits at their source it would be necessary to impose a price tax, for all our war profits were due to the increased prices received for our produce. The Government might collect a sum of two,millions in this~ way. He .did not agree that this could be done equitably by the imposition of an export tax., (fflfr e* his reasons for advocating tins method of taxation was that it was difficult it not impossble, to diEcovtr farmers incomes. He condemned the tax on tea, holding thai.it was unwise to impose a tax on an article of daily nee- He would rather see .increases in Ike taxfs on beer .and spirits and ou other useless luxuries. He thought the thus had passed when we could call the motor-car a luxury, ana therefore he did not advocate a higher tax on" motor-cars, but he did think a 'substantial tax should l;o imposed on motor -tvrcs, the; money.io be exptnded on the upkeep of roads. Regarding land settlement he said that some of the more recent purchases of the .Land Purchase Board were inexplicable, unless they were made to relieve the owners of very.bad bargains. If the operations pt this board were not'better regulated, it would not be-possible- to-make a success of the settleiucn; of returned soldiers on land.Discussing the remision of income tax.on interest from the War Loan, he said that in England the same •rule was followed with this exception, that war loan interest was subject to tho super war tax; He would like to see some alternative method such as this tried here.

Taxes Must Be' Adequate. Mr. c<. t. PEARCE (Patea) said that he recognised that this country should be prepared to find any amount of money that was required to treat the soldiers well. Wβ had ' not. provided nearly enough for the soldiers' dependants or for the totally incapacitated soldiers. His. own opinion was that incapacitated men'should receive at. least .C 2, and that 12s Gd. per week should bo allowed tor everr child up to the ago of sixteen years. He would support taxation eutn-.. cienf. to provide for these people. Ho had not much faith in nostrums for keeping down the cost of living. In Australia they Had tried many of them, and the result was that the cost of living was higher there than, here.' He was therefore in favour of an increase in the pensions to old people. He favoured the doubling «f the taxes on foreign motorcars, but not on motor lorries and suou Most of the motor-cars were used for pleasure purposes, liven if tho imposition of the tax kept these American car.? out of the country it woujd be no calamity. It would be better for some people if' they were not able to bnv curs; they would have more money to "invest in War Bonds, which would 'bo more, use to them in the bad -times, after the war. ■ He strongly urged the Minister to impose another 10 per cent, on foreign motor-cars. He was glad to see Hint there wns to be an amusement tax. It was a very good thing that the excess profits tax had been repealed. Some men had"pa'M too much under it, and some loo' little, and but for the tact shown by', the Commissioner of Taxes there would have been more trouble about the collection, of the tax. The beer duty was riot to be increased nearly enough, lhe added increase would mean an addition altogether of 50 per cent, to the old tax imposed on Tjeer thirty-eight years ago. At least il: should be increased to double tho amount put on upwards ,of thirty years ago. Such a rich monopoly could Well afford to' pay it. He approved of all the Customs duty, including tho tax on tea. Drinkers of teer and other beverages were making their sacrifices, and tlie who were tliei chief consumers of tea, should be prepared to make sacrifices also. He believed they were willing, to do it.

Land and Income Levies. He went on'to speak of the graduated land tax. This tax amounted to M 10s. per cent, in the higher graduations. He aid- hot believe in the proposal not (o allow remission of the amount of mortgage in assessing for .graduated tax. It was not right that a hiaii should-have to submit to the levying, of,; this tax on bis debts. It 'should bo • remembered' that the amount of registered-mortgages in A'oit Zealand was .6120,0011,0(10, while tho total'unimproved value of the lamJs oE New Zealand was only Tho income lax on farmers did not .work Mvuilatfiy,- and it fell with *pe-. Bial severity on (lie man who, with his own and his family's labour, for which no allowance couid ba made, contrived to mnice a little income. The specjal war tax was in'cffect another income tax, and he did not see why the two taxes should not bp collected in one siim. The war tax meant double taxation in its present form. ' Tho revenue estimated in the Budget was likely to be exceeded very substantially. The i Minister had underestimated his receipts

ah many points, and even tlien showed n prospective surplus of .£1,250,000, with a surplus of' i'G.OOO.OOO carried forward. The actual surplus for llio current venr probably would lio over Ji2,000.000.-' iTe believed the Government was taking too much money from the taxpayers, and that, the accumulation of huge surplus funds for transfer to London was going to injure the Dominion. It was inot in the interests of the State io put any unnecessary burden on the producers, since the prosperity of the. whole community depended upon the stimulation of production' and the increase of the rural population.

On Safe Lines. The. Hon. D. BUDDO (Kaiapoi) said ho did. not think it was possible to take too much taxation from tho country nt the present time. The Government needed all tho money that it could secure. The Budget was framed on safe lines. It did not leave the beaten tracks, and it. would impose burdens, generally speaking, on the people best able >o bear them. No scheme of taxation would avoid inequalities in special cases. The land tax had at last reached a level that would check aggregation. The Minister of Finance -could assist the farmers very materially by simplifying the taxation forms. Tho. average farmer could not calculate his own lax without the 'assistance of an accountant, and it would not be. difficult for the Treasury officers to devise a simpler system. Canada had set a good example by differentiating between- married men and single men. The single men could afford to pn>yniore taxation than married men with corresponding incomes, and he did not think they would object, to pay. Kir Joseph Ward: What about the spinsters? Mr. Buddo: I think it would be just as well to leave them alone. He disapproved of the tea duty.

Tax Tyres. Mr. Buddo advocated a tax on motorcar tyres.' The money was needed for the repair of roads, which were damaged very seriously by motor traffic. The Government ought to assist farmers'-agencies >by allowing them to arrange with merchants here for the payment of indents in London with the proceeds of the sale of produce. ' This would save very heavy charges for exchange. He urged the Government to make improved provision for returned soldiers. There should be ii very extensive organisation for placing returned men in positions suited to their needs and their capacities. It would not be possible to place all the men in positions equal to those they had laid down when enlisting, shico conditions would not be favourable for employment after the war. The Goverrnment must see,however, that returned soldiers did not walk the streets looking for work or seek charity, when they returned, to their native land. Referring to Defence administration, Mr! Buddo said economies would have been eflected by giving Territorial ,work to officers on the Unattached List, who were willing to work without pay. The men who had worked hard in the volunteer days were willing, to work a Sir James Allen: The Territorial Staff has heaps of work outside the training. There is the Military Service Act. Mr. Buddo suggested that,, the Territorials should not be called upon at all during 1918. The. calline up of the Second "Division men would increase the difficulties of the position very greatly, aud'a. man. who was Dot required in the Expeditionary Eorcen would be better employed fully on the land or elsewhere. ■The young Inen who were taken into lerritorial camps we're removed temporarily from useful employment, and tho' older men could not always carry on the work. The cost of living problem required attention. The military authorities were producing bread for the camps at Old. per loaf, wliile the. ordinary consumer paid up to Is. Mr. Buddo niadn nn appeal for the resumption or race trains. There was no real saving in stopping the trains, since the effect was to involve local bodies in the cost of repairing roads damaged bv motor traffic. It would' be better to take the race-goers' money and save tho roads.

-' " Financial Proposals. Sir. G.' HUNTER (Wnrpawa) said ho hoped the Government would not adopt the suggestion made by tHe member for Kaiapoi that they should tax bachelors. One of tho rudimentary principles ot taxation was that a man should be taxed on what he had, and on this 'principle a 1 man should not be taxed because he had not a wife. (Laughter.) In liis opinion the borrowing and taxation proposals' were sufficiently sensational to be in any one-Budget. He went on to speak of the permission of .the Imnerial Government to reduce the rate of reinforcement. If this permission was oiven voluntarily, he would be glad that the reduction should be made, but it it was as the result of pressure from hero lie'was opposed to it He wasi especial y glad to hear that sonie of the Jlam Body men were to come buck on furlough, and he hoped it would yet be found possibleto- bring all the Main Body men back, lie congratulated, the Government on the *u" 0 surplus, but he suggested that examination V how the surplus was made up showed -that it was not w> f il < ° as it first appeared. Most ot the additional balance to- credit was .the re i of added war taxation. Ho sa.w no iuwn to fear that the Government would not succeed in raising the loan propose. Tlie first twelve millions should bo available in view of the success of the loan ot hi venr H would bo the. Vy of every mmb£ of' Parliament to assist., n he raising of the loan in order to obvmte he necess tv for putting into operation he wmnulsorv proposals. In any case, before fill Minister resorted to compulsion ,e shonKT consider the nation c>f exempting those men who had subscribed largely to patriotic funds.

Other Suggestions. "Reference was made in the Budget to tty draining of swamp lands amincidentally to the drainage of Pouk>w.i Lake. No moro profitable work could be undertaken by 'the Government than this drainage <of swamp laud, and ho iir R ed the Government to nross ahead with bringing this fertile land into cultivation. Regardingthe syllabus of training in the c'amps. it was stated that Ihis'ws'identical with the;■.trainm;: m England. 'But he was advised by men who had -one through the camps in England that this, was not so, mid ho would advise the Government to adopt a, scheme which would be similar to that to bo pone throu S h when they reached England. He was glad to , see the statement that the old age pensions were to bo increased, but he could have-wished to see an annnnnr-emonf, that military pensioners should- be allowed -to draw their military ueusions and their pkl JW pensions in iiddition. In his opinion tho 'Government misiht have increased the te on motor-cars by from 10 to 20 to cent. The amusement lax was expected tn produce JSO.WiO a. year, but he believed it should be possible to levy an amusement tax to produce double this amount without making the levy burdensome. He. was Kind to ow the excess profits tax repealed, for it hart -been an unsatisfactory tax in every way. It was proper that the Government should sivc n bonus on salaries of lower-paid Uyil Servants, for they were amongst tho neoplo who were feeling the burden or the war and deriving no benefit from it whatever. He was of opinion that the amount provided for expenditure on public works. -£750,(10(1. wns unnecessarv. He thought that if the Minister of Public/Works expended his unexhausted authorities this should sufiire in war time. •Vnother reason why public works shnuin b»-discontinued was thai ■ there was a 'ureat scarcity of men for private employment.

Equality of Sacrifice. Hβ believed in cf|"alil* of sacrifice, realism" that there could he no comparison bebvoon the personal and the iiiiancml sacrifice. 11 o would, however, have iked to sen some more equality in thn-liimu-cial sacrifice proposed. Ihe , new land -taxes were estimated to produce 41,250,000, but the additional beer duty was to bring only .£225.000. Why should this industry, which employed loss men than any other industry in proportion to its turnover, get oQ , so lightlyj . He thought every brewer should include in his nightly prayers"these lines: I'raiso God from whom all blessings flow, I'raise Massey. Allen, AVard. and Co. (Laiijjhler.) Re was opposed to the tax on tea. In conclusion, ho said (hat'' what had uleji.-cd him most in the statements made by the Primo Minister and the Minister of Finance was their statement regarding the good conduct of our soldiers. These men had fought as gallant warriors in battle and behaved like gentlemen elsewhere. The House rose at 11.10 p.m.