THE FINANCIAL DEBATE

Dominion, Volume 10, Issue 3160, 11 August 1917, Page 9

THE FINANCIAL DEBATE

DEFENCE MATTERS WAR BUDGET TAXATION. Dr. THACKER (Christchurch East), resuming the financial debate, urged the Government to make a substantial increaso in tho old-ago pensions. The Government had been able to afford an 'pnormous amount of waste in connection with Defence administration, and it ought not to grudge the money required to provide the old-age pensioners with, the necessaries of life. The patriotic funds had done great work, but they should not bo necessary. The money in these funds had been provided mainly by. the lowsalaried people and ihe wage-earners, while the men who could best afford to pay tended to escape. The funds were administered on district lines, and the result was injustice to the who were badgered about from one district to another. The administration was often most niggardly. Returned soldiers, widows, and dependants iu need of assistance were subjected 'to searching crossexamination by officials who did not represent the Government, but merely a semi-private organisation. Tho <tost of livin" question had not been handled in a proper maimer. Party lines had been observed in tho Cabinet, winch had not b«en a happy family .during 'tho absence o*"iiie Prime Minister. Tho Liberal Ministers and members had not had a_squarc Seat ~o 'honed tho Minister of Finance would amend the Budget proposals in order 'to ensure that tho small investors were not placed at a disadvantage as compared with tho big man. The worker at present was serving as the herring on the line that was to catch the p. 000.000 hapuka. The Minister would bo able to secure a large sum of money by soiling annuities at attractive rates to elderly people who "had small sums saves! up as provision for their declining years. Ho condemned tho censorship of the Pre«. The methods of tho ceiisorshin wore harsh and crude.. The introduction of religious sectarianism into the House was an unfortunate th'ii". n'.'d he was eorrv to hear refer<.,;„es to a handful of Marist Brothers, who were regarded with intolerance by some members.

For the Front, Turning to Defence matters. Dr. Thacker sni<l Hiat tho Commandant, the Oliiof of tlie General Staff, and .olonel "ifflsv should l>c allcwed to proceed to (l,c t>mit There was lots of work lot railwaymcn at tho front, and it npnearr. 1 tint as General Mauagor of lvaili/av« Colonel Hiley had no work to Tierform licro. There, two too many titles snd decorations in New Zealand, where r.-o- office apwared with miraciijlnus rapidity. The men who had done 6(n(T work in New Zealand ought all to he "ivon their chance at the front, and kverv man of tho Main Body should 1m brought hack. lord Kitchener .had said that'his engagement was for tho period of the war,, or for three years, if tho war was prolonged heynnd thrco years, and it seemed that three years was long enough for any man. "T hove no conscience as far as tho Minister of Defence is concerned," said Dr. Tliaekor. "f am unscrupulous about tho Minister of Defence, hecauso I think he is keeping a better man out of his place. People, everywhere are saying that the National Government is no good, and ought to bo put ouit. We aT6 told that the Ministors are doing their best. That is no good. Are they the best to bo s.ot in New Zealand? .Tust doing your best is no good. Asquirli did his best, but ho had to make way for Lloyd Georsro. Tie condemned tho dispatch from New Zealand of mon who had received i nly a few week's training, and tho "secret and surreptitious shipment" of conscientious objectors by transports leaving the Dominion.

Incidence of Taxation. Mr. W. NOSWORTHY (Ashburton) said ho realised that tho present unprecedented war had created extraordinary necessities. If it became necessary for tho Government to take everything tnat tho farmers of New Zealand possessed in order to win tho war, there would bo no complaint from tho landowners. But the timo for any levy on capital had not arrived, and he wished to emphasise the fact that the farmers under present conditions were being taxed not merely on what they earned, but also on what they owed. It was a fashion in somo quarters to talk as if the farmer was the only man in the country. w.ho was making any money. The people who had made- most money out of the war, as a matter ot fact, were the speculators, tho shipping and the banking interests. The person who levied toll on tho people was not tho producer, but tho middleman. Tho taxes propooed in the Budget were not going to trouble tho middleman very much, and he folt that there was need for ckango in the incidence of taxation. Both Mr. Massev and Sir Joseph Ward, had stated publicly that tho incidence of taxation required overhauling and remodelling, and it was true that somo changes had been effected by tho 1917 Budget. But substantial grievances remained, and the most serious of them was tho tax on debts-the mortgage tax. Why should a man be taxed on what ho owed? laxation should be a universal impost, lhe system in New Zealand had been to crowd taxation on land and incomes instead of being spread over the whole community. The Customs taxation had remained stationary during tho war period, while the land and income taxation had mounted steadily. He was glad tTie Finance Minister, had decided to place a tax on tea. The proposed graduated taxation was going to fall very heavily indeed upon tho men on the land, and ho felt strongly that taxpayers should •bo required to pay on what they earned, not on what tliev owned. Tho land'tax should be levied on the equity, the nmonnt of tho mortgage being deducted from tho capital value of 'he holding. Mr. W. T. Young (Waikatol: Who do you suggest should pay the balance? Mr. Nosworthy: ''It would be better to go back to the old system and put the tax on the.mortgagee. A farmer should bo allowed to deduct interest on his mortgage, interest on his overdraft, and 5 per cent, on' the capital valuo of his land in assessing his income for taxation purposes." Ho did not think tho gradations of the income tax should stoo at i£GIOO. A surtax should be provicied for larger incomes. It was a fact that largo sums of war profits had been capitalised in the early years of tho war, and had not been reached by the excess profits tax.

Excess Profits, Prominent I>iisincss men liad told him that tho abolition of the excess profits tax was a mistake Thoro had been cases of hardship under, the tax, but many wealthy men would gain a substantial advantago by the substitution of tho now system. The Government ought to make every effort to reach tho men who had the bis incomes. Tho Diianciul problem confronting tho Dominion was a stupendous one, and truo statesmanship was to make every class iu the community bear its share of tho burden according to its means. He was al»solutely convinced that a better system of taxation would havo (o bo ovolved. An increased tax 011 cigarettes would be a. vory good tiling for the country. A lioaw tax on motor-rars was also desirable, jtfost of tho care were used for pleasure, and tho users could afford to pav. Much of the money spent on the" upkeep of cars went oulsido tho Dominion. Ho advocated also an increased boar duty. Alcoholic liquor was a luxury, and should bolp to pay, thu increased Reflfliojis flp.a fulow,-

ances required for tho soldiers and their dependants. He would support the tea duty and would liko to seo an advance in tho spirit duties;

Taxation and Settlement. Mr. CI. W. FOltßliS (Huruniii) said that the ono thing that must have surprised Ihe Government regarding tho liudgcj was tho mild reception it had received in (ho country. Tho Government no doubt expected that tho .Budget would givo rise to a good deal of protest or aUverso comment, but this had not been so. It appeared that the country was prepared to carry even heavier burdens than thoso proposed in the Budget. Ho did not dispute Mr. Massey's prediction, that if the National Government wont to the polls it would he returned with a verv large majority. This was tho more remarkable in view of Iho fact that tho National government had been much criticised. ~ , Mr. Massey: Wo havo been compelled to do verv many unpopular things. AU-. Forbes: "That is so. But tho idea of a National Government is popular in tins time of war. It is the idea that is popular. He went on to say that it was tho fact that the Government was in such an unassailable position that was ono of the evils of the National Government idea as affecting the country. There was a danger that such a Government might become autocratic. It was not a good instrument for social legislation. Tho attitude of a Government so firmly established was apt u> bo that of the deaf ear. He was, however, of opinion that Ihe National Government combined in good measure wisdom, experience, and courage. Ho thought that probably the members selected for the Ministry possessed these qualities in rather better measure than other members of the House. J.ni» irigfit be throwing a bouquet at the JXaItional Government, but it was his opinion. He did not say that the National Government possessed wisdom in excess. (Laughter.) As a matter of fact it often happened that an'aggregation of persons possessing individual wisdom did not show wisdom as a corporate body. Mr. Parr: Only a littlo bouquet. Mr. Mas?ev: It is getting less and less. ' Mr. Forbe3 went on to say some more things about his bouquet, qualifying his praises until Mr. l'arr remarked "Only a littlo faded flower now." Mr. Forbes said that much of tho prevailing unrest was due to the cost ot living, a problem whioh tho Government had not grappled with courage. Ho disapproved of the withdrawal of the excess profts tax, and said that tho country disapproved also. The repeal ot the tax was not the proper answer to tho complaints about the incidence ot tho tax. Tho opinion of the country was that war profits ought to be taxed. Ho did not believe that the people, certainly not the farmers, were complaining about the weight of the tnxation. Bather they wero complaining that tho taxes seta not heavy enough for requirements. Sir Joseph Ward: If farming reprosentatives advocated increased taxes they would lose their seats. Mr. Forbes said that ho considered that of no importance. Somo people seemed to think that a member of Parliament snonld hang on to nis position abovo all things. Ho would be prepared to lose his seat at any time, and would not bo deterred from doing what he believed to bo right. No man should keep his seat after his usefulness had left him. He spoke of the steps taken by the C-overn-nient to provide for tho settlement. of returned soldiers on land, expressing Hie opinion that tho Government had not provided for tho big demand that would come lator. He advocated a substantial increase in tho graduated, land tax. Ho contended that tho grouping of tho graduated tax and tho flat tax had dono awav with tho effectiveness of-tho (ax. Ho declared that laud values wero still so high that tho Government could not get land. , , T Mr Massey: Whero aro the sales.-; I havo tho best of reasons for kjhwiiht that it is almost impossiblo to <ell land to-day. , , ~ , Mr. Forbes strongly advocated heavier taxation on luxuries, especially en liquor and cigarettes. The debate was adjourned on Iho motion of Mr. C. A. Wilkinson (Egmont), and tho House roso at 11 p.m.