FINANCIAL DEBATE

Dominion, Volume 10, Issue 3170, 22 August 1917, Page 6

FINANCIAL DEBATE

SPEECH BY MINISTER OF , DEFENCE Mr. J. A. YOTJNG OVaikato) resumed tho financial debate. He said that under oxisting conditions tho lot of tho Ministor of Finance could uofc bo regarded as a happy one. The war was demanding tho sacrifice of tho nation'a wealth _ as well as its manhood, and was creating problems of *a very grove character. Ihe Government had to find huge sums of money, and he could not aflord to wait for the investigation of all the details of schemes of taxation devised to meet war exigencies. Last year's taxation had contained many weak noints. But Minister bad not failed to profit by his experience, and the Budget proposals of tho present year represented a substantial improvement iu several rospocts, thoiiffh the amount of money to be raisod was larger than ever. Tho burden would be heavy in many instances, but Now Zealand people would console themselves with the reflection that they were no (

woi'fiu on in Luis respect .Wan llio puupie oi uwer iuiiu». nu tiiac lucic

aiiUlliu bo \uiu-reui.tuivu uctWtcii cariicU. and uuc-urjitu ur, lu pui it Lu navuivv huy, humeoi-. property jiicumea anu oervico iiieumea. 'luo

ui i'U£<uu to iuuuicu resicU \uiii uiu uo\eniUicui. I'rivuLu wejjim;i'a couai ci»uClab «1 JUL Jjilt llH')' COUJIU UUL inmate, ana ua-y uau nu means oi rcvjsiiig luo ot lue uoicnJUJ^iii. iHr. .Loung urged mat a <i<.'uucuv>u oi a pur teat, oil uic cupiiui vaiuu siioiua he anuvvcu ill Ulo ca-jt-ri OI Jueouiea earneu liofli lanu. xae giauauous ui liiuoine SlHHlilU HOC ceuau ai WilL'll lilfc |Ucoiiie came lrujjj jjOui'OLM omer tiiau iaiiu. i)Ut men wuo wuro aueaui' paying laud tax would he ptaceu in veiy uniair position ii income lax at a late in advance oi 7s. (iti. hi lno imiuki were a<iaeu to tue land i,w>. mo posjliou oi companies rccjuiivu .o ue coiisiuerea very eaicluily in i.ie oi snarenuMei's wno vert* noi nece.-'sai'Uy large iii-

vestors. 11 w;w a lact mat snmii investors suffered under We present i.yoiuiu. Tho allowance of o per cent, lor depreciation of niacmncry and plant was inadequate. Tim assets capal>ie o± depreciation suould be ciassUied and lair c-aies oi allowance iixod, as was the case in Australia wliere tho allowance lor depreciation ' went as high as 20 per cent. It was timlair that a person whoso income did not exceAl a lew hundreds a year should pay income tax on Ue lugneat scitio because his savings were invested in a big company. Ihoßritish Go\eminent had guarded against hardship ui this kind by providing for the reiuud ot 'ncome tax in the case of small m.'es"lors The land tax would amount to an encroachment upon capital m some eases. It would be reasonable to give the Commissioner for Taxes power to suspend payment in suitable cacies, or to attach the amount of the unpaid taxation to the properties, the money to be paid when the land changed nanus. He did not agree with the pioleat tnat had been made against tho "free of income tax' - provision in connection with tue • War Loan. People could not have been expected to lend their money at 41 per cent, without this provision, since the income tax would have reduced the interest. to less than 3 per cent. He thought that the people's amusements should be classified according to their social value, and the amusement tax adjusted accordingly The fax should be nude light on low-priced tickots. The beer tax flight well be increased. The war bonus should not bo paid to Civil Servants who received more than <£300 a year. The Government might consider the of providing for the payment of a war bonus to all low-salaried workers in New Zealand. There was a deal of feeling throughout the country regarding {lie freedom allowed to enemy al.(-ns. He thought that the Austrian* and Slavs in the Dominion ought to be coascr«pted and given national won' in New Zealand if it was not possible to send tiiera lo Salonika or some other front.

THE DEFENCE MINISTER. REINFORCEMENTS AND QUOTAS. The MINISTER OF DEFENCE (Sir James Allen), after dealing at som» length with charges brought against General Godley, proceeded to refer to the reinforcements question. He said that the New Zealand Government had never, except on one occasion, suggested that the quotas should be increased. The Government had simply provided reinforcements on the ccales laid down from tiina to time by the War Office. The Imperial authorities had made, requests which New Zealand had carried out. A member: Morei than carried out. Sir James Allen: No. Members: You have formed a new division. Sir James Allen: Wo have formed _ a new brigade out of accumulated reinforcements at the express wish of the War Office and against the opinion of the New Zealand Minister of Defence. I am not able to disclose the correspondence which took place. Tlie new brigade was not being reinforced. had been made to Australian reinforcements. Tho fact, as disclosed by Mr. Hughes, was that Australia lad been asked to provide 16,500 men jer month to reinforce tho live Australian divisions. But the Federal Government had failed to carry conscription, and the necessary men were not forthcoming. That was why the Australian reinforcement quota had been reduced to 7000 per month. He understood that tho Commonwealth was not getting even that number of recruits. Was it to bo 6aid that New Zealand, with a clear request from tho War Office to guido it, was to follow the example of Australia? The Minister read letters ho had received from General Birdwood in 1915 urging tho need for adequate reinforcements, and said that he felt it his duty never to allow the New ZealaJid Division, from any cause whatever, to fall below strength. The extra brigade had been formed for a epeci.il purpose. Mr. Young (Waikato): What is tho special purpose? Sir Tames Allen: I am sorry I cannot disclosa everything. Certain information is submitted to the Government which is confidential. lam not at liberty to state what tho special purpose was. Tlio reduction of reinforcements from 15 per ccnt. to 12 per cent, per month was tho result of tho experience of tho summer campaign. Improved organisation, increased ammunition; and strengthened artillery have' made our casualties lower than was anticipated.

- Allocation of Commissions. The Minister explained the system of granting commissions in tho Expeditionary Force and reinforcements. The fact that Territorial officers were not receiving undue consideration was shown by the fact that First Division Territorial officers wero at present competing in camp for a limited number of appointments as second lieutenants. Tho unsuccessful officers would revert to noncommissioned rank. Members of tho New Zealand Forces wero being granted many commissions in the Injperial and Indian Forces. There had been some grumbling with regard to. commissions in the Twenty-ninth Reinforcements. The fact was that the reduction-of reinforcements had created a. surplus of officers in tamp, and only fivo coHtnissions had been available for the Twenty-ninth Reinforcements instead of the expected twenty. One other commission had sinco been made availablo. He "believed that tho method of allocating commis-! sions was fair. The choice was made after the examinations had been completed, and after tho responsible officers I had made independent rcommendations.

The Rejected Men. The Minister proceeded to deal with questions arising from ballots under the Military Service Act. Ho said that 20,608 of tho men drawl! in tho first nino ballots had been classified as unfit, most of them being classed as C 2. A special training camp had now been established at Fcatherston in order that some, of these moil might be given courses of training and treatment calculated to fit them for military service. A special staff had been appointed, and two expert, instructors, one of them a New Zealandcr, were being brought from England. The medical history sheets of all tho men were being examined, and "the men who might be made fit by treatment would lie drafted into the camp. If they bccamc fit they would go into tho reinforcements; otherwise they would be discharged. He was informed that probably from 1500 to 2000 of the men at present in the medically unfit list would bo made availablo for service. Tho men whoso appeals had been adjourned sine dio would be called before the Military Service Boards again and their cases would bo reconsidered. Tho boards would Tiavo to give attention to the needs of tho industries of the country. If a man was essential in his industry, and his industry was essential, tho boards probably would allow his appeal.

Defaulters. There hail been a certain number of defaulters. The lists of defaulters already published in tho Gazotto contained between 1500 and IGOO names. He was informed that between 800 and 000 of the men had been discovered, and that 300 or '100 had been found to be available for service. There wore about 3000 defaulters who had not been traced, and who had not been served with notices. Probably the military authorities would be able to account for a good many of them. He would make an announcement on the subject shortly. Furlough Arrangements, The Hon R. 11. RHODES ,'Ellesmere) said he was glad the men at tho front were, to be Riven the option of having their furlough in England instead of being compelled to oorno back to A T eiv Zca-1

land. Ho hoped the men in Palestine would also )>e given au opportunity o£' spending their lurlough in England. Mr. Khodes proceeded to pay a tribute to Iho late General Johnston. Jfr. Rhodes knew General Johnston in South Africa, (jallipoli, and Egypt, and he had learned to appreciate him as soldier and as a man. General Johnston was proud of his men and his men loved him. Kew Zealand mourned the loss of a good soldier, and he (Mr. Rhodes) the loss o£ a good friend. Hints About Taxation. ' Mr. G. H. SMITH (I'ahiatua) said he' would like to see the ,£IOOO exemption in regard to the land tax to small landholders with a mortgage raised to .£2OOO. 110 favoured an income tax deduction on men with large families, and said the. sanio net balance should be used for the> war tax. lie did not see why the graduated tax should stand at jEGiCO. There, should be some difference made between the earned and the unearned income. Thero was no better investment for a. rich man in New Zealand to-day than to put his money into war bonds. There should be some way by which the Government would bo sure 'hat it was securingreturns from all those liable to pay land, and income tax. There must bo hundreds, of men avoiding paying taxes. lie described the tea tax as a blot on tho Budget. 'Pea was a necessity of life; it was u necessity to poor people. He agreed with the member for Sapier that beer, wine, and spirits should be heavily taxed, in preference to tea. If all mortgagees' indemnities were to be allowed tocontinue, the Government should insist that they be taken out ill the State Office. The money received from the tax on motor-cars and tyres should be made available for the upkeep of tile roads they damaged. He would like to see the Government tak6 over the arterial, roads. He suggested that single men and women in the Civil Serine without dependants should receive a ten per cent, war bonus up to .£IOO salary, to be reduced by Jl for every i.u' above that: amount, the bonus disappearing at i£2oo. Special provision would have to be made for single man with dependants. Married men should receive a 10 per cent, bonus up to «£2OO, with an additional 5 per cent, for the wire, afifl per cent, for every child. Above .£2OO it should diminish by l-10th for every .£l2, disappearing at .£320. New Zealand, to be a prosperous country in the future, must depend upon close settlement. Mr. R. A. Wrignt moved the adjournment of the debate, and the House rose at 11.15 p.m.