PARLIAMENT

Dominion, Volume 10, Issue 3182, 5 September 1917, Page 7

PARLIAMENT

THE FINANCE BILL -AMENDMENTS IN .COMMITTEE QUESTION OF CONCESSIONS NATURALISATION OF AUENS Tho .House .pf Kepresenativw met at 8.30 p.m. RIVER BOARDS AMENDING BILL CONSIDERED. . The River Board Amendment Bill was tonsidered in Committee. Mr. 1). Buick said tlip Bill contained Very drastic proposals. It took power out of the, hands of local authorities, "which represented the people concerned, and gave the responsibility for spendi'ig Woufay to an irresponsiblo body. Ho did Jiot see why' such a Bill should be brought forward at tho present time.

Mr. T: K. Sidey said that'lie thought the provisions of. tho Bill went Tather far.. A very great deal of.power was being given to .tho nominated authority proposed by the Bill.

> The i Hon. D. Buddo said that some protection should be given to local interests before a nominated commission was given .power to take over important public works. What rivers did the Government intend to deal with?

Mr. D. H. Guthrie said he would Jiko _to know from whom tho Government proposed to draw information before puttiug the Bill into operation. Ite would oppose tho Bill if any casual person was to be allowed to tell the Government that a :river board -was not doing its duty, and pet in motion machinery that would take authority.out of the hands of tho local Authority. . . ..','' The Hon. W: Fraser (Minister of Public •Works) said that; the commission proposed by the. /Bill would hot have aiiy .powers not already possessed by the, river boards. Tho need for the Bill arose from the fact that some boards' were not doing their work. There Were cases where'boards had neglected their work, and other cases where they had wasted money, or done grave injury to neighbouring districts. Ctfmplaint had been made by ratepayers in many instances.

Mr. W. H. Field said .that he thought the Bill contained tho necessary safeguards. Provision seemed to be needed for cases where no riyor board was in existence, and where landowners were quite unable to make tho Expenditure required to. protect their properties. Tho position was serious in many parts' of the country. , Mr. G. : Witty said . the ' Bill". was required, but ho thought the commisnon that- was to undertake inquiries and report to the Government should not bo ; nominated entirely by the Ministry. •'. Mr. E. Newman said the Bill was farreaching. -■ It appeared that the- Government, being' informed that a river board was not doing its work properly, was to have power to .lake responsibility out of the hands of the ■ local authorit}' and put tho Public Works Department in charge. Then tho people would he made to pay for. work'done without their authority. The Bill was dangerous, and it certainly.was not war legislation; Ho thought it should be held over until after the war; The Hon. G. W. Russell, Minister in Charge; of,the Bill, said the proposals had been drafted to meet a Teal need that had •■ become manifest. in various parts of New Zealand. Tho Bill did not deal with any district where there was no river-board in existence. A district that was being injured i by river . floods could secure the creation of a river board by petitioning the Government. .- There was power, also, under the Counties;' Act for county councils to deal .with rivers, when erosion was occurring. .' The councils had'hot.showA any' desire to make use of these powers.. He .1 hoped the time would come when county councils would handle all the_ local government matters within their borders, just as.a municipal body dealt with tho affairs of the municipality. . He was disposed to accept a suggestion that tho local ; bodies adjoining a river should be entitled to , nominate one of the engineers sitting on the commission of inquiry. The need for. the powers conferred by do Bill had been shown abundantly. Some of tho Dominion's rivers, were being neglected to a dangerous extent. Work was being don© In .other instances-in a haphazard fashion. One 'river board protected its own particular district in such a fashion as to injure another district, Tho Department would not take action under the Bill without very careful inquiry, and the Government would not bo compelled to act upon the report of the uommis--6ion..' The powers contained in the Bill might be invoked by meetings of settiers, by petitions of people who were suffering injury, or by neighbouring local authorities..'Mjocal interests were fully protected. .['':..■. Dr. A. K. Newman said that the Bill touched some very big works, such as the drainine and conservation' cf the Manawatu River, involving an expendi-

ture of over .£150,000. The people of a ■district should not bo liable to have such an expenditure forced upon them without their consont. Ho "hoped the Bill would not bo allowed to pass in its present form. It was proposed to givo Ministers power to ■undertake huga public works without appropriation by Parliament. Sir John Rndlay said that the pro. pqsate of tho Bill were anomalous. A river board liad no power to borrow money for. works. The commission was to have power to do the work, and then give the board power to borrow, the money and rate the peonlo for the payment of interest and sinking fund. Surely the board should first have the chance of doing tho work on its own account. Dr. Newman urged that the people concerned should, have the right to vote on any proposal for large expenditure. ."' The Hon. G. W. Russell said it was very diffioult to get a loan proposal carried, 6ince the people who were not directly affected would not vote for the loan. • Only those people whose holdings adjoined the river were directly affected. Ho would accept Dr. Newman's suggestion by inserting an amendment that when the proposed expenditure exceeded JioO.OOO a poll should be taken. Mr. R. M'Callum said ho did not think that the local bodies could not. be trusted to' eelect one of the engineers on the commission. There would be i/o objection to the election of the lay members of the commission.

Mr. Guthrie said he would oppose the Bill if an unlimited burden of debt could be imposed on any district by the Government. He hoped country members would support this view in the interests of their constituents. Subsequently he moved an amendment to reduce the amount to be expended without a poll of the ratepayers to .£25,000. This amendment was accepted by tha Minister, and inserted in the Bill. The' Bill was reported with amendments, read a third time, and passed.

NATURALISATION

ENEMY AND OTHER ALIENS, The Revocation of Naturalisation Bill was conunittod. Mr. It. M'Calluin ufged that special exception should bo made in favour of citizens of friendly nations, and that revocation should bo made only of tho privileges of enemy aliens naturalised. Tho Hon.'G. W...ltuisscll said that any such. provision would tie tho hands of the'Government'in such a way that it would not bo possible to deal with persons from certain neutral countries which were overrun by Germans and German spies. The House would have to trust, the Government with a power which- was necessary to it in war time. He assured the House that no harsh measures would.be taken evon against persons of enemy alien origin who had for a long period of years lived as good citizens in this country. \ Mr; M'Callum persisted that only enemy aliens should be dealt with in the Bill, saving that the passage of such a Bill, applying as it did to our Allies, was an act unfriendly to those Allies. Tho Hon. A. L. ,Herdman said that the Bill was being introduced on the advice of a cominilteo set up by the Imperial Government to, consider this very question. ' The House could bo assured that no action would be taken against Frenchmen or other friendly aliens, but tho Bill was urgently necessary. Mr. J. M'Cpmbs said ho did mot approve of' tho proposal in the Bill to allow tho Government to abrogate on suspicion - the contract entered into with every naturalised person. There should be provision for an appeal i© a Supremo Court Judge. - Several other members spoke on tho question, and all of them supported the Bill as presented. i . The Eight Hon. W. F. Massey said, that the question before the House had been discussed by the Imperial War Conference, and the. proposals which the British Government made were much more drastic than those in the Bill. The Bill was reported without amendments; read a third time, and passed.

FINANCE BILL COMMITTEE STAGES THE .MINISTER ON CONCESSIONS. Amendments to the Finance Bill were introduced by Vice-Regal Messa£-8, and the House went into Committee on tho Bill. - Sir Joseph Ward said that a suggestion had been made in the course of the second reading debate that a btamp should be- placed upon each packet of cigarettes. That proposal had been reported upon by the Customs officers, who did not consider it practicable to give it effect. Tho use of stamps would involve the employment of a numbor of inspectors, and there were other difficulties. He had decided instead of that to make a further increase in connection with cigarettes, so as to let the country have tho benefit of about .£BO,OOO of increased revenue. The exemption of .£25 of income tax per child in connection -with .the assessment of income tax was to be extended to cover all children under sixteen years of age, regardless of'the incomo of the taxpayer. Income tax was to be paid by the Government Fire Insurance Office ori the ordinary' basis. The firo insurance companies had put £300,000 into the War Loan, and it was only fair that the Government Office should pay taxation on an equal footing with the com-

pnnies. The Stato Life Insurance O.'Eco already paid inooiuo tax. Mutual Life Associations, An amendment was being made for tho purposo of meeting the point raised by Sir John Kndlay in connection with tho Mutual Life Insurance Company. Tho income of foreign insurance companies was to bo diminished, for assessment purposes, by an amount equal to two per cent, of its investments in New Zealand, tho income from which was not exempt from taxation. This would mean a concession of, .£50,000, but it was necessary. The whole matter had been gone into, and the amendmont would place the companies on a fair basis. / Gold Duty. ' Au amendment was proposed in connection with the gold duty. Owing to the instruction of tho Imperial Government gold was not being exported, and for two years tho gold won in New Zealand had been at the disposal of the British Government. The result was that it remained in store, here for a long time, and as it was not exported, the duty payable on export had not been available for local bodies. It was very nccessary for the local bodies to have tliis gold revenue, and the proposal was that the duty bo paid to local bodies prior to tho gold being exported. Some localities, notably Waihi, wore dependent on the gold duties for most of their revenue, and it was impossible to say how long the gold would be held. Another amendmont was for the object of helping people wishing to borrow from a bank to invest in the loan. The newclause provided that whon a bank made an advance the bank got a lien over the certificates of the men who borrowed the money, and that the Registrar could not. allow any other transaction ■in the stock or bonds until the lien was. returned by the bank. This arrangement woiud give security to the bank, and without doing hurt to the investor would make it easier for him to get money.

' Requests for Relief. Mr. T. K. Sidey asked the Minister whether in view of the success of the first portion of the loan ho' would consider tho qcastion of striking out tlio compulsory investment provisions as affecting tlio loan of last year. Ho. hoped tho Minister would relax thoso provisions. ....

Mr. J. M'Coinbs 6aid that in his opinion the compulsory loan assessment should bo made not upon income, as it was in the Bill, but upon wealth.

Dr. A. K. Newman made an appeal to the Minister to differential between earned a.nd unearned incomes in assessing for income tax. In England this distinction was made. People who were earning incomo were not in noarly such a good (position as the mon who had an assured income , from investments. The man earning his income often had a precarious incomo. He would urge the Minister to give him a 2<> per cent, robate., .. ■ . ' .

Mr. J. Anstoy asked the Minister to increase the exemption allowed in respect of mortgages. If this were not done the tax would be a severe ono on a class of people not able readily lo bear it.

The Hon., D. Buddo also pleaded for some more liberal exemption to mortgagors with- small holdings. • He also asked for- Borne relief from the compulsory loan provisions for farmers' co-op-erative companies. Mr. T. -M. Wilford asked scmo questions about banks. He 6aid that tlio banks hithorto had been required to keep a gold reserve, returning no interest, and ho ; supposed that in future they would be holding Government bonds returning d.J per cent. Ho considered that very soon a now' basis of taxation on bagks would have to bo devised. At present tho tax was assessed on far too generous « basis. He thought the taxation ori companies was not fair, because the assets of a company belonged to the shareholders, a company itself not being an entity, except as an association of sharelioluers. ...

No Time for Concessions.. , Sir Joseph Ward said that honourable members need not '-worry about the effect of the compulsory, lending clauses. Already the Government had got sixteen millions of money in, "and, ho said, "that isn't bad." The amount required in future was not so very great, and the Appeal Board would be ablo 'o grant relief in any case of hardship. He woujd not go into the question of whether it would be possible to Heal with the point raised about earned and unearned incomes. The tinio to make any concessions was not now. He did not feel at liberty to give away any revenue at all. If ho woro to make a distinction at all it could iiot be by way of a concession to the men earning -incomes, but only by way of an increase in the rates payable by men iE receipt ol unearned incomes. And this would not give much satisfaction to tho man earning his income. He did not feel that it was necessary to raise the rato on unearned, incomes yet. It was idle to talk about -anomalies in the system ot taxation proposed, because there never was. a system of taxation vithqut anomalies. What was to be done about taxation/of companies? There was no agreement among members and shareholders of companies. A flat rate tax, which some asked for would penalise tho small companies and let the large companies' out easily. In practice tho only way to give reliet to shareholders, without losing a million of revenue, was to give an exemption, and in tho Bill an exemption ot JHOU was provided for. Two-thirds of the taxation was war taxation, and as lon» as there was war taxation there must come from •do general bodv of taxpayers some complaint about the unusual pressure.. The Government could not Temove these, war anomalies in' taxation, because it could not aftord to lose revenue.' There was no doubt that banks'should be charged on incomes earned, and of this the banks were quite in favour It was-difficuit to discover exactly what the banks incomes in New Zealand were, and the present method was a device adopted to oollect approximately the same amount of money. It was< not correct that tho banks were reducing their gold reserves. Tho report that they were, going to do so was like another rumour he had heard-that Now Zealand had received Ik millions of War- Loan rnolioy from America. New Zealand had received no money from any other country for the .war. We had raised all the money ourselves, and ho thought we had done "mighty well." On the question of remission of all taxes on lands held for sports purposes, he said there was a generous proposal in tho Bill to charge half rates. It would not, he thought, be proper to exempt them altogether. In reply to a question he said that-agricultural showgrounds were absolutely exempt. -

The Mortgage Exemption. Replying to references to the taxation of mortgages, Sir Joseph Ward said that if the Government was to get the rc- . quired amount of revenue from the land tax it must adhere to the system proposed in tho Bill. He could not let go of the taxation, which did not really represent the taxation of debts. He had made a concession already in favour of the small men, and lie was prepared to go a little further. He could not yield anything beyond his present proposal. Ho would'consent to extend tho mortgage exemption by £i for each £1 over .£3OOO unimproved value, the exemption- to disappear at .£6OOO unimproved value, instead of ,£SOOO. This amendment would mean a further toncession to the small men. If tho proposal was extended to large mortgages, thou the Government, would lose its revenue from the land tax. Other countries . were finding it necessary to levy taxation in the way proposed in tho Bill, in order io get their revenue from land tax. All taxation was bound to hurt somebody. The Hon. It. Heaton Rhodes urged that, old-age pensioners should bo allowed to earn'up to, say, .£52 a year without suffering loss or reduction of ponsion. Soma of tho old. men were able lo earn quitu it little on farms, and in these

limes were very useful. Mr. J. Pavno took exception to the amusemont tax, saying that it would exempt (.ho continuous shows in the big towns, whore the admission rate was 6d., but would hit the small showman in tho country towns where it was not possible to run at a less admission rule than Is. Ho asked that tho tax should be levied only on tickets that cost more than Is.

Thoro was considerable discussion on tho question of tho exomption of mortgages. It appeared that the Labour members, including Mr. Voiteh, were tho only keen supporters of the Minister's propos-

als, whereas most of the farming representatives in the House were against tho Minister's proposals as set out in the Bill. They argued • that farmers were being unduly taxed. . Progress Made. At 10.50 tho first clause was passed, and after that rapid progress was mado on the Bill. There was some remarks on CJauso 25 dealing with the taxation of sports grounds. Sir Josopli Ward said that only half rates were to bo charged on these grounds so long as they remain sports grounds, and he suggested that as tho Ciovcriiment had promised to assist financially those sports bodies which might be in difficulties they were not being treated badly. He promised to look into the question lis affecting privately-owned land now leased to sports bodies, and lands held as endowments or leservos by libraries and mechanics' institutes. To these points he preferred not to give an off-hand answer. Clause 31, allowing exemption from company income tax to shareholders in receipt of incomes of less than .£3oo' was amended bv tho addition of a proviso to the effect that no exemptions would bo allowed to operate for the Denofit ot a shareholder receiving more than li per cent, on his shares. The Compulsion Clause. Replying to warnings of members against the dangers in Clause 37, deal'*!; with compulsory subscriptions to the War Loan, Sir Joseph Ward said that tho provisions ■of the clause had been circulated for some time, and that amongst many representations he had had from the best business men in the country ho lind heard no complaint against this clause. He assured tho H'ouso that tho taxpayer would bo well protected by the process of appeal to the board, and he would never agree to cut out the clause, and so allow the wealthy shirker to stand aside and allow others to provide for the cost of the war. Dr. Newman said that tho clause was ono of the mast widely approved and favoured clauses in the Bill, and in this opinion lie was supported by several other members. The Hon. A. M. Myers said that tho clauso would do a great deal of food, not only in catching tho financial shirker, but in promoting national economy. Tho clause was passed. Progress was reported, and tho House rose at 11.40 p.m.