TAXATION

Dominion, Volume 13, Issue 272, 11 August 1920, Page 8

TAXATION

THE SYSTEM DISCUSSED

WAR PROFITS AND WAR TAXES

RELIEF ASKED FOR SMALL PEOPLE

The annual taxing Bill, as it is commonly called, was introduced in tho House yesterday afternoon. This is the annual Bill which is brought down to givo the Government authority to collect the taxes on land and income for tho year ended March 31 of tho year past—in this case on March 31 last. As a general rule the measure goes through without remark as a matter of course, but members took the opportunity on tho introduction of this measure to" say Something to the Government of their opinions about taxation generally. The only real point made in tho discussion was that the inequalities of the present taxation were so onerous that no delay should occur in relieving the people from some of tho burdens. They therefore pressed the Government to defer the Bill, and to embody in it the now proposals to be brought down during the present session 'for the collection of taxes for next year. , Many members pressed for the immediato relief of some of the people from the burdens of too heavy Customs taxation.

A Fair Basis Demanded. Dr Newman said that he hoped that the Bill would be held back until tho new proposals of the Government had. been approved, in order that the. taxation for the year should be levied on a new and more fair basis. He said that the small man was having a very bad , timo indeed under tho present scheme of ] taxation. One of his suggestions wa« that the rate of taxation on earned incomes should be lower than on unearned incomes. The allowances given to men of small incomes wero not considerable, whereas the allowances to big business people of four per cent, on their buildings for depreciation was a very handsomg allowance. .. Mr. Lysnar suggested amendments in the incidence of land and income tax, with special reference to lands held by Natives and by syndicates. Mr. Luke also mado a plea for tho poor taxpayer. He thought tho burden ought to bo borne by thoso able to bear it and he suggested that more might bo taken from the payers of land and income tax. Mr. D. Jones deprecated the cry that the rich man could pay all tho taxes. He agreed with tho oft-repeated demand that the burden should bo placed on the shoulders of those best able to bear it, but what many honourable members did not remember was that the percentage of rich people in New Zealand was very small. The truth was that the people of-New Zealand wero "all in tho same box," and they must all carry the taxation together. It was quite true that tho rate of taxation in this country, was much lower than in Great Britain, butthe position of this country was vastly different from that of Britain, which had her manufactures on which to levy. Iho position was that Britain had the world under tribute to pay for tho war. As to the complaint that the Customs taxes wero all paid by tho workers and the poorer people, the Year Book showed that tho great bulk of the needs of tho working people wero for goods which paid no dutv at all. ' . Mr. Holland showed how implacablo an advocate he is of the revolutionary teachings of his school. He declarod th.it all profit was something for nothing. and that it was a propor source of taxation. Someone suggested to him tint there ought .to be somo encouragement for saving, and he replied: lne people who save mostly save what tho other fellow earns."

Mr. Massey 'in Reply. The Primß Minister replied on a later stage of the Bill. He deprecated the /suggestions that had been, made that there had been delay in the presentation of business to Parliament and tli&t this was due in some measure to failure on the part of the law draftsmen. Honourable members seemed to imagine that it was fl6 easy to draft-a Bill as to make a Bpeech. In reality, the task of preparing a difficult Bill was arduous, and the work could not bfi hurried. He ha<l kuow'nof instances before his Government c,ime into office in which men had been paid as much as .£250 and more for drafting measures for the Government. It was highly-skilled work. Did honourable members know how many Bills had been presented to PailiauicnttlnssesBion? Tho number wis 2J, and of these 13 had bcon finally dealt with. Mr. M'Callum: The best work m Parliament you have ever had. Mr. Massey: I believe it is. That is m jlr! lo M'Cnlhim: The no-confidence deMr. Massey: "The no-confidence debate ? That was hardly worth taking notice of. He went on to Bay that there had a suggestion made that this taxing should bo withheld till he_ Public Accounts Committee had dealt Tilth_tho new proposals of tho Government say_i a month's time. It was apparently no understood that the collection of I land and income taxation was a matter lor which long preparation had to be mad®, and if this Bill wero delayed for a month there would be delay in the collection of the land tax due in November.

The Customs, There had been complaints also about the increase in Customs taction Hon nurable members had not takou the trouble -to ascertain «» fvmn the Year Book. ine Uistf""* revenue was not now such a largo pioportion of the total rwnuc a:s itjmd ton in past years. In 1900, for instanc, the Customs revenue had been 38.39 pei cent. o£ the total revenue, to-day the percentage was 18.37, less than lia proportion of twenty years ago. Mr. Holland: That does not. get. away from tho fact that you are increasing it \r ifc: "A"d I <an with the revenue. What about tho increases in other directions?" Ho added, that he fully expected that more money . would Asa tw. "?.■«».» this was an judication of the genera nrosneTity of the country. S to direct taxation he said ha New Zealand had probably the liighfest income tax exemption in the M he was rather proud of this fact. Our exemption was J!300, wherea:s n < it was JIM, and in Australia £MAnother fact to be weniWw bat 3.6 of the taxpayers paid over 80 per cent oi the direct taxation, and tho 3.6 —"of'further debate, Mr Malcolm (Clutha) urged the Government to relicW the farmers om income tax on incomo dernable fiom land. This tax had* ln , ,posc , war purposes. It was in effect a < ° tax, and it did not operate Mr M'Combs (Lyttelton) retorted that.the removal of taxation from fanners would benefit only the Rollers- of land, ih capitalised value of tho concessit,!i »ouW ho added to the value of tho land, ana tho farmers of the future lax to the mortgagee or tho Janclloia instead of to tho State. "Unoarnod Incremant."

Labour members had something to say aljout "unearned increment and com-wunity-created valued." Mr D. Jooes (Kaiapoi) interested tlio House for half-on-hour while ho analysed land values with tho objcct; ofshow in;, that much of tho eo-called unimproved value" of land was . really created b) thn farmer. Ho pointed out that tho unimproved valuo" included the.— paid for the land by tho pioneer sottler., most "f tho 0 "? on ® +& draining, grassing, and Im P'' OV M J 1 ' 0 land, most of tho monoy and skill Pnlied to 'ho improvement of stock. and S farming motlfods. These factor, and others aecounled for more than all tnc. "unimproved value." Mr. Jones drew a lire of interjections from the Labour tenches. Ho _ assured the Labour members that if thoy wanted to hn\e "tho full product of their labour they could go on some part of New Zealand s remaining areas of unimproved land. They would desorvo every P elll| y "J. e J earned. But, as a matter of fact, tli» honourable membors preferred to stay in town, because they realised where the greatest comforts and advantages woro

to 1)0 enjoyed. AVJiat would bo the "unimproved value" of a. Labour member on virgin land in the back country? iNot J3OO a year and privileges. (Laughter.) llr. Jones retorted to further interruptions by offering U> put the eight. Labour members on bush bind in tho back country if they really wishod to enjoy nil they produced. He would finance tlieni at (S per cent. Would they accept the offer? (Laughter.) The truth about tho Labour group was that it was out to destroy capital, not to build. Tho Lalwur members looked to Hussin for their model. The New Zealand Lenin eat in tho House, waiting liifl opportunity, jn Russia the nation had been placed under an autocracy. Every man was forced to work eight or nine hours a day, to work for the boss assigned him at a fixed rate of wages. His food was 6topped if he refused to work. Day labour had been dropped in Russia, and a stern contract system was in operation there to-day. Kussia had a tyranny that would never be tolerated in this country

Who Made the Values 7 Mr. Howard (Christchurch South) objected to the assumption that the owner of the land was tho man whose labour put up the value. The lands of New Zealand nad been made valuable by tho sweat of men who had made roads, 'bridges, and railways, toiled in mines and fields and ships, lived in tents and 6hacks, and struggled year after year to obtain a hare .living wage. The farm labourers had done more work on New Zealand's lands than the farmers, but they had received none of tho profit. Mr. R. A. Wright (Wellington Suburbs) replied to the Labour men's onesided statement of the case, and their declaration as to who alone were responsible for the creation of increased land values. But he said that already there were evidences that some members of the Labour Party had discovered that they could not realise all the dreams they had had outside. lie denied emphatically that members of the House were under the whip of any group of capitalists or of capitalists generally.

Opportunities for»AII, "Tlie extreme Labour members cannot point to a single man who is worthy to go on tho land and is willing to work, yet who cannot get on the land to-day," said Mr. J. It. Hamilton (Awarua). Men who had come to Now Zealand without money a few years ago were on farms of their own to-day, because they had been prepared to work. Yet there were two men to do one man's work on the wharves, and the discontent city workers were being taught by their leaders that the way to get plenty was to produce little. Labour extremists would like- to mako it a criminal offence to practiso thrift, economy, and industry; they stood on the soap boxes to tell people that the man wlio worked hard and saved money was nn exploiting capitalist, whose money ought to be confiscated. There was not a nntn on the Reform side of the House who had not had more blisters on his hands than all the eight Labour members. The followers of extreme Labour, said Mr. Hamilton, flocked to the picture 6hows in the towns, while the farmers were still at work. Mr. Froser (Wellington Central) told the House that the Labour members did not propose to destroy capital, which was the product of the industry, of the workers, or to massacre capitalists, which would be useless and unnecessary. They proposed merely to adjust thie distribution of capital and products on a fair Iwsis. lie proceeded to talk Socialist doctrine at some length. The Land and Income Tax Bill was read a first time at 11.6 p.m., after nearly five hours' debate on the report stage.

WAR MEASURES RETAINED THE BENT RESTRICTIONS. The Prime Minister moved the second reading of the Statutes Repeal and Expiring Laws Continuance Bill. He said that it was merely a machinery Bill, repealing twenty-five pieces <>f legislation rendered unnecessary by the termination of the war and continuing seven other pieces of legislation. The i most important proposal was the extension of the protection given to tenants during tho war. Mr. Massey explained the Bill briefly. The definition of a discharged soldier for tenancy purposes was being amended to omit men who had never been in camp. Mr. ■' Sidey (Dunedin South) said the Bill really contained a gf.od deal of policy, It continued important and drastic measures that had l>ecn intended for use during tho war. He doubted the wisdom of extending tho lease to private persons of the Parapava iron deposits. Tliis natural asset would be better in the hands of the State. Mr. Sidev objected to any privilego being withdrawn from men who had been in tho Army during the war, even if they had not gone to the front. Ho suggested that hardship had been caused in some cases by tho 8 per cent, limitation of rent, and that a modification might be desirable in the direction of increasing the rato of interest. Mr Fraser (Wellington Central) urged the need'for the extending of increased protection to tenants. Sir William Herries said that a separate Housing Bill would come down. Mr. Frnser roplicd that the House lacked an assurance that the Bill would oxtend the protective legislation, which was good- as far as it went. Tenants ought to be protected sirainst eviction under present conditions.

PENSIONS AND SUPERANNUATION

A proposal that retiring allowances mads by local bodies J -o old servants should not bo held to disqualify them from receiving old age pension benefits wis made to the Primo Minister in tho Hons*! of Representatives yesterday by Mr Luke. Ho pointed to the case of the' Wellington City Council, which ho said had given allowances to eomo i of its old servants who could not come into the superannuation, scheme. The minimum allowance so given was .£1 per week. These.allowances were taken into account in the assessment of the old age pension, and the rate of pension was reduced accordingly. He asked the Prime Minister to have the Old Age Pensions M amended during tho present- session in order to relievo those , old men of this somowhat oppressive reduction of said that there would bo iin amendment of the Pensions Bill this session, and ho would bo pleased to recommend to the Minister in chnrge of tho Department that ho look into the matter with a view of seeing whother anvthinß could bo do-je to ameliorate tho position of the persons concerned. two'petTtions Percival Cumming Elliott is petitioning Parliament for compensation for the loss of his hotel license at Apia, Samoa. Ho had leased the hotel at .CM per month before the no-liquor proclamation _ was issued. He represents that tho residential portion of the hotel is run at a loss, and that the profits from the bar trade would have been -C3MO a year. George Miller, of Wellington, who served on Gallipoli and tho West front with the New Zealand Force?, is petitioning Parliament for alleged wrongful conviction, degradation, and imprison ment. Ho states that lie was court-mar-tialled on a charge of conniving at the illegal disposal of SOS Army blankets, valued at .C2SI. He denies any connection with the sales, and snys it was admi! ted that ho had not received any of tho proceeds, but ho was found guilty, reduced to the ranks, and sentenced to ninety days' imprisonment and loss of ninety days' pay.

NEW BILLS

Several Bills were introduced in tho House of Representatives yesterday. They wore not important measures. Tho Land and Income Tax Assessment Bill is tho annual moasuro authorising tho collection of land and income lax. It makes no change in tho rates of taxation for the. current year. Tho Hospit.il and Charitable Aid Amendment Bill creates a now hospital district in South: Otago. Tho Te Aroha Borough Lenses Bill authorises the granting of tho freehold of town sections in Te. Aroha to tenants. The Nelson Harbour Amendment Bui makes n small adjustment in the finances of the Nelson Harbour Board. The Magistrate's Court Amendment Bill authorises the appointment of n magistrate in the Chatham Islands.