DEBENTURE TAX

Dominion, Volume 13, Issue 307, 21 September 1920, Page 4

DEBENTURE TAX

LOCAL BODIES PERTURBED

MUNICIPAL ASSOCIATION EXECUTIVE

TO MEET

A weefc ago in Parliamesi 2ij. J. P. Luke, M.P., said that the Government's proposed tax on "municipal debentures would bo a moat serious thing to all concerned, and he asked that the Government should hesitate before going on with it. The Prima Minister said that the mattor would ba gone into nnd an answer furnished later. Mr. Luke then aslccu wnetner, if municipal debenture* were to be taxed, the Government would consider amending the Ratine Act to make Government properties within &■ borough rateable. Mr. Mnsscy said that was quito another matter, and he would look into it.

"What the Government's object is in embarrassing bodies which aro only concerned with the well-being of tho public, I cannot conceive, unless Mr. Massey is taking such means of securing all tho money available for tho Government," said Mr. Luke yesterday. "Such action will, more than likely, act as a twoedged sword for if local bodies are prevented from raising money through a restrictive dobenture tax lor essential works, the progress of a placo will 1m ■ checked, and boroughs, like businesses, cannot stand still. If they remain stationary they are really drifting backwards, and the inevitable result will bo that the rateablo value of a city bereft | of money for progressiva works will i drop. Every local body is affected by the Government's drastic proposal, and all are beginning slowly to realiso the full force of the Government's taxation proposals." Yesterday morning the Mayor received the following telegram from th|i Mayor of Auckland (Mr. J. H. Gunson): "Finance Bill. Auckland City Council is much concerned about provision, for taxation of local body debentures, and I have propared a statement on tho question which I am posting you to-day. We are also communicating with the Municipal Association with ■ a view to your taking action. Auckland Harbour Board lias been advised that harbour board debentures will be exempt from provisions of Bill. I cannot understand this, as ferential treatment to harbour boards is entirely unjustified, and would further prejudice other local bodies. What aro 1 your views? What action do you proMr. Luko replied as follows:—"Thank9 for wire re Taxation Bill. Have made representations to tho Prime Minister urging that Bill should not apply to debentures of local bodies. Astonished the I'rimo Minister favours exemption of harbour boards, eome of which aro more in the nature of private trading concorns than undertakings carried out for the benefit of the people. Tho proposed tax will prejudice loans and increasa rate of interest approximately 1 per cent, if local bodies brought under taxation proposals. Have called meeting of Mumcipal Association executive tor Wednesday at 2 p.m. in Parliamentary Build ings. Shall be clad if you) can be present."