INCIDENCE OF TAXATION

Dominion, Volume 16, Issue 175, 12 April 1923, Page 6

INCIDENCE OF TAXATION

FARMERS & THE MORATORIUM ADVANTAGES IN SOUTH ISLAND FUTURE OF PRIMARY INDUSTRY (IV.) A business man, reluctantly drawn into the public discussion on the incidence of taxation, deplores the battle of opinions between opposing factions on the Taxation Commission, and offers some reflections on the effect on rural industry of the raising of the moratorium, and on the future of primary industry generally.

“I have read’with great interest the correspondence and articles appearing in The Dominion,” said a business man yesterday. “The Government has fully realised-the .necessity for'a reduction of taxation, and the Prime Minister s statement on the question has brought, satisfaction to everyone in commercial, industrial, and' rural circles. I am sorry that when they reduced the rate nf income tax on companies from Bs. 9d to 7s. 4d. in the £l, the Government did not take, the hull bv the Homs and reduce it? to the ss. figure now nrojocted. Be that as it may, we must”be thankful that Mr. Massey s estimate of the financial 'condition _ of the Dominion warrants him in making further reduction. What good, therefore, can be gained by the Tepresentatices of the majority and minority of the Taxation Committee in giving expression to views, on which we know that their minds have not undergone nnv change, and are not likely to? It looks to me like drawing attention to the plea of a certain section of the business community for favoured treatment at the hands of the Government of the country.”

LAND MORTGAGE UNPOPULAR The most important feature in the d’scussinn, he said, was the question nf raising of money on mortgage. Mr Hunt s'nid it was impossible; Mr Shirtcliffe said that money was stih available, provided there was a good security. The position was serious /enough for the landholder, for it was a fact that some large institutions hart been withdrawing money that they had Invested in land mortgages in the past A great many people who had money out on mortgage had been fcobng very nervous, as it had heen .difficult to collect the interest during the last two years: in fact in more cases than conic possiblv bo known, no interest had boon collected nt all. It wns very likolv that when the moratorium was lifted these neoplc would hesitate to invest in land, and lenders would bo scarce Anvono that was n trustee of moneys realised the difficulty in that regard. The only big lender on land in. N°w Zealand nt the present time was the Public Trustee.

MORTGAGES IN SOUTH ISLAND “Things are getting better with the farmer, nevertheless, and I know that the prudent farmer is not loaning on the moratorium, but has arranged his finances in other ways. In tho South. Island, for instance, there has been a remarkable recovery. Tho wheat grower’s position is not without anxiety, for ho does not know whether he will get 4s. or ss. per bushel. Evyn at the lower price, however, ho should ‘ malto a reasonable profit. The South Island has several advantages over the North, apart from the dairying industry. It has fine wools, there is more mixed farming possible there, and the fanners are not so dependent on cattle as iA the North Island. Down south, they have been fortunate in being able to- fatten their lambs this season, and cattle are becoming more of a by-pro-duct of the agriculturist’s operations. Tho difference between farming in the tv.’o islands is represented by tho difference between wheat at 4s. per bushel and wool at sd. or 6d. nor lb., which was tho position some little time. ago. Mith the North Island dairyman the trouble is that the price of dairy lands is up to the peak figure, and, even with all the good prices, there is little in it for him. If there is anything approaching a permanent fall in the price of dairv products, he will lx> hard.put to make things pay tho interest on these high-priced lands.

THE FUTURE OF THE FARMER Farmers were not by any means out of tho wood yet, added the business man consulted. The shrewd farmer lias arranged his mortgage ahead, so that the lifting.of the moratorium at, say, December, 1924, would not embarrass him unduly. It was astonishing how quickly tho position had improved for him. and farmers were fully warranted in looking to better times in the future, when taxation would he reduced and prices, as everyone hoped, would normalise at a payable figure. ,