‘AN AMAZING PROPOSAL’

Dominion, Volume 22, Issue 263, 2 August 1929, Page 11

‘AN AMAZING PROPOSAL’

— ■» INCREASE IN PRIMAGE DUTIES STRENUOUS OPPOSITION INDICATED THE FARMER’S BURDEN After the Prime Minister had presented the Budget to the House of Representatives last night, the motion relating to the increase of primage duties from one to two per cent., as proposed by Sir Joseph Ward, and to take “fleet from August 1, was put to the House. The Hon. W. D. Stewart (Dunedin West) asked what the increased duty was estimated to produce. The Prime Minister replied that as near as it was possible to say, between £200,000 and £300,000 additional revenue.

Mr. Stewart said that as the matter was a very important one, it was unfortunate that it was impossible to debate the merits of the proposal that night. No doubt, he said, the House would have an opportunity when the Budget was under discussion, as he recognised that all Customs dutie. must operate without any warning being given to the public. His concern, however, was that for some years past the public had been urging that th Customs duties be reduced or abolished. The difference between one and two per cent, might not be so very much in respect to goods, which the ordinary merchants passed on to the public, but the increase represented something substantial to the importer of goods. “I do not know whether it is in order to ask the Prime Minister the question,” he proceeded, “but I did not gather where there was anything indicated in the Budget relating to his statement that he is debarred from going to the London market for loans for two years. I thought that would have been indicated, but I have not been able to find it.” He said a very direct statement had been made that he committed the Prime Minister to his present position by creating an embargo preventing the Prime Minister from going to the London market for the period mentioned. That statement was causing a great deal of discussion, and Mr. Stewart had expected that the Prime Minister would have said something more concerning it.”

The matter referred to by the hon. member I will take the opportunity of dealing with in the House during the course of the financial debate as far as 1 can, said the Prime Minister in reply. He added that the discussion on the Budget would continue for a fortnight at least.

Mr. H. E. Holland (Buller) said it was absolutely a wrong principle to increase the primage duty by one hundred per cent.

Reform members : Hear,- hear. Mr. Holland: “The Reform members say hear, hear.’ It is a principle they stood tor very considerably while in office. (Labour laughter). He said that the increased duty was not for the purpose of conserving any primary or secondary interests, but was purely a tax tor the purpose of revenue. When it was imposed for that purpose, it meant a reduction in the wages of the people of the country, and a reduction in the purchasnig power of those on smaller incomes. It the Prime Minister derived £200,000 trom the tax, by the time it reached the consumers of the country it would mean a rn 00 ’ 00 9 at the vcr y least. All the experiences of the country pointed to that. The principle was regarded by the Labour Party as wholly objectionable. Direct taxation for the purposes of revenue was far bettor. The Prime Minister: I want to point out to the hon. member that that is what this tax is for. A Reform voice: To get more money. The Prime Minister: There is a deficit in the revenue of £900,000 to be met to enable us to balance at the end of the year. Now, I want to know in what other direction I can get £900,000? My object in putting one per cent, duty is because at the end of the coming year we will be in a position to do without it, and it is the easiest thing in the world to remove it. One per cent, primage duty cannot be passed on to the consumer, so the hon. member will see it is not a duty which will deprive people of their wages. Mr. Holland: How will it not pass on to the consumer? The Prime Minister: Because it is not large enough to collect. (Laughter.) It is opr rst duty to balance the revenue and expenditure. This is not a permanent tax, but to restore the revenue for this year. Mr. Holland: How much do you expect to get from the increase in direct taxation? The Prime Minister: We have no direct taxation. You mean Use land tax. I do not know. It is a very difficult matter to estimate. A Reform member: It will be for the farmer. The Prime Minister said the taxation proposed did not touch the ordinary farmer at all. A Reform member: That is not so. The Prime Minister.: What is the use of the hon. member telling me that? I have been cheeking over the figures for weeks. There are forty thousand people in this country who do not come under taxation at all. It is only the large landowner who is going to be touched, and'he has been escaping in the past. Mr. D. Jones (Mid-Canterbury) : The £5OOO man is going to kill it. The Prime Minister: It is not going to touch him at all. The large landowner has been escaping unfairly, ever since a short time after the war. It was done witli a view to extracting a fair-amount from the large landholder. Mr. Jones: And leaving the big city man free. ’file Prune Minister: The big city man pnvs land and income-tax as well. (United hear hears.) Mr. J. A. Nash (Palmerston North) : It will drive a good few men out of the country. The Prime Minister: We want the money. Ho said he hoped soon to have the whole of the information, farmers had not been returning income-tax for some years. It was difficult to get a careful approximate estimate. As soon as he obtained the information he would be only too glad to give it to the House. “Extreme Consternation.” Mr. A. Harris (Waitemata) said the United Party had promised the country that there would be no additional taxation. Extreme consternation would be expressed throughout New Zealand at the Prime Minister's proposals.. Mr. P. Fraser (Wellington Central) said the Prime Minister was in a difficult position, and was entitled to some consideration. (Reform laughter). He regretted that Sir Joseph did not tax for the full amount required. “I, hope lie will drop the indirect taxation,” said Mr. Fraser, “and go right after the principle that everybody who earns a substantial income should pay according to his ability to pay.” (Labour hear, hears). Mr. W. D. Lysnar (Cisborne) said he took no exception to the one per cent, taxation. Revenue hud to be _ found somewhere, but it should be obtained in an equitable way. He contended that the Prime .Minister had quoted figures which he did not understand. The Government had promised not to increase taxation, but all “those in the know” knew that that promise could not be fulfilled. The Prime Minister: We did not know what the deficit was.

Mr. Lysnnr: It was all platform propaganda. Mr. W. E. Parry (Auckland Central) : Were you in the know. (Laughter). Mr. Lysnnr: I will assist the Government to'try and find a most equitable system of taxation. Expressing the opinion that the House

would have an opportunity later on to discuss the Budget, the Leader of the Opposition (Right Hon. J. G. Coates) suggested that the resolution before the House should be allowed to pass. Mr. C. 11. Chapman (Wellington North) expressed opposition to the imposition of a primage duty. Mr. W. J. Bolson (Stratford) said he sympathised with the Prime Minister in the position in which he was placed. He thought that the Government's proposals were fair and reasonable under the circumstances. The primage duty was. after all, a revenue tax. Mr. A. M. Samuel (Thames) : You will be sorry in the morning. (Laughter.) Mr. Polson: “I am not going to allow the Opposition to worry me.” The country could not reasonably object to the primage duty, he added. A Labour member: What does Professor Murphy think about it? (Loud laughter.) Mr. Polson: I hear frequent references to a Mr. Murphy. I imagine he is Irish, and consequently has many friends nmoijg the Labour Party. Colonel T. W. McDonald (Wairarapa) said that the tax was too small to be passed on. The money had to be found; there was no way out. "Raid the Fanner.” Mr. D. Jones (Mid-Canterbury) said he was convinced that the policy of the Government was to raid the farmer. He was amazed that Mr. Polson, who was president of the Farmers’ Union, agreed to putting £lOO,OOO on to the cities and £BOO 00 on to the farmers. Mr. Polson: I did not say anything of the sort. Mr. Jones: No other meaning can be taken out of your words. A United member: A grave misrepresentation I Mr. Jones said that the Prime Minister's proposals were most amazing. “I never heard such a piece of misrepresentation,” said the Prime Minister in replying to Mr. Jones. “He says that it is proposed to make the farmers carry £BOO,OOO ” Mr. Jones: Yes. The Prime Minister: I pointed out that a farmer will not have to make up an income tax return if his property is valued at £12.500. unimproved value. A Reform member: Land tax? The Prime Minister: No. lam referring to income tax. (Reform laughter. ) Mr. A. M. Samuel (Thames) said when tlie people who voted for the United Party woke up in the morning and read in tlie paper a report of what the Government proposed there would be an expression cn their faces that would provide a wonderful opportunity for 'a cartoonist. A United Member: Rot. Mr. Samuel : In my opinion you will get all you want later on. Those members of the United Party who do not get up and oppose the measure by word of mouth are misrepresenting their constiuencies. Mr. C. A. Wilkinson (Egmont) said he could not support «the Government, and he must rote against the resolution. Mr. J. T. Hogan (Rangitikei) considered members were making too much fuss over tlie taxation proposed by the Prime Minister for a period of months. The time was not one for a party wrangle about proposals to ensure against loss of revenue. He thought the question of a heavier duty on American goods should be considered. “Although the former Government taxed the working-man's shirt, the present Government is going to tax his singlet.” said the Rev. C. L. Carr (Tintaru). He said that had the proposals been more discriminate they would have been in another category. “I rise to support the Leader of the Opposition." said Mr. D. McDougall (Mataura) to Reform applause. "We have acted the giddy devil long enough. (Laughter.) Let us close the debate and get home to our respective places of abode.” (Laughter.) The resolution was carried on the voices.