TO MEET THE COST

Evening Post, Volume XCI, Issue 143, 17 June 1916, Page 9

TO MEET THE COST

NEW TAXATION PROPOSAL*..

In reference to the taxation proposals, Sir Joseph Ward said:—"l propose to effect some important changes in taxation. The ordinary land tax on mortgages will be repealed, and an income tax submitted on the income derived from the mortgages. This change, -while giving relief to the owners of small sums invested on mortgage, will impose a heavier tax on income of those having large investments. I will ask the House to make provision for exempting from assessment of income tax in New Zealand any income earned elsewhere and which lias already been taxed in the United Kingdom or any British dominion, with a view of avoiding as far as'we can the duplicate taxation of income within the Empire. There is no room to'doubt that the present system is unjust, and acts as a constant barrier to the full and free development of commerce within the British Empire."

Dealing with the question of money invested in liquid securities, the Minister said:—"l am convinced that it is a wise course to keep the year's surplus in a liquid form, and I "decided some months ago not to use the surplus for ordinary governmental requirements, but to invest it in liquid securities, and part of this £2,000,000 has since the close of the financial year been invested in Imperial Treasury bilk, and the remainder will be similarly invested at an early date. I have from the first recognised (that it is our duty to aid the Motherland during this great war to our utmost capacity. I had previously invested a. sum of £1,325,000 in Imperial Treasury' bills, and with this further £2,000,000 a total of £3,325,000 will be provided as a reserve. I think this investment in Imperial Treasury bills may be regarded as a : partial sot-off by .New Zealand against the war funds so generously advanced by the Motherland. I hope during the current year to further increase this reserve. TAXING WAR. PROFITS. " Money for the conduct of the war must be had, and there is no valid reason why those who have surplus moneys, largely due- to war conditions, should not be called upon to provide a portion of the capital required. Those who have ma^e extra profits during the war, either from business or directly from primary products, cannot object to provide out of such profits1 a share of the finance necessary. I will ask the House to give authority to take by way of taxation 45 per cent, of the excess profits earned during the last year. These will.be ascertained by taking the average profits realised for each of the three years previous to the war and comparing this average with the returns made since the war commenced. I estimate to receive £2,000,000 from this source. The date, of payment will probably be about the end of the current financial year.

SPECIAL INCOME-TAX.

" Those taxpayers who derive their incomes from other sources than war profits should likewise at this juncture be required to contribute something further than they are at present called upon to pay, a.nd I propose to ask for authority to levy 'a, 'special tax of .5 per cent, upon incomes earned last year from all sources, exclusive of war profits, which have already been dealt with. This tax will be collected in March next. I calculate that £750,000 will be realised under this heading.

INCOME-TAX 'MINIMUM,

." I direct attention to the minimum upon which income-tax is charged in _ this Dominion. So far as I can ascertain, the amount at which we start to levy income-tax is the highest in the world —by that I mean we exclude from the payment of any tax all those who receive wages or salaries not exceeding £300 per annum. Nothing is proposed in the direction of increasing the incometax revenue by reducing the minimum upon which income-tax is leviable, but it will become a question for serious consideration if the war continues beyond the end of next year whether this should not be done. It is only right that those 'who are -well-to-do or possessors of -wealth should contribute the greater- proportion of the cost of this war, the successful winning of which means such enormous advantages to them as well as -to every other section of the community. Even the humblest in the land would'probably take exception to being altogether preluded under the law from making some slight contribution towards helping to win the war and towards- assisting to maintain a. pensions scheme for the benefit of the widows and dependents of those who are, on behalf of every class, great or small, throughout the Dominion, fighting for the freedom of this country. WAR BONDS. " I will also ask the House to provide for a system of war bonds to be.issued in New Zealand, with a currency of twenty-five years, bearing interest at 4i per cent, free of income-tax.' This will enable those desirous, of helping war finance to do so. The financial requirements during the year will be obtained partly from the Old Country and partly from New Zealand, and will, of course., be limited to the Dominion's needs. . MONEY IN DOMINION. "It is, in my. opinion, the duty of those who own or control money made in_ this country to utilise it in the Dominion as much as possible during the currency of the war, in order to help to maintain the stability of the trade and commerce of the country. I propose to ask the House for authority to ensure ithat this will be done until twelve months_ after peace has been declared. This will also apply to deposits in banking or other institutions in so far as they represent money in New Zealand, but will not affect remittances for legitimate trade or other purposes. Authority will be asked to have suitable provision made, by regulations to enable this proposal to be carried out."