THE ANNUAL BILL

Evening Post, Volume C, Issue 60, 8 September 1920, Page 7

THE ANNUAL BILL

GENERAL DEBATE FOLLOWS.

Thst was no*, fcha last heard of taxation for the night, for the next business proceeded with was the second reading of the annual Land and. Income-tax Bill. This merely provides the machinery £w the ordinary collection of taxation, but though members had already had two discussions of this Bill they in-aist-d on having » third debits on the second reading. A diversion was created by an amendment moved by W. A. Veifccb (Wiineanni). 'Mi. Veitch moved us a.n amendment : "That ths Bill b« relerreci buk to the

Government with a recommendation that this House desires legislation this session that will provide for a readjustment of j taxation on the following lines :—(a) A j substantial reduction of Customs duties on the necessaries of life in common use in the homes of the poorer people in order to relieve the ever-increasing burden of the cost of living on people with large families and small incomes; (b) a substantial increase in the higher gradationsof land taxation to ensure the subdivision of larger estates at reasonable prices; (c) a substantial increase in the higher grades of income tax and death duties to produce more revenue from those at present able to pay it." My. Veitch contended that the seven and a-half millions proposed for soldiers' land settlement would nol be-sufficient under the present system. He could not see that a compulsory loan was- equitable while the man who had land was allowed to escape without compulsory acquisition. The Prime Minister already proposed higher taxation on the higher gradations of income tax and death duties for next year, and there was no reason why it should not be brought into effect this year. The Prime Minister would say it was too late, "but they had been in session since June, and there had been time to give effect to the proposals. Mr. S. G. Smith (Taranaki) seconded the amendment, and contended that the Prime Minister had not given effect to his pre-election promise for an immediate and thorough reform of taxation. Instead of that the proposals put forward were increasing the cost of living on the poorer classes. The Prime: Minister : "In what way?" Mr. Smith : "The railway increases." The Prime Minister : "Are you opposed to them?" Mr. Smith contended that the cost' of the salaries and wages should have been collected in another way. THE ONLY WAY. The Prime Minister said that it was impossible to give effect to the amendment. The cost of railway increases could not possibly have been met in any other way than by increases of fares 1 and freights. In the railway schedule the poorer classes had been specially looked after. There was no country in the world where the people with small incomes escaped with lower taxation than in New Zealand. Mr. Veitch had objected to the compulsory loan clause. That was a new thing for him. A member: "He must have some money." Mr. Veitch: "I want compulsory acquisition of land." The Prime Minister said the majority of the people were quite satisfied to lend money to the Government at 4£ per cent. ' There had been no increase in Customs duties on ' the necessaries of life except for the duty on tea. The Customs revenue was increasing because more goods were coming out, and because, the cost of these goods' was higher. If the present state of things went on, and they continued to get high prices for produce, he could promise a reduction' of taxation next year. He would like to take off the primage duty, and the duty on tea. The Government had always acted on the principle of fitting the burden of taxation to the ability to bear it, but they could not revise Customs duties in less than six months. As to death duties, the Committee wa-s meeting the following morning to consider proposals for an increase. / Mi-. Veitch: "For next year." The Prime Minister: "It is my opinion that we shall need it more next year than at present." It«fras a bad thing, he added, to rely for revenue on people dying. It was impossible to reduce the Customs duties by half. He was not exactly a Protectionist, but they could not allow their industries to be subjected to a sudden removal of protection. Reports he received from Britain showed that production was greater' than in 1914, but while they had the coal difficulty the cost of goods would continue to be high. KEMISSION OF DUTY. Mr. J. M'Combs (Lyttelton) contended that the Government-could by remitting duties easily do what was desired in reducing Customs taxation. In.the Budget revenue was under-estimated. Returns for the four months of the yea-r which had gone showed that there was already a surplus of £300,000 greater than was expected for the whole year. Mr. D. Jones (Kaiapoi) said that the land taxation proposed would be. prohibitive on some of. the larger estates, and it was only fair that the owners should be given some time to unload. At present they had. lOjd on the larger estates, and the extra taxation would bring that up to Is in the £, which meant that the State took the whole economic rent of the.land. • Mr. W. D. Lysnar (Gisborne) said he would vote against the amendment. He agreed with St. Veitch, but was of opinion that'his suggestion could not be put into effect this session. Mr. W: D. Stewart (Dunedin West) supported the view that it was impossible for the Government to bring into effect changes this session. Mr. G. Mitchell (Wellington South) argued that the war-created profits should be used to pay the war debt. He argued that the duty should be removed off woollen goods. He did not agree with the debt being handed on- to posterity. Mr. J. P, Luke (Wellington North) said that Britain had certainly paid £5 per head off its war debt, but Britain had not the development expenses that New Zealand had to meet. Britain, for example, had only 10s per head to pay for education, as against our £2 odd, and did not contribute to the same extent for hospital and charitable aid expenses. He suggested that the Government should set tip a Committee to review the Customs tariff. LEADER OF THE OPPOSITION. Mr.-T. M. Wilford (Leader of the Opposition) did not agree with the proposal that a Parliamentary Committee should be set up to suggest what items, on which Customs were collected, should be reduced. The idea growing that Committees of the House should find policies for the Government. There had been the Defence Committee, which had to find a defence policy; the Finance Committee to frame a finance policy The Prime Minister : "We submitted our proposals to the Finance Committee." Mr. Wilford continued that there was also the Committee to go into the matter of the Armour Trust, and the Committee to decide upon the price of butter. Mr. Massey : "That committee is to take evidence." Mr. Wilford : "It is the same thing. It will suggest a policy." The fact existed that committees were set up by the Government from all sides of the House on all these matters, and their proposals became the Government's policy. The Prime Minister then was able to say to the House, if it disagreed, "You can't blame me! I set up a committee from both sides of the House." Mr. Wilford 'asked Mr Massey to bring down legislation to impose • higher death duties, a higher graduated land tax on largo holdings, and to deal similarly with higher incomes. The legislation need not com© into operation until, eny, < ,1922, but by placing it on the Statute-book the Prime Minister would give an earnest of his intention. Mr. Wilford particularly desired a genuine attempt to deal with large landholdings. The Pin all farmer, on the other hand, should bo assisted. )lr. H. E. Holland (Ruliei) questionr<\ if tlio wur loans would be paid off in '!0 years, as had been predicted. He objected te the men, who had fousht hay- '

ing to return from the war and help to |)iiy the interest on the purchase of the properties which they went away to secure to the owners. He suggested that a levy should be placed on the increased wealth resulting from the war, and on the accrued unimproved value of land. . THE AMENDMENT LOST. The amendment was lost by 32 votes tt 16, and the second reading was carried. Mr. Massey intimated that it was important the Bill should pass all stages, and this was accordingly agreed to, and the Bill was read a third time and passed. The House adjourned at 12.30 a.m.