REDUCING TAXES

Evening Post, Volume CIV, Issue 91, 14 October 1922, Page 11

REDUCING TAXES

PROPOSALS ENDORSED

IMPORTANT POINTS DISCUSSED

DIVISIONS ON LAND TAX CLAUSES

Tho Government's plans for reducing the land and income taxes were endorsed by the House of Representatives last night, when the

Land and Income Tax Bui was con

sidered in Committee. Some import-

ant points connected with the Do

minion's taxation were discussed

Mr. W. D. Lysnar again raisod the question of limiting the tax on Native land, and pressed his point that there should be no limit unless the Natives >vero prepared to grant relief to the present lessees of the lands.

The Prime Minister said he proposed to postpone consideration of the clause mentioned by Mr. Lysnar until the Hon. A. T. Ngata was present. Mr. W. T. Jennings (Waitomo) said that representations had been made to him from settlers in the King Country who desired that the clause in question should not be rushed through.

Discussing the proposed reduction in the supar land-tax, Mr. H. E. Holland (Buller) pointed out that the super-tax was imposed to meet wax expenses. The cost of the war had not yet been met, yet the Government now proposed to reduce the burden on landholders, and place it on other shoulders. Under the new proposal the big landed properties would alone receive any real benefit. The Prime Minister said that the reduction was intended to benefit the whole country. If the taxation of a country was reduced by £1,000,000 it followed that every person in the community ■would benefit. He denied that he: was legislating for any particular class. Taxpayers would be relieved to the extent of £10 per head. Mr. J. M'Combs (Lyttelton) stated that for the greater part the remissions ■would go into the pockets of a few very, .large landowners. If the Government desired to remit taxation it should do so through the Customs duties. That would he of Teal benefit to the people as a whole.

Mr. M. J. Savage (Auckland West)' asserted that the object aimed at was a deflation of the currency for a particular purpose.

"The Government is giving away unnecessarily a large amount of_ money when the country can't afford it," asserted Mr. R. M'Callum. The House should have before it a return showing the amount of money which would be lost to the country without giving material assistance to the taxpayer. Mr. R. A. Wright (Wellington Suburbs) refuted the Labour Party's argument that the land tax could not bepassed on. When rates were increased in the business areas in Wellington up went the rents. He inquired whether the Government could compel property owners* to reduce rents when taxation was reduced. TWO AMENDMENTS. "While professing to help the small man the Government is merely helping the big man," stated Mr. Holland. To overcome that anomaly he suggested that if the Government could spare £1,000,000 the sum should be expended' in erecting 10,000 -workers' homes. He moved an amendment to clause 2 to provide that the reduction should apply only in cases where the taxable balance of rural lands did not exceed £10,000.

On a division the amendment was defeated by 51 to 13. Mr. R. 'M'Callum moved ai further amendment excepting from the operation of the clause all properties exceeding £20,000 in valu«.

The amendment was defeated, the voting on this occasion being 42 to 21. As promised by the Prime Minister, consideration of clause 4 (limitation of tax on Native land) was postponed.

Mr. Holland said he proposed to divida the House on the questioa of remitting the super-tax on incomes. Mr. G. Mitchell (Wellington South) said he proposed to move an amendment : "Providing that in no case should the taxation on companies exceed 5s in the

The Chairman of Committees ruled that the amendment would have to be considered when the schedule of the Bill was before the House.

Mr. Holland called for a division on ilie clause, which was retained by 42 to 7.

FOREIGN INSURANCE BUSINESS.

On clause 12 (reducing the premium tax in respect of foreign*insurance companies from 10 to 5 per- cent.), Mr. T. K. Sidey (Ehinedin South) said it appeared to him to be extraordinary that the Prime Minister should show such consideration for foreign countries. The Prime Minister said that he was in favour of all insurance business being done in New Zealand, but the proposal was the result of a conference held in London with. Sir Francis Bell. The Commissioner of Taxes assured him that ths proposal was a farn one. There was a danger that unless the concession was made New Zealand would lose the whole of the business.

The Leader of the Opposition protested against the concession. The Prime Minister might fairly accept the suggestion to leave the matter as it stood. Local companies had their taxation reduced from 8s 9d in tha £1 to 7a 4d in the. £1, while foreign companies had their tax rediiced 50 per cent. Mr. D., Jones (Kaiapoi) draw attention to the fact that any concession granted the foreign countries would be reflected in a. reduetion'of insurance premiums. _ Contracts had been arranged, or were being arranged, in connection with New Zealand meat, the total value of ■which would be between £10,000,000 and £12,000,000, where contracts were already made the concession should not operate.

The grime Minister said that if New Zealand was not careful the big English importing firms would arrange their insurances in London. However, he would look into the matter further. The clause was not satisfactory to him and if the clause were carried he was prepared to reconsider it. When the Bill was in Committee again later he might be able to suggest something better. Mr._ W. D. Lysnar (Gisborne) stated that it was of great advantage to bring I/loyds and other big insurance companies into competition with the local concerns. It was in the interests of the producers that it should be so. Mr. Sidev said that he merely wanted to be sure thai local companies would not be placed at an undue disadvantage. The concession to foreign companies should not bo greater than that given to New Zealand companys. The clause was agreed to. When the final clause was considered the Prime Minister, in answer to Mr. Statham, said than an agreement in wiiting would have_ the -ame effect as a deed of partnership in compiling the tes_ payable by husband and wife, in. business as partners. The_ Leader of the. Opposition referred to Chinese firms who wero making large sums of money. He was convinced that the country was. losing a largo sum of money because of so-called Chinese partnerships.

The Prime Minister said he would look into the r>oint.

Consideration of the schedule was postponed and progress reported. All tha «kcaas ojoopt clause 4 ware adopted.