LABOUR'S PROTEST

Evening Post, Volume CXII, Issue 91, 14 October 1931, Page 10

LABOUR'S PROTEST

QUESTION OF PRINCIPLE

THE HAN ON THE LAND

The Land and Income Tax (Annual) Bill and tbo Land and Income Tax Amendment Bill, giving effect to the Government's taxation proposals, apart from those affecting the Customs tariff, were introduced in tho Ho iso of Representatives last night by Governor-Gen-eral's Message. Broadly, they are on. the lines already outlined. The Laud aiid Ineomo Tax (Annual) Bill makes it clear that tho special flat rate tax of 4d in tho £, indicated by the Hon. W. Downio Stewart in the Supplementary Budget is to be_ levied on assessable income in excess of £500. In tho assessment of individuals' income there is to bo deducted by way of special exemption the sum of £260, diminished at the rate of £1 for every £3 of income between £2UO and £SGU, and further diminished at tho rate of £1 for every 30s of income between £500 and £.800. For the purpose of computing the amount of any special exemption or tho rate of tax payable by a taxpayer, there are to be taken into account (1) income derived from Government securities, subject to the condition that income derived therefrom shall be exempt from income tax; (2) income derived from debentures issued by companies on terms providing for the payment of ineomo tax by such companies-; and (3) dividends or other profits derived from shares or other rights of membership in companies. An amendment is made in tho provision in the principal Act relating to tho assessment of gold-mining and schcclite mining companies. The taxablo income derived by such companies is to be deemed to be half tho total sum paid as dividends during tho year if the aggregate dividends paid since the commencement of operations does not exceed twice the paid-up capital. In every othor case- the taxable income is to bo deemed to be the total sum paid as dividends during the year. There is a special provision extending the timo for tho payment of tax in cases of hardship arising out of the Hawkes Bay earthquake for a period uot exceeding two years after the due dato of the tax. A TREMENDOUS CONCESSION. When tho Bills were introduced, Mr. P. Fraser (Labour, Wellington Central) asked if the Minister of Finance had not thought better of some of tho provisions of tho Budget. .For instance, there was tho question of the abolition of tho graduated land tax. Mr. Fraser suggested that the Governmont might, give more consideration to this matter, especially in view of the Master's previous pronouncements on the subject. A tremendous concession was being mado to the wealthy landowners of the Dominion. "I am quite prepared to believe," said Mr. Fraser, "that the Minister adopted theso proposals against his own judgment. Tho Leader of tho Opposition quoted a statement mado by the Minister three years ago in which he stood four-square against any alteration in the land tax. We are asking the Minister to get back to where he was in 1928." A POINT TO CONSIDER. The Minister said that the whole matter would be debated when the annual Bill came on for its second reading. "When the member for Wellington Central talks about throwing away hundreds of thousands of pounds," said Mr. Stewart, "I would ask him to consider whether ho is actually throwing away that amount. Ho should remember that a very large proportion of the sum he mentions will not be recoverable this year at all. However, that is not tho question which concerns mo at present. The question is what is fair and equitable in the way of taxation. 1 would have thought that tho Labour Party, above all parties, would have said that the just, right, and proper method of taxation was to tax those who have the income to tax. Surely there can't bo any justice in taxing a man who has made a loss on the year's working and has to mortgage his property in order to meet his payments. The whole problem of land taxation opens up a very big problem. The Labour Party, I understood, has always been in favour of the income tax, but on two occasions when I have applied the income tax with the utmost rigour, I have received no assistance or commendation from the Labour Party. In 1927 when I applied extra taxation the Labour Party joined hands with the Taxpayers' Federation, the Welfare League, and all the most Tory organisations in the world in denouncing what I had done. I would have thought that tho Labour Party would have supported mo on that occasion. During tho whole of the debato on tho Supplementary Budget the matter has been looked at from a political point of view. . . The Labour Party's policy on taxation questions has always been one of opportunity. They havo supported the things that havo been popular." LABOUR'S ATTITUDE. Mr. J. M' Combs (Labour, Lyttclton) said ho was very surprised at the speech which had been delivered by the Minister of Finance. "It would have been worthy of the Mini-ter of Mines (Mr. Jones)," declared Mr. M'Combs, "for from beginning to end it was an. attempt to grossly misrepresent the Labour Party and to grossly misrepresent the facts in regard to taxation. Tho Labour Party has objected to increases in the taxation imposed on lower incomes. Tho Labour Party has objected to the taxation on workers' wages. Mon who are earning 30s a week are being taxed 3d in the £~ and now it it proposed to put another 2d in the £ on to them." Under tho taxing proposals of tho Government it was proposed to relieve 88 individuals of £78,000 per annum, whilo another six individuals were to receive a remission of £14,722 per annum. Tho Government that was proposing to make those remissions was proposing to place another burden on the working people by way of an increased wage tax. "They talk about equity of taxation," said Mr. M' Combs, who went on to say that they had had the graduated land tax on tho Statute Book in New Zealand for 40 years. WHAT OF LIBERALISM? The Prime Minister (tho Eight Hon. G. W. Forbes) said tho member for Lyttelton knew as well as anyone else in the House that no class of the community had been harder hit than the large landowner. There waß not one man who had not made a direct loss. It had been said that the graduated land tax had boon introduced by John Ballance and that it was a Liberal measure. Mr. M'Combs: "Massey wouldn't repeal it." Mr. Forbes: "What is a Liberal, after all1?" Labour members: "Hear, hear. That is what we want to know." Mr. Forbes: "Wo havo to remember that the world has moved since those days." Mr. M'Combs: "But you havo moved backwards." Mr. Forbes: "Are we to say that becnuso a thing has been in operation for forty years nothing should be done with it'? Surely wo must examine things and -see whether they havn outlive!

their usefulness. The member for Lyttelton is one of. the most rigid Conservatives that I know." Mr. M'Combs: "What did the Minister of Finance say three years ago?" Mr. I'orbcs: "I don't earo what I aaid last year." Labour members: "Hear, hoar. Or yesterday, either." Mr. Forbes: "If Ihe Labour Party had its way this country would bo bankrupt in sis months." Labour members: "You are woll bankrupt now." The Prime Minister said it had to be admitted that tho landowners of the Dominion had been very hard hit and wero going back every day. A CONUNDBUM. Mr. Fraser said he would like to appeal to tho Prime Minister for a little mercy, "110 asks us a conundrum: What is a Liberal?" said Mr. Frascr. "He might ask: What is not a Liberal, and tho answer' would bo: The Prime Minister. The Bight Hon. gentleman abandoned the name of Liberal long ago. First of all, he was a LiberalLabour, then a Nationalist, then a United. Goodness knows what he calls himself to-duy. Is he a Iloi'orni-United, a United-Reform, a Nationalist-Eeform, or what is he1?" Colonel T. W. M'Donald (government, Wairarapa): "A uniform." (Loud laughter.) Mr. Frascr: "The Labour Parly docs not say a principle is good or bad because it is forty years old." Mr. Stewart: "That is all you have been saying this afternoon." Mr. Fraser: "It is not a question of forty years, but of one year —of four months. Who would have thought four months ago that the Primo Minister would have stood up in this Chamber avd pleaded tho ease of those .who hold the large areas in this land?" Labour members: "You don't know him." Mr. Fraser: "The Prime Minister knows very well that the tax we are discussing to-night was put on for the purpose of furthering land settlement. However, I want to refute the suggestion that the Labour Party has opposed direct taxation." Mr. Stewart: "In 1927." Mr. Fraser: "The principle of it?" Mr. Stewart: "Yes." Mr. Fraser: "I give that a denial straight away." So far as ho was concerned personally he stood for the income tax as tho best method of tax.ation. NOT EQUITABLE. Tho Minister of Finance quoted figures with the object of showing that many of those who had paid land tax last year had shown an actual loss on the year's working. Those figures showed that the tax was not equitable. Tho Minister of Agriculture (tho Hon. D. Jones) said that what had been discussed that night had been largely political. The Labour Party might think that its arguments would go down with the country, but it must admit that tho land tax was inequitable. Mr. Fraser said he would be prepared to discuss the wrongs and rights of the matter if tho Government would first inako provision for the thousands of workers who had no opportunity of putting anything aside for bad times and were in danger of being thrown ou'.; into the streets because they could uoi pay their rents. Mr. 'W. Nash (Labour, Hutt) said that the Customs taxation had increased each year since 1922, and at the same time direct taxation had decreased. BAD POLICY. Mr. C. E. Macmillan (Government, Tauranga) said that tho Opposition had not grasped tho fact that it was an exceedingly bad policy to make a man borrow in order to pay his taxation. The Labour Party practically suggested that it was a good thing to take £.320,000 out of industry for Government revenue. Tho Minister of Finance's proposals were as much in tho interests of the workers as of any other section of the community. Mr. M. J. Savage (Labour, Auckland West) said that tho object of the graduated land tax in the first place was to prevent land aggregation, and now there was the appearanco of large estates being broken up the Government was coming to their assistance. In seven years tho taxable balance of incomes increased by £11,000,000, and yet during that timo income tax was decreased. During that period the Government should have built up its nestegg. Mr. F. Langstone (Labour, Waimarino) said that many people had dissipated tho wealth which they had paid in taxation. During the years of high incomes and land taxation speculation was rife. Mr. W. E. Barnard (Labour, Napier) said that in Hawkes Bay the tendency had been towards aggregation, despite tho graduated land tax. Both Bills were read the first time.