TAXING PROPOSALS

Evening Post, Volume CXII, Issue 35, 10 August 1936, Page 10

TAXING PROPOSALS

EFFECT ON INDUSTRY

"WRONG IN PRINCIPLE"

PROTEST EXPRESSED

At a special general meeting of! members of the Wellington Chamber of Commerce and representatives of other trade organisations today, a discussion on the proposals of the Government for a graduated land tax resulted in the following resolution being carried unanimously:—

That this meeting of Wellington merchants, manufacturers, traders, and others protests against the proposed application of a graduated land tax to urban lands when such lands are in full economic use, and that the Associated Chambers of Commerce of New Zealand be requested to bring the protest before the Government.

Speakers drew attention to the penal, effect of the proposed tax as it affected. urban properties, and it was asked whether it was the intention of the Government to disintegrate those trading concerns which had branches throughout different districts and the Dominion generally, and which would be severely hit by the increased land tax they would have to pay because of the aggregation of their various branch properties for the purpose, of the land tax. These concerns, it was stated, would not be able to do as much as they were doing today in employing labour, and would suffer a serious disadvantage as compared with a concern having only one office or one factory- It was remarked that while I the Government could point to the past for a precedent as regards graduI ated land tax, the position was that there was a great deal of second-class rural land which could be used to the full economically only in large areas, and that so far as urban properties was concerned there was certainly tio evil in regard to land aggregation, because all urban properties were being fully used economically.

INCREASES QUOTED.

Instances were quoted to the meeting of how land tax paid by specific business concerns would be increased. It was stated that one commercial concern in Wellington would have to pay a lax increased by over GOO per cent., and that whereas another company had paid £278, it would now have to pay £1670, an increase of well over 500 per cent. This latter company was one with a staff of over 300 employees, and one from which shareholders had had no dividends for many years. A company would now .have to pay increased land tax in addition to paying up to the maximum of 7s 6d for • the increased company taxation, which was approaching close to confiscation. A. company which still continued to make provision for allowances it was necessary, in soundness, to make, would have the greatest difficulty, in keeping going without increasing, prices, and thereby coming into conflict with Government policy as regards price rises. Another speaker said that the whole principle of the graduated land tax was wrong. When the tax went beyond what was a reasonable contribution to the cost of Government it became a tax not on profits but on property. Furthermore, it amounted to doubl6 taxation, because local bodies were already levying very heavily on all classes of land, both rural and urban. Industry could not stand these charges. It was proposed to raise an extra £841,000 by the graduated land tax, and from forty to fifty per cent, of this ■ would be paid on urban properties. There was not even the modification made in former years of an exemption of 5 per cent, of the unimproved value of the land used in the production of income. Together with these new impositions, said the speaker, were all the other increased costs which industry, commerce, and trade would have to bear as a result of recent policy measures by the Government, and these burdens were being imposed just at a time when business was beginning to .get on its feet after the depression. The result must be, he said, to check that progress and affect employment. A farming representative who was present said that rural and urban people were alike hit, and that the Government was undermining the prosperity of the whole Dominion by such extreme taxation. ■ Further discussion by the meeting on the effects of the proposed . tax centred on what was regarded as the injustice of aggregating for tax various branch business properties under one ownership. The resolution was then carried.