TAXATION SYSTEM

Evening Post, Volume CXXXVIII, Issue 55, 2 September 1944, Page 6

TAXATION SYSTEM

REVIEW URGED

REMOVAL OF ANOMALIES Taxation from many angles was discussed in the House of Representatives yesterday, when fthe second reading debate was taken on the Land and Income Tax (Annual) Bill. The Leader of the Opposition (Mr. Holland) urged a Royal Commission to study, the taxation question^ and deal with anomalies, but the Prime Minister (Mr. Fraser) held that a commission was unnecessary and that anomalies could be corrected from time to time. Discussing war expenditure, the Minister of Supply and Munitions (Mr. Sullivan) said he knew of nothing that^required to be hidden or obscured. ' There was nothing he knew of that the Government, or the War Cabinet, or anybody associated with the War ! Cabinet, need be ashamed to meet the House on in respect to public finances. He did not mean to say that some errors would not be found and mistakes made. Mr. W. A. Bodkin (National, Central Otago): That is why Parliament should see the accounts. The Leader of the Opposition:* All Iwe ask for is that the Government should bring the accounts out into the open. The Minister said he did not know why everything could not be openly discussed. It was possible that some accounts, for security reasons, might have to be dealt with in a less open way. "Before I commit myself I would like the opportunity, of considering it," he added. • The Prime Minister agreed that there were anomalies in the taxation system, but he could not see that a case had been made out for a Royal Commission investigation. It was better to have an overhaul from time to time and correct anomalies. EXCESS PROFITS TAX. The excess profits tax had served its purpose for the collection of war taxation, said Mr. G. H. Mackley (National, Masterton). He contended that the tax should be abolished in the interests of the development of industry. Taxation was too high on companies for tjie good of the community, because it was private industry that expanded the field of employment. Unlike the State, which could call upon the taxpayer for funds, private industry could only expand through the use of money at its own disposal. If industrialists were assured of at least half their profits their businesses would show great expansion. The country could not expect a review of" taxation until the war was over, said Mr. H. E. Combs (Government, Wellington Suburbs). As soon as hostilities finished and the need for taxation tapered off the people could look for a reduction. The first easement should be in respect to the national security tax, which was spread oyer the whole community. It fell heaviest on the shoulders of those e"arning the lowest incomes. That was the class of taxpayer that could least afford to contribute Is '6d in the' £ to that tax. PAY-AS-YOU-GO TAXATION. i Employers would* not welcome the pay-as-you-go system of taxation collection, as it was going to throw a big burden on them if they were going to have the duty of collecting the tax, said Mr. C. M. Bowden (National, Wellington West). However, he added that such a method might be a help to the State in collecting taxation,-, and might be some justification for the rectification of the fact that many people were ■getting away without paying the tax He trusted that the Minister of Finance (Mr. Nash) would be able to give the lie direct to a statement freely made throughout the country that in some places, down.on the West Coast coalfields, for instance, income tax demands were parcelled into a bundle and sent back to the Commissioner of Taxes. Mr. Bowden claimed that it was high ; time to revise the income tax laws of the Dominion. There were so many anomalies and injustices that the income tax Jaws were due to be rewritten. He felt that -the time had arrived for a Royal Commission, which he said had been promised in 1937 £>y the Government. JOB FOR SELECT COMMITTEE. Mr. Clyde Carr (Government, Timaru) expressed the view that there was no need to set up a Royal Commission to inquire into taxation Members of Parliament were elected to do a job, and paid for it, and they should do that job. It was a non-* party matter, or should be, and it seemed to him that a Select Committee of the House could very well deal with the subject. Such a committee could call on expert advice and could collate all the evidence. Mi-. W. S. Goosman (National, Waikato) said that it was quite impossible to make the checks on defence expenditure. He could assure the Minister of Supply that when aerodrome construction was being carried out in New Zealand he had assisted the Building Commissioner as an honorary inspector. He found there was no programme on the job,'and those doing it did not know from day to day what had to be done. There was only an authorisation, but no plans or specifications. Mr. Sullivan: The general programme received , approval from War Cabinet, and at some later date specific details and costs had to be submitted. Mr. Goosman replied that a job was done one day and undone the next. He would prove his point if the Minister would submit the matter to a committee of investigation. The debate was interrupted at 5.30 p.m., when the' Prime Minister moved the adjournment.