DEFENCE OF THE PROPERTY TAX.

Evening Star, Issue 7827, 7 February 1889, Page 4

DEFENCE OF THE PROPERTY TAX.

The Premier, Sir Hairy Atkinson, addressed a meeting of the eiti/.ens of Auckland last evening in the City Hall on the property tax and its substitute, a land tax and an income tax. Mr G. H. Upton occupied the chair, in the absence of the mayor through illness. There was a largo attendance, and among those on the platform worn Sir Frederick Whitaker, Hon. E. Mitchelson, Minister of Public Works, Sir \V. Fox, and a number of members of flic Legislature and representative citizens. On Sir Harry Atkinson's appearance he was received with cheers.

Sir H. Atkinson said he thanked the audience for their attendance and the cordial reception given to him. He knew there was diesatisl'action in Auckland at tin: property tax, and he had come to remove it, and to give reasons for it as a Mir and ..(jrilabh: tax, and take counsel with them, and hear their reasons against it. He took it for granted that the L-180,000 now raised by the property tax would still have to be raised in some way or other, notwithstanding all the retrenchment that had bum made. It was to be regretted, and he regretted, that so large an amount of to xation had to be borne by the people. No tax, he found, was agreeable, and all that could lie done was to adopt the least disagreeable tax. He thonght he had got it in the property tax, believing in meeting the increased liabilities by direct taxation. At first he looked at the income tax, but found it so harassing, uncertain, and difficult of collection that ho put it aside at once. He then looked at direct taxation as in America, and it was his investigations into it which led him to propose tho property tax. The property tax was only levied above tho "xenption and on that property in every i form wlii'di the taxpayer would leave behind him at death, and then taxed by the State. | The income tax, on the contrary, demanded .a Mice of the means of tho man every year, ami without regard to his requirements. They could judge which was the best method. But the advocates of the income fcix proposed to supplement it by a land tax. Did they mean to tax the farmers of the colony on the unimproved value of their land, and then tax their income from it. Ke wanted to be clear about that. Speaking for himself, ho would at once state that he would be no party to a land tax alone. He would not be a party to ruining the agricultural interests of the colony, for he looked forward to the time when the State would hold the land. If the farmers were handicapped by a land tax they would be unable to compete in the markets of the world with nations which had no land tax. They were demanding—their newspapers were demanding that the Government should settle the people on the land, and in the .varnc breath they told the intending tettler if he dared to invest his capital in land they would specially tax him, but if he put the money in trade he could go scot free. In South Australia they had a land and income tax, but the fanner who paid the land tax was entitled to deduct the income tax derivable from it, and that was fair. In a few years in this colony they would have wealthy men among them spending their thousauds in pictures and articles of luxury, and under an income and land tax all such property would escape scot free, whereas he thought it should bear taxation like any other form of property. The speaker here gave a scries of illustrative cases to show how the property tax and income tax on English lines would operate respectively, as the land tax was comprised in the property tax, and every landholder through that tax paid Id iu the £ on unimproved iands. He had taken out 148 names of persons who paid property tax, forty-eight being the largest payers of the tax in the colony. They paid L 42.000. He had the estates of these people carefully estimated by the Property Tax Department, and a land tax of fid in the £ would only be L 17.000, or not half their present contribution. It would require a rate of lCd in tho i £ to raise their present contribution. He i wanted to ask them what would be the | effect outside tho colony if it became known that they were putting on a rate j 10d in the £. When these people j put in their return he ventured to > OT.y they would return nothing like the I .'.mount, and the Court would not be able ! to make them. It was said the property tax ! drove capital out of the colony. His answer I was that there was plenty of capital in the ; colony—more than the colony had ever had, | in fact—whenever good security was forth- , coming. The outcry arose simply from thoso j who had given a high property tax valua- ! tion in order to borrow more monev on their ' property. They had borrowed it and were j unable to get rid of their present mortgages •' and take advantage of the existing cheap ' rates of money. He would now look at the supposed operation of the property tax on ' unproductive property, which was a sore I point in Auckland. He was sorry to sec an many empty houses as he had seen that day ; but still he held that men did not pay tho tax upon unproductive property, for the Government assessor had to accept the owner's valuation, or tho Government had to take the property over with 10 per cent, added. Some people evidently did not know the provisions of the law, and thus some grievous eases of hardship had arisen which need not have occurred. Tho ' Financial News ' and other journals representing capital in London deprecated New Zealand taxing capital coming into the colony. His view was that capital should bear its burdens in proportion to the benefit it secured from the State. The Government would not allow English capitalists to dictate how they should tax capital. The property tax was, he admitted, in some cases hard upon capital when first it came into the colony, according

to whether it arrived shortly before the assessment was made or later on. It was also hard upon widows whose incomes were derived from money out at low rates of interest, and certainly took a large slice; and with regard to that matter, and also with regard to implements used in the agricultural industry, some alteration might be made by Parliament. As to the objection that was made that the property tax was a tax on thrift, while the improvident escaped, he maintained that it was not so, as the thriftless man in various ways was taxed on his wasteful expenditure, and paid far more than those who were provident. Had they thought of the effect of an income tax on the colonial finances ? The ofliecrs of the Property Tax Department and himself had worked out the figures. A sixpenny income tax on the people who raised their incomes from property would be LBO,OOO, aud a threepenny income tax from people who earned their income by their own labor was L 20.000. Only LIOO.OOO in all! If tbey raised the first class to Is Gd in the £ and the workers to 9d in the £, the amount raised would still be L 30,000 short of the amount required to enable the colony to make both ends meet. Sir Julius Vogel had promised before he went into power to abolish tho property tax, but when he got in he did nothing of the kind. No doubt when ho got into office lie ascertained the real fact, and found that he could not dispense with it. _ Sir Julius was a man of resource, and if he could in his financing have dispensed with the tax he would have done so. Did thoy want tho harassing system in vogue in America, with its method of "betterments," in which tho settler had to note, down almost every transaction of his life, and overy dealing he made for the satisfaction of the public office and the board of reviewers ? If he sold a quantity of apples he had to put it clown. If he eold half a sheep to a neighbor he had to enter it. It had been stated by Mr Mors, member for Parnell, that not a State in America had a property tax. He applied to the American Consul to ascertain if this statement were true ; and the Consul said he could not be certain, but he believed that nearly every one of the States had a property tax. He next sent to America for information, which was lately laid before the English Parliament. He now stated, on the authority of the Committee of the House of Commons, that the whole of the States (save Delaware) had a property tax. In some States the tax was levied twice—first on the holder, and then on the mortgagee—while the incidence of the tax was heavier than in New Zealand, the tax being about LI in LIOO. Tho Premier concluded by thanking his hearers for the patient hearing, and invited the opponents of the tav to state their objections, and he would endeavor to answer them. He sat down amidst hearty cheers.

Mr F. G. Ewington addressed the meeting, and gave a number of frightful examples of the property tax, and stated that to his own knowledgo large sums had been prevented from coining into the colony from England, and sent to Australia, because of the property tax. Sir Harry Atkinson replied, explaining these cases apparently to the satisfaction of the meeting. He said that in his young days it was observed that when one fly died two came to the funeral. So for every nervous capitalist who took his money away from the colony, two capitalists were coming in his stead. Mr E. Bell moved, and Mr Samuel Vailc seconded--" That, while thanking the Premier for his address, this meeting condemns the property tax as being oppressive, inexpedient, and impolitic, owing to its discouraging the investment of capital and the influx of energetic immigrants into the country."

Mr H, Farnall moved, and Mr Gerald Peacock seconded, the following amendment:—"That this meeting thanks tho Premier for his address, but records its most emphatic protest against a continuance of the property tax, believing it to be inimical to the real interests and progress of the country-, and urges its immediate repeal. It also urges that a tax on land values, excluding improvements, should be imposed in lieu thereof." The amendment was carried by a largo majority. Mr J. Aitken Conncll moved a further amendment of a vote of thanks to the Premier simply. This was rejected. Mr Farnall's amendment was then put as a substantive resolution, and carried by a great majority.

The Premier replied, laughingly, that their orders, as lie understood them, were that every money-lender and capitalist in tho colony was to go scot free, while the unfortunate farmers were to be taxed. When ho went South and. told the people of the South about these ordera they would simply laugh at them.

The meeting did not come to a close till past eleven o'clock.